Yakubu Dogara, chairman, NCGC
President Bola Tinubu has established the National Credit Guarantee Company (NCGC), with an initial capital of N100 billion. The President also approved the constitution of the NCGC board, appointing Yakubu Dogara, former speaker of the house of representatives, as chairman. NCGC’s major stakeholders include the Nigeria Sovereign Investment Authority, Bank of Industry, Nigeria Consumer Credit Corporation, and the Ministry of Finance Incorporated. The World Bank Group is also providing technical assistance to NCGC, bringing its wealth of experience in other jurisdictions.
The National Credit Guarantee Company (NCGC) represents a commendable effort by the government to enhance access to finance for micro, small, and medium enterprises (MSMEs). This venture holds significant potential to mitigate lending risks and stimulate economic growth. It would be recalled that President Tinubu had said his administration would establish a credit guarantee company before the end of the second quarter (Ǫ2) of 2025.
However, there are concerns worth addressing with regards to NCGC. Several issues that warrant attention. The N100 billion capital base may be inadequate for a country with such a large economy, potentially limiting the NCGC’s impact. Additionally, the absence of a Credit Guarantee Act and a sovereign backstop might undermine its credibility and long-term viability.
This could lead to skepticism among experts regarding the venture’s effectiveness.
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To unlock the potential of the NCGC and to fully realize the promise of the NCGC, the government should consider reinforcing its foundation. Key recommendations include:
- Increased Capital Injection: Augmenting the capital base would bolster the NCGC’s credibility and capacity to stimulate economic growth.
- Sovereign Guarantee: Providing a sovereign backstop would offer assurance to lenders and investors, thereby fostering greater confidence in the initiative.
- Comprehensive Legal Framework: Implementing a robust legal framework would clarify the NCGC’s mandate and operations, ensuring transparency and accountability.
With these enhancements, the NCGC has the potential to unlock substantial lending opportunities and drive economic transformation. The government’s commitment to addressing these concerns and fortifying the venture will be crucial to its success. By adopting a more comprehensive approach, Nigeria can leverage the potential of the NCGC to foster economic growth and development.
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