Expert Calls for Banking Penetration to Unlock ‘Hidden Treasures’ in Rural Economy

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Emmanuel Ugwu-Nwogo in Umuahia

The federal government has been urged to come up with necessary policy instruments to increase the number of financial intermediating institutions in the rural communities to free huge amount of hidden cash that could help in wealth creation.

A professor of agricultural economics, Prof. Remy Onyekachi Mejeha made the call yesterday while delivering the 50th inaugural lecture of Michael Okpara University of Agriculture Umudike (MOUAU).

He said the huge amounts of “hidden treasures” of different forms abound in the rural areas waiting to be liberated into the economy.
He warned that if the hidden treasures were not mobilised and ploughed into the economy greater part of the treasures could either be lost or remain unproductive to the detriment of economic growth.

In his lecture entitled, “Financial Intermediation in Agriculture: Hidden Treasure Mobilised for Wealth Creation,” the university don noted that hoarded cash and stored valuable possessions that constitute the hidden treasures were needed to create wealth.
“Keeping huge resources unproductive in a country where resources are very scarce constututes a bottleneck to wealth creation, “he said.
Mejeha, who has over the years conducted extensive research on problems facing agricultural development in Nigeria, said that the instruments that could have been used “to liberate” hoarded funds have largely remained ineffective.

According to him, cooperative societies that have widespread geographical spread in the rural communities have proved ineffective in mobilising hoarded cash since they depend largely on grants and and support that dried up at a point in time.

He also noted that banks and related institutions have equally failed in hoarded fund mobilisation because they “have not been able to extend financial services(savings mobilisation an extension of credits) to a larger segment of the farming population” hence the option of hoarding cash.

“Hoarded cash is not available for investment which gives rise to wealth creation,” he said, adding that in spite of the availability of relevant policies, financial intermediation services are not properly regulated to play their role in ending cash hoarding.

Mejeha insisted that identifiable unharnessed treasures in the rural communities have huge values and called for “policy actions on treasure mobilisation” involving government, investors and relevant institutions.

He also recommended that designated central authorities should regulate relevant authorities that exercise control over prices of agricultural products and interest payments on cash deposits.

On their own part the agricultural economist said that Universities of agriculture and related institutions should work together with the aim of “enumerating the treasures an preferring solutions in effective ways of converting unharnessed agricultural treasures to sustainable means wealth creation in Nigeria”.

Also speaking, Vice-chancellor of MOUAU, Prof Maduebibisi Ofo Iwe said that with what is presently happening to the economy and naira losing value unabated the issue discussed in the inaugural lecture was timely as cash haording is a major problem of the economy.

He said that Prof Mejeha, who is very passionate about rebuilding the nation’s floundering economy and has been consistent advocate of agribusiness financing for wealth creation, has made good recommendations that should be adopted by the relevant authorities as a magic wand to heal the economy.