By; Bayo Akamo, Ibadan.
The Director of Economic Management, Centre for Management Development (CMD), Lagos, Dr Mike Onodje has asked the Federal Government to give bailout funds to manufacturers in Nigeria as a result of the present economic instability.
Dr Onodje stated this in Ibadan while delivering a lecture titled “Capital Structure and Performance of the Nigerian Manufacturing Sector” at the Nigerian Institute of Social and Economic Research (NISER), monthly lecture Ibadan.
According to the Centre for Management Development Director, there is the need for the Federal Government to cushion the effects of the ongoing economic instability in the country on Nigerians particularly those in the manufacturing sector.
In doing this, he pointed out that government through the CBN should adopt credit control measures to ensure that manufacturing companies don’t carry excessive leverage ratios,adding that manufacturers across the country are currently facing hardship due to economic instability.
Dr Onodje emphasized that Federal Government should endeavor to provide bailout for the manufacturer same way it did to assist the 36 state governments in the country few months ago.
Speaking further, Dr Onodje noted that the Financial Reporting Council should make it mandatory for financial statements of manufacturing firms to include a note on whether or not they consider leverage thresholds excessive in the year reported and that effective capital structure policies should be put in place by manufacturing companies to guard against excessive leverage thresholds.
“Smaller and growing companies should restructure their capital through mergers and acquisitions to shore up their equity. Statistical analysis indicates that leverage ratios of Nigerian manufacturing companies are high by global standards; there is negative impact of falling manufacturing sector performance on the economy,” he said.
In his remark, NISER Acting Director General, Professor Frank Odumosu said the topic was indeed a right thing in right direction because the economy is in a shambles, pointing out that “Nigeria will not be better if the manufacturing sector does not perform well.
Chairman at the NISER’s March lecture, Professor Rufus Akintoye declared that no country can grow without strengthening the capital structure, stressing that there will be stability of the economy if the capital structure is gotten right.
“Our policies will not make sense if we don’t get the fundamental rights; we need to put in place policies that will bring growth to the nation’s economy. If we don’t get the capital structure right, we can’t optimize the manufacturing sector,” he said.
Economic depression: Give bailout to manufacturers too – Don t0 FG
By; Bayo Akamo, Ibadan.