The Guardian, Tuesday, August 29, 2017

The Equipment Leasing Association of Nigeria (ELAN) had advised the Federal Government to consider the equipment leasing option to revitalise the national economy especially at this period of recession.

This advice came during the press briefing to comment on the recent developments in the economy. The Executive Secretary, Andrew Efurhievwe, while making the remarks, commended the Government over the diversification and other initiatives to drive the economy towards achieving growth out of this recession.

He noted that equipment leasing is considered as a major financing option, which can be used to facilitate access to the much-needed equipment necessary for national development, especially when considering the volume of funding required in facilitating these growth during season of recessions. Citing the examples of climes that have maximized this option he said, “In the United States of America for instance, leasing remains the single most widely–used method of external finance, representing 30% of investment in capital equipment. Many developing countries such as Brazil, Indonesia, Pakistan Zambia, South Africa and Ghana, are equally using leasing to stimulate investment and create jobs. In these countries, leasing is at the forefront of investment in the extractive industries, transportation, agriculture, telecommunications, roads and other infrastructure”.

“Leasing is vital for economic growth and poverty reduction. The link between leasing, capital investment and economic growth has been established globally for some time now. The conclusion is that capital investment stimulates economic growth. In turn, leasing stimulates capital investment in countries where it is well developed, for leasing enables businesses and even governments (at the local and national level), to acquire capital assets for production. The acquisition and use of productive assets leads to productivity, income generation as well as job creation”.

Considering the huge benefits of equipment leasing, it is imperative for Federal Government to tap into the benefits of equipment leasing in order to use it as a major instrument for upgrading and maintaining sectoral infrastructures for national economic development.

He stated the influential benefits of leasing to all sectors of the economy to include, no collateral requirement with more flexible payment options, adding that occasionally no down payment is required. “This frees up capital for extra expenditure; 100% or more financing which include hardware, software, installation, maintenance, training, all of which can be encompassed in the lease contract” he added.

The Executive Secretary revealed that, leasing has gained significant global recognition as a creative financing alternative for the acquisition of capital assets, in Nigeria, it has continued to contribute to national development, creating wealth and improving the economy. In the last 10 years, the leasing industry added assets worth over N5.9trillion to capital formation in the Nigerian economy. In 2015, outstanding lease volume was estimated at N1.1trillion, up from N869 billion in 2014, representing a growth rate of 27.3 percent as against 11.3percent in 2014. The impactful visibility of leasing is increasing in various sectors of the economy and exhibits a brighter future given its developmental attributes.

Based on the developmental attributes of leasing, the Association called on Government to embrace leasing as a major instrument for upgrading and maintaining infrastructural facilities across the country.

The Guardian, Tuesday, August 29, 2017