WELCOME ADDRESS BY DR. OLUTOYIN OKEOWO, CHAIRMAN, BOARD OF DIRECTORS, EQUIPMENT LEASING ASSOCIATION OF NIGERIA (ELAN) AT THE 17TH ANNUAL NATIONAL LEASE CONFERENCE HELD ON THURSDAY, 21st NOVEMBER 2019 AT GOLDEN TULIP HOTEL, BENIN CITY, EDO STATE
The Chief Host, His Excellency Godwin Obaseki, the Executive Governor of Edo State
Special Guest of Honour Otunba Richard Adeniyi Adebayo, CON, Honourable Minister for Industry, Trade and Investment
Esteemed Guest Speakers and Panellists
Distinguished Special Guests
Directors and Members of ELAN
Gentlemen of the Press
Ladies and Gentlemen,
It gives me great pleasure to extend to you all a very warm welcome, on behalf of the Equipment Leasing Association of Nigeria, to the 17th Annual National Lease Conference organised by ELAN. I am especially honoured to welcome Your Excellency, the Governor of Edo State, His Excellency Godwin Obaseki. Also, the Special Guest of Honour Otunba Richard Adeniyi Adebayo, CON, Honourable Minister for Industry, Trade and Investment, esteemed Guest Speakers/Panellists and other dignitaries. We express our most sincere gratitude to you for creating time to honour our invitation in spite of your very busy schedules.
The Annual National Lease Conference remains the biggest gathering of stakeholders in the Nigerian leasing industry, providing a major platform for engagement on pertinent issues affecting the development of the leasing industry and economy, exploring opportunities as well as promoting business networking. This conference is being held in Edo State in furtherance of our objective of spreading the essence of leasing across the nation and to identify with the developmental initiatives of the State. I congratulate the Governor and people of Edo State on the successful hosting of the Alaghodaro summit to mark the 3rd anniversary of His Excellency in office. I must state that we are impressed by the achievements in past three years, which are unprecedented in the history of the State.
The theme for this year’s event “PROMOTING LEASING FOR INCLUSIVE GROWTH” is informed by the need to highlight the beauty of leasing as a creative financing alternative to enhance productive capacity, create wealth and sustained economic development, especially at this challenging time in the life of our country.
Nigeria is faced with a barrage of challenges ranging from increasing poverty with an estimated 90million people living in poverty and unemployment at 23.1 percent to inadequate infrastructure amid burgeoning debt and dwindling revenue. The huge recurrent expenditure of N4.88trillion and debt servicing of N2.45trillion as captured in 2020 budget for instance, are indications that the country’s capacity to invest in basic infrastructure and human capital development critical to economic growth, will continue to be impaired.
Perhaps in recognition of these challenges, the Government recently made a pronouncement to take 100 million Nigerians out of poverty in the next ten years. Various empowerment programmes such as the N-power, Tradersmoni, have been initiated to create employment and alleviate poverty.
Also, the Central Bank of Nigeria (CBN), directed banks to raise the Loan to Deposit Ratio (LDR) of banks to 65 per cent to assist the real sector. This would allow banks to channel their energies and also make credit accessible to the sectors that actually need the funds. The new requirement is expected to encourage SMEs, retail mortgages and consumer lending.
These are positive developments which reflect government’s intention for inclusive growth. However, policies for inclusive growth must remain important components of government’s strategies for sustainable growth, with the development of new and improved models that would ensure that growth actually improve the quality lives. It is therefore imperative that policy makers continue to take urgent actions to ensure that the kind of inclusive growth, is the one that sustains a broad-based improvement in the quality of life of the people, creates employment opportunities, helps in reducing poverty and seeks to provide equality of opportunity to all, as well as empowering the people through education and skill development.
Basically, special efforts to increase employment opportunities are critical to bringing about an improvement in the standard of living of the people. One of such efforts is financial inclusion to provide effective access to wide range of financial services for all, thereby empowering people for productive activities. This is key for instance, to lifting 100m Nigerians out of poverty.
No doubt, equipment leasing is very significant in achieving financial inclusion and inclusive growth. As a financing alternative, Leasing is unique as it facilitates easy and convenient access to desired equipment needed for productive purposes, contributing to capital formation in the economy. Leasing reaches out and meet the diverse equipment needs of various categories of customers, be it large corporate organisations or small venture owners, providing them with affordable and quality services tailored to their needs. The overall essence of leasing is to enhance the planning, improvement and development of any economy by building and supporting productive ventures.
Globally, equipment leasing has been established over the years as the creative financing alternative, generating new business volume of over $1trillion annually. The beauty of leasing lies in the fact that it delivers a multiplicity of benefits to those who choose to lease. It helps all types and sizes of businesses to conveniently acquire the much needed equipment to conduct their business operations and make profit. Governments are also utilising leasing in their developmental initiatives. The leasing industry supports investments in key sectors of the economy in many developing countries including, Egypt, South Africa, Morocco, Algeria, Ghana and Zambia in Africa.
Since inception in Nigeria, leasing has been supporting economic development. Today, the impact of leasing is pronounced in all sectors of the economy, enhancing capital formation, generating employment and creating wealth. In 2018, outstanding lease volume stood at N1.68trillion up from N1.44trillion in 2017 representing a growth rate of 16.3 percent, bringing the cumulative volume in the past 10years to about N8.3trillion. Leasing is becoming more relevant in our prevailing economic situation, especially to Micro Small and Medium Scale Enterprises (MSMEs) given the high cost of assets.
Indeed, leasing can play a major role in the actualisation of the economic agenda of the Federal and State Governments. I therefore call on Governments at all levels to utilise leasing in its developmental agenda and pledge the willingness of the leasing industry to collaborate with them to achieve the set out economic initiatives. In Edo State, we hope to build a strong partnership with the State Government and the business community to support the economy of the State by enhancing productive capacity through leasing.
While the future of leasing appears bright, the continued support of stakeholders is important for the industry to fully realise its potential. On its part, the Government as part of the support framework, enacted in 2015, the Equipment Leasing Act, a significant development aimed at bringing certainty, sanity and promoting investment in the leasing industry. The Act established the Equipment Leasing Registration Authority which is expected to give effect to the intent and purport of the Act. However, the body is yet to be operational, as it has not been formally inaugurated by the Minister of Finance, Budget and National planning, the supervisory Minister.
We therefore use this opportunity to appeal to the Honourable Minister, to urgently inaugurate the Equipment Leasing Registration Authority, so as to fully realise the benefits of the Act. Also, we seek the support of the Honourable Minister of Industry, Trade and Investment in this regard. The Ministry of Industry, Trade and Investment, is one of the statutory representatives of Government that constitute the Registration Authority and a major stakeholder in the leasing industry. It is worth mentioning that, foreign and local investors are waiting in the wings to take full advantage of the Act, by increasing their participation in the leasing industry.
There is also the perennial issue of funding. Money is the raw material for leasing and it is important to have appropriate funding mechanism to finance lease transactions. The prevalence of short term funding sources, which are usually expensive, limit the capacity of lessors to finance leases. This issue has been aggravated with the devaluation of the Naira, which increases the cost of assets, and the waning appetite of banks to lend. We continue to engage financiers on this issue as we continue to appeal to the government to include leasing in the various intervention funds for the development of targeted sectors of the economy. Also, the leasing industry should be given access to pension funds, which is one of the major sources of funds for leasing globally because of its long term nature.
Distinguished Ladies and Gentlemen, I am very optimistic with the quality of this gathering, the various issues highlighted will be given the utmost consideration. At the end of the day, we expect to come out with key resolutions and follow up links that would create value for the diverse representation at this conference.
Also, this conference presents you with a great opportunity to create new contacts and expand your business networking. Delegates represent diverse sectors including leasing industry, government and the business community. We therefore urge you to engage and maximise your benefits.
Before ending this address, permit me to brief non-members present here about ELAN. The Association was established in 1983, and is today the chief promoter of leasing business in Nigeria, with strong advocacy, capacity building, lease education and awareness, research, advisory as well as business networking and other promotional functions. Over the years, with the support of stakeholders, we have continued to pursue activities in these areas to the benefit of the Nigerian leasing industry and economy. I therefore encourage interested corporate organisations, professional firms and individuals present here to join us so that together, we can build a solid leasing industry that would support businesses, improve the quality of lives and contribute more to national development.
Finally, on behalf of ELAN, welcome once again to the 17th National Lease Conference and I wish us a fruitful session.
Thank you.