Govt Urged to Promote Leasing Industry for Economic Growth
By Peter Uzoho
The federal government has been advised to encourage the leasing industry in order to promote economic growth.
Leasing is a contract between the owner of an asset (lessor) and the user of an asset (lessee), giving the lessee possession and use of the specific asset on payment of rentals over an agreed period.
With its huge economic benefits such as returns on investment for government, private sector as well as individuals; cost saving and wealth creation and minimisation of wastage, stakeholders in the industry have urged the government to pay greater attention to this sub-sector to save the nation’s economy.
Speaking in Lagos, at a programme organised for journalists by the Equipment Leasing Association of Nigeria (ELAN), its Executive Secretary, Mr. Andrew Efurhievwe, said while ELAN was making frantic effort to ensure that full benefit of leasing was realised in Nigeria, government on its part, should show more commitment to the vision.
He revealed that since the advent of modern leasing in Nigeria, over 250 companies had been involved in the business, generating N1.26 trillion in 2016. This, he said represented 14 per cent growth over N1.1trillion in 2015. He said vehicles, generators and household equipment are the most leased assets in the country.
Efurhievwe also noted that, in the past 15 years, leasing had contributed over N7.08 trillion to the Nigerian economy.
“Today the impact of leasing is pronounced in all sectors of the economy, enhancing capital formation, generating employment and creating wealth,” he said.
He stated that leasing had continued to be attractive to new investors with massive diversification by existing players in the industry, adding that, on a daily basis, the appetite for leasing was increasing, with new lease transactions being booked daily due to the current economic situation, which according to him had made outright purchase increasingly difficult.
To develop the leasing industry, Efurhievwe suggested that the federal government should implement the Leasing Act, saying, it would foster greater contribution of leasing to the economy.
He also urged government to include leasing as one of its intervention funds to enhance the capacity of the industry to undertake big ticket leases.
“To further develop the industry, there is need for direct policy on government’s utilisation of leasing in its development agenda.”