By Peter Egwuatu

Some of the banks have indicated their interest to finance viable state governments’ projects that are expected to impact on the lives of the people. The strategic intermediation role played by financial institutions in society will be further tested in the coming months as some states fine-tunes its developmental agenda to ensure prosperity for residents of their states.

Stanbic IBTC Plc, Zenith Bank Plc , Heritage Bank, GT Bank Plc and First Bank Plc co-sponsored the two day Kaduna State Investment   Economic Investment Summit tagged KadInvest. The government reforms in agriculture have also attracted financial commitments from the financial industry. Today, banks have invested billions of naira across the agricultural value chain. As well, banks continue to tap into the small and medium scale enterprises sector to create value.

The Chief Executive, Stanbic IBTC Holding, David-Borha said that Stanbic IBTC has “begun partnership with Kaduna State in the area of small and medium scale enterprises.” So often, financial institutions, which are mindful of toxic loans, are hampered by governments from playing this critical role. The required fiscal discipline, commitment and transparency to ensure realization of development plans are sometimes missing, making financial commitments difficult.

In reference to that, Acting Managing Director, Bank of Industry, Mr. Waheed Olagunju, said: “If the blueprint is religiously followed through successfully in terms of implementation, they state government would have substantially de-risk the business environment in Kaduna. And by so doing they will ease the ability of entrepreneurs in Kaduna to meet the Bank of Industry’s risk acceptance criteria, thereby facilitating access to its loans.”

Meanwhile, public financial institutions such as the Bank of Industry, the World Bank, the African Export and Import Bank, the International Monetary Fund and the International Finance Corporation made very strong contributions at the two-day summit. The   Kaduna state government talked about “productivity and competitiveness”. Financial institutions will be the critical springboard for the competitiveness of the entire state, no doubt.

At the recent inaugural annual Kaduna State Economic and Investment Summit, the state governor, Mallam Nasir el-Rufai, made a strong case for investment in the state by the private sector. At the summit, organised by the Kaduna State Investment Promotion Agency (KADIPA), with help from the Nigerian Investment Promotion Council and the Nigerian Economic Summit Group and co-sponsored by Stanbic IBTC, el-Rufai unveiled a five-year developmental plan for the state.

Some of the critical sectors to be addressed in the five-year developmental plan are transportation, power, agriculture, education, mining, housing, health, security and the judiciary, among others. Financial institutions, both public and private, have a critical role to play in the actualization of the plan.

“The government will continue to finance part of its capital programme with internal and external loans obtained on concessional terms” the governor said in acknowledgement of the role of financial institutions. Perhaps to further underscore this role, they were involved at every stage of the summit.

The aggregate capital expenditure projection for the state’s five-year plan is about N108 billion for 2016, N87 billion for 2017, N100 billion for 2018; N111 billion for 2019 and N126 billion for 2020. In all, the state government needs roughly N1.5 trillion in the next five years. Private sector players are expected to provide around half the fund, about N800 billion.

The financial institutions will provide the needed credit to both the government and the private sector players like Olam, which announced plans to invest $150 million (about N30 billion) in animal feed, poultry, hatchery factory in Kaduna, and Dangote, which indicated interest to invest N10 billion in tomato paste processing plant in the state, among other expected investors.

Speaking at the event,   Sola David-Borha, assured the state government of her institution’s readiness to partner the state to ensure government’s transformation agenda is realized and the benefits of democratic governance felt by the people.

“We believe that our role as financial partners is to ensure the realisation of the vision that the state government has articulated. We have already begun partnership with Kaduna State in the area of small and medium scale enterprises and we would like to finance some of their agricultural projects” David-Borha stated.

Another sector that would pique the interest of a host of financial institutions, particularly Stanbic IBTC, is mining. Kaduna is rich in solid minerals like tin, manganese, gold, tantalite, iron ore and columbite, among others. “With the government creating a conducive business environment for a regulated and value-added mining industry,” Stanbic IBTC’s pedigree in mining, derived from its heritage in Standard Bank, will be of immense benefit to the state.

“We are also a mining institution. Across Africa, we have provided financing in mining, and we believe we can do the same in Kaduna State,” David-Borha said. Other financial institutions, no doubt, will carry out independent assessments of opportunities they can tap into for short and long term interventions.