20100605
Reuters

Nigeria's new finance minister said on Friday creating jobs and getting affordable credit to smaller companies were among his top priorities in the short time left of the current administration.

Olusegun Aganga, a former Goldman Sachs executive who took over as finance minister two months ago, said a $4 billion bank bail-out by the central bank last year had been courageous and necessary but noted it had had unintended consequences.

Businesses and consumers in sub-Saharan Africa's second-biggest economy have complained of difficulty sourcing long-term credit in the wake of the bailout as banks tightened lending criteria. Bank credit growth to the private sector has been virtually stagnant at 0.3 percent this year.

"One priority for us is to make sure we source and allocate capital to critical areas of the economy, especially for small and growing businesses, so they have access to cheaper credit," Aganga told reporters after his first meeting as finance minister with business leaders in the commercial capital Lagos.

"The second area of importance is job creation ... There is a disconnect between the growth in the economy we have seen over the last 5-10 years ... and the depth of unemployment and the direction it is going," he said.

He said the official unemployment rate, according to the National Bureau of Statistics, stood at around 19.7 percent but noted that around half of 15-25 year olds in urban areas were jobless, according to the figures.

Aganga said small and medium-sized businesses that should be profitable were being forced to close by interest rates of more than 20 percent they were paying on bank loans, further heightening unemployment.

Nigeria's central bank has set up a 500 billion naira fund to allow banks to refinance loans to manufacturers, the power sector and airlines in a bid to boost the availability of long-term credit to key parts of industry.