To usher in a regime of orderliness in the financial system in the country in the event of losses ,the senate has advocated for the need for stronger bankruptcy and insolvency laws.
Speaking while declaring open a one day public hearing on bankruptcy and insolvency Act Amendment bill 2016 on Monday, Senate president, Dr. Abubakar Saraki noted that the bill will guide the process that would ensure that firms that incur losses can easily break even and exit the markets using several market tools and intervention mechanisms.
Saraki said that the bill is considered a priority of the senate because of its important role as a key contributor to better credit risk management as well as a vital credit availability and business management tool.
‘‘As we settle in to consider the issue before us at this session on the Bankruptcy and Insolvency Act, our contributions to the discussion of the day, must be guided by the fact that Nigeria is undergoing change; a re-evaluation, re-definition, and re-construction across all sectors of our lives.
“Our over arching objective is to re position the Nigerian economy more effectively to the challenges of the 21st century. This is why the key policy priorities of the 8th Senate has been on business environment reform that would creates more jobs and opportunities for our youthful population, to promote and sustains our domestic entrepreneurs, as well as to attract new investors into our country”
He further stated: “Consequently, we believe that it is important for us to continue the process of strengthening Nigeria’s business-related legislation by examining our bankruptcy laws. This is because global best practices have taught us that the bedrock of modern competitive economies is based on free entry and free exit. The role of an effective bankruptcy and insolvency system in delivering this cannot be over-emphasised.
This would also mean that for free exit to be orderly in the event of losses, Nigeria needs stronger bankruptcy and insolvency laws to guide the process that would ensure that such firms that incur losses can easily break even and exit the markets using several market tools and intervention mechanisms.”
Saraki noted that the bill if repealed and re-enacted will attract domestic and foreign investors in the country and would ultimately better its challenging socio-economic and political fortunes.
‘‘Insolvency system and practice play important role in attracting both domestic and foreign investments as well as promoting innovation.’’
Chairman, committee on banking and insurance, financial institutions, Senator Rafiu Ibrahim reiterated the need to review the law saying “it was outdated.’’