The Equipment Leasing Association of Nigeria (ELAN), on Tuesday, said given the prohibitive cost of rebuilding the nation’s economy dragged into a recession by the lockdown imposed following the outbreak of the Coronavirus pandemic, equipment leasing remains a far cheaper, innovative, and proactive way to rebuild while enabling growth and development.
The association noted this in its 2021 outlook titled – “2021: A year of Cautious Optimism,” lamenting that the growing cost of assets, continues to hinder the capital formation in the economy.
It urged government at all levels to utilize leasing for driving their development agenda, by seeking “innovative and proactive ways to achieve development-oriented initiatives, (especially) equipment leasing – a creative financing alternative, utilised globally to stimulate economic development and growth.
“The appeal of leasing is underscored in its developmental attributes of enhancing capital formation in the economy, that drives job creation, revenue, better life and economic growth,” the statement added.
ELAN commended the Federal Government’s 2021 budget tagged ‘Budget of Economic Recovery & Resilience’, which is expected to accelerate the pace of Nigeria’s economic recovery, promote economic diversification, enhance competitiveness and ensure social inclusion.
Commending the government’s N13.58tr budget signed into law alongside the Finance Act (2020) in line with its determination to restore the January-December budget cycle, the association said the planned N4.12tr capital expenditure, indicates government’s intention to complete many ongoing projects.
Such level of expenditure, if faithfully implemented, the group continued, will stimulate activities in the economy, just as the N5.65tr non-debt recurrent expenditure, will allow for the continued payment of salaries and overheads in the public sector,.
The association assured that embracing leasing while facilitating the nation’s developmental agenda, will involve effective stakeholder engagements to develop and implement a plan, capable of giving the necessary support that can deepen leasing penetration and contribution to country’s economic activities.
“Equipment leasing is indeed the creative financing alternative utilized globally to stimulate economic development and growth,” it stressed.
The appeal of leasing it added, is in its developmental attributes of enhancing capital formation in the economy to drive job creation, growing revenue, ensuring better life for the populace, all of which would ultimately result in economic growth.
Leasing helps to achieve this “by allowing easy and convenient access to much needed productive assets.”
The current reality, it stressed, is that the developmental attributes of leasing can stimulate the economy and get it out of the woods, by facilitating for instance, the actualisation of key project initiatives of the Nigeria Economic Sustainability Plan (NESP), among others.
ELAN recalled that the leasing industry remains an essential contributor to national economic development, while continuing to demonstrate innovation and flexibility in the face of economic turbulence, maintaining a trajectory of over a decade of uninterrupted growth.
For example, at the end of 2019, new business volume grew by 13.5%, with outstanding lease volume of N1.91tr, from N1.68tr in the preceding year, even as it is expected to contribute more, given the right support from relevant stakeholders.
One of such support is expected from the formal inauguration of the Equipment Leasing Registration Authority by the Minister of Finance, Budget and National Planning, pursuant to the Equipment Leasing Act 2015.
