The Equipment Leasing Association of Nigeria (ELAN) states that a major financing tool that can bring the economy out of the woods is equipment leasing. This was disclosed in the 2021 outlook released by the Association titled – “2021: A year of Cautious Optimism”.
According to ELAN, “rebuilding the economy requires enormous capital and the growing cost of assets, hinders the capital formation in economy. Government at all levels must seek innovative and proactive ways in achieving its development – oriented initiatives. One of these options is 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”
Stating further, the Association commended the Government on the 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. The appropriation Bill of N13.58 trillion signed alongside Finance Bill 2020 on the last day of 2020 in line with the promise of Government to return the nation to the January to December budget cycle, is well commendable. The non-debt recurrent expenditure of ₦5.65 trillion, seeks to ensure the continued payment of salaries and overheads in the public sector, while the capital expenditure of N4.12 trillion, indicates new focus of government’s intention to complete as many ongoing projects as possible, rather than the commencement of new projects. These level of expenditure, if implemented will stimulate activities in the economy.
Also, the Association opines that part of the process of the utilisation of leasing in facilitating developmental agenda, will involve the effective engagement with stakeholders to develop and implement plan, that will bring the necessary integral support in order to deepen leasing penetration and contribution to economic activities in Nigeria. Therefore, ELAN calls on government at all levels to utilise leasing in driving their developmental agenda.
Equipment Leasing is indeed the 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. Lease does this by allowing easy and convenient access to much needed productive assets. In today’s reality, the developmental attributes of leasing can be brought to bear on efforts to stimulate the economy and get it out of the woods.
For instance, leasing can facilitate the actualisation of key project initiatives of the Nigeria Economic Sustainability Plan (NESP), other intervention programmes and the overall economic agenda of Government. No doubt, equipment leasing is very significant in achieving financial inclusion and inclusive growth. The overall essence of leasing is to enhance the planning, improvement and development of any economy by building and supporting productive ventures.
In Nigeria, the leasing remains an essential contributor to national economic development and continues to demonstrate innovation and flexibility in the face of economic turbulence. The industry maintained its growth trajectory – recording more than a decade of uninterrupted growth. Available statistics show that new business volume grew by 13.5 percent in 2019, rising from outstanding lease volume of N1.68 trillion in 2018 to N1.91 trillion in 2019, and is expected to contribute more, given the right support from relevant stakeholders. One of such support is the formal inauguration of the Equipment Leasing Registration Authority by the Honourable Minister of Finance, Budget and National Planning, in pursuance to the intent and purport of the Equipment Leasing Act 2015.