As the new year 2024 begins with a positive outlook, Nigerians can look forward to a great and economically rewarding year as the Federal Government is set to launch a massive consumer credit system in the country.
While seeking the mandate of Nigerians during the last electioneering season, President Bola Tinubu was big and loud on the catalytic effect of consumer credit in driving economic recovery, growth and development, in boosting industrial production and as a strong weapon against corruption.
Long before he declared for the Presidency of Nigeria, President Tinubu had been a big advocate of consumer credit. He made it a key highlight of his remarks at the 2016 edition of the Bola Tinubu Colloquium in Lagos where he called out Chairman of Zenith Bank, Jim Ovia; his UBA counterpart, Tony Elumelu, and other bankers in attendance to begin to rethink consumer credit in Nigeria and charged them to develop good banking products in this regard.
In ‘Financialism: Water from Empty Well’, a book he co-authored with Brian Browne, several pages were devoted to how consumer credit can propel unprecedented growth and shared prosperity. To demonstrate his absolute commitment to achieving this objective and a major campaign promise clearly enunciated in his Renewed Hope Agenda for a better Nigeria, President Tinubu has set in motion the process to entrench consumer credit as one of the building blocks of a virile and productive economy.
Against this backdrop, the Presidential Council on Industrial Revitalisation, on December 20, 2023, just before the Christmas holiday, established a Technical Working Group to develop the needed framework to enhance consumer credit in Nigeria.
The Tinubu-led administration in the words of the Minister of Industry, Trade and Investment, Doris Uzoka-Anite, recognises the importance of consumer credit and its linkage to market efficiencies.
“An efficient consumer credit system is a highly essential component of successful economies, as it works to improve market efficiencies and fill in gaps in consumption and productivity by providing consumers immediate access to credit, allowing them to purchase ahead of ability,” the Minister said.
At the inaugural meeting of the Technical Working Group on Consumer credit system that had other members including the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, Minister of Communications and Digital Economy, Bosun Tijani, Uzoka-Anite lamented how the absence of consumer credit had shrunk the productive capacity of the economy and hampered financial inclusion.
“The absence of a well-structured consumer credit system has been a significant impediment to financial inclusion and economic prosperity,” the Minister of Industry, Trade and Investment declared.
Given the current state of the economy and the strong push by the government to revamp it, the setting up of the Technical Working Group by the Presidential Council on Industrial Revitalization can be said to be timely and strategic. The Technical Working Group among other things will draw up a working proposal and implementation method on how the country can achieve a viable institutional and regulatory framework that will significantly open up the consumer credit landscape.
According to Uzoka-Anite, Nigeria has numerous financial institutions and credit schemes, but many Nigerians still face substantial hurdles in accessing credit due to stringent eligibility criteria, high interest rates, identity-related challenges, fragmented data sources for proof of livelihood and financial worth, lack of awareness or understanding of credit processes, and inadequate credit available for lending. To make sure the agenda of President Tinubu is established on a solid ground and for seamless take-off of the credit scheme, the government has brought together various Ministries and agencies of government that have roles to play to work collaboratively for a successful execution.
The Technical Working Group draws its members from the Central Bank of Nigeria (CBN), Federal Inland Revenue Service (FIRS), National Identity Management Commission (NIMC), the National Insurance Commission (NAICOM), the National Institute of Credit Administration (NICA), the Federal Competition & Consumer Protection Commission (FCCPC) and the Bank of Industry (BOI) amongst others. It must be said that because of the importance attached to the scheme by President Tinubu, the TWG set for itself a five-month timeline to achieve its objectives. This means by May 2024, a comprehensive, life-changing and an all-encompassing consumer credit system will be launched.
Uzoka-Anite who is the Vice Chairman of the Presidential Council on Industrial Revitalisation spoke on the specific objectives and the tasks before her Committee to include: “increasing consumer credit uptake in Nigeria, enabling a sustainable credit system for the country in line with global best practices, and enhancing the supporting infrastructure (technology, data, financial institutions, global partners) to boost credit operations and equip players in the industry.”
In delivering on its core mandate, the TWG has adopted, according to the Vice Chairman, a holistic consultative approach that will draw on the experience, knowledge, and expertise of the credit ecosystem to understand the issues within the industry and define workable solutions to addressing them.
As he declared in his New Year National Broadcast, President Tinubu committed himself to removing every obstacle that impedes economic recovery and competitiveness of the business environment. In the new year speech, he also assured that his administration would race against time to deliver necessary reforms that will make life better for all Nigerians. This move by the government to recalibrate consumer credit system is one important reform that will give a new lease of life to Nigerians to be able to own the consumer goods they desire without the burden of having to pay all at once.
The strategy will also be calibrated to promote local industries and boost productivity among Nigerians towards achieving the lofty economic growth and development promises of the Tinubu administration, as Nigerians will be encouraged to patronise local goods and services. This way, the velocity of credit will be enhanced and the dreams of President Bola Ahmed Tinubu for the transformative power of credit and capital will be achieved.
-Ajayi is Senior Special Assistant to the President on Media & Publicity.