Expert Advocates $10bn Capital Base For BOA
The founder of the Port Harcourt Premier Business School, Dr. Silva Opuola-Charles, has said Nigeria will need to recapitalise the Bank of Agriculture to at least $10bn in the next five years, to significantly boost lending to the agricultural sector.
Opuola-Charles, a public finance expert and former commissioner of finance in Bayelsa State, said the current $150 million being given out as loan in the sector was not enough, adding that the country must up the game to catch up with competitors.
He spoke in Port Harcourt, while presenting two books: Nigeria’s Strategic Frontiers: Dreaming to the First World (A strategic Comparative Road Map for Nigeria), and Public Finance.
The book presentation was also to commemorate the commencement of Port Harcourt Premier Business School.
Opuola-Charles, also a former commissioner for economic planning in Bayelsa State, said countries that compete with Nigeria had larger capital base for agricultural funding.
He noted that South Africa has $5 billion in its Bank of Agriculture (BoA) while China has $65 billion, saying such was the size Nigeria needs to move its agricultural banking sector and agro-business forward.
He said Nigeria must gradually recapitalise the BoA to face challenges of 21st century agricultural business and the global competition in food security.
To him, without a strong agricultural business sector, sound health system and good education template, Nigeria would may continue to face foreign exchange challenges.
He, pointed out that the stability of any nation would depend on forex stability.
He told his audience to, “invest in research, education, and health; and create incubation centres for technology and manufacture to achieve import substitution.
“China in 1998 had the GDP Nigeria has today, $500 million, but they launched export promotion scheme and later import substitution scheme that moved their GDP to $.7 trillion in a matter of few years.”
Opuola-Charles, made other recommendations in the books including the inclusion of Joint Venture partners in the Nigerian National Petroleum Corporation (NNPC) to stop losses being recorded and the inclusion of AMCON in the Bureau of Private Enterprises (BPE) to oversee how borrowing was being done by private companies.
He said tax must not be static, adding that Value Added Tax (VAT) ought to move according to Gross Domestic Product (GDP). This, according to him, was how it was being done in advanced countries. The essence, he said, was for Nigeria to adopt most of the economic policies practiced in many advanced countries if the nation wished to become a first world country.
He drew a connection between poor taxes and poor cash (liquidity) in the Nigerian economy and massive borrowing, saying the nation shies away from collecting the right tax and end up borrowing to harm the economy more.
“At the end, we service debt with 25 per cent of budget instead of with globally recommended 10 per cent,” he lamented.
He regretted that tax to GDP was about six per cent, when the global average was 22 per cent, attributing this to poor tax administration and collection. He said what the Customs was collecting was peanuts, compared to what it ought to collect and what is collected elsewhere.
Two professors who reviewed the books, Olusegun Sogbesan and Tamunonimim Ngereboa, said the books have raised questions in a scholarly way and answered them in practical ways with numerous solutions.