Breaking News

OPS, Afenifere, tackle Senate over planned scrapping of BoI

Kindly Share This Story:

By Franklin Alli & Naomi Uzor

The Organised Private Sector, OPS, and the pan-Yoruba socio-cultural group, Afenifere have taken a united stand against moves by the Senate to scrap the Bank of Industry and replace it with a new bank to be called National Development Bank of Nigeria, NDBN.

The pan-Yoruba socio-cultural group, Afenifere, in its reaction to the move warned against the proposed repeal of the Bank of Industry, BoI, the Bank for Commerce and Industry Act and the National Economic Reconstruction Fund Act, NERFUND.


Afenifere, in a statement by its publicity secretary, Yinka Odumakin, said that the plan, which has also curiously attracted support from the Federal Ministry of Finance, stressed that it is only in Nigeria where politics takes precedence over development that anybody could be thinking of scrapping the Bank of Industry (BoI) which has provided succour for many businesses at a time the country is in a recession and should be strengthening industrialisation to fight its way out.

“We are fully persuaded that the BoI should be provided with more capital to be able to further support the real sector instead of duplicating functions by creating new development finance institutions, bearing in mind the failure of similar Development Finance Institutions in the past, such as the NBCI, NERFUND, People’s Bank, Community Banks, etc.

“We have yet to see any cogent reason for the plan to scrap the BoI which has survived for 37 years outside the insinuations that those moving for it are doing so because they believe it is supporting industrialisation which is thriving only in the southern part of the country. We advise such people not to kill the bank for such reason.

They should rather encourage people in the North to also embrace enterprise and approach the bank with viable projects the way the former Speaker of the House of Representatives, Salisu (Ibrahim) Buhari did with thousands of employees on his payroll with the support of BoI. His success story has also been replicated by Alhaji Amasko in Kano who has been very successful in the lubricant business.”

The Chieftains of the OPS, in their position papers to Senator Rafiu Adebayo Ibrahim led Committee on Banking, Insurance and other Institutions Public Hearing on the National Development Bank of Nigeria, made available to Financial Vanguard, said that they wholly support the continuity of the current operations of the BoI, asserting that “BoI is already serving the economy well.”

In the same vein, President Manufacturers Association of Nigeria (MAN), Dr. Frank Udemba Jacobs, said: “MAN is taken aback by the introduction of the Bill which seeks to repeal the BoI Act and establish the National Development Bank of Nigeria (NDBN) in its place.  We are concerned about the prospects of changing the status of BoI as we know it today for the following reasons: “BoI has been functioning and delivering on its mandates within the available funding capacity.

Going through the proposed Bill, there is hardly any value addition to be derived or achieved by the proposed NDBN that is not currently being rendered by BoI; neither is there any difference from what BoI was licensed to carry out. They have so far carried out these services to the satisfaction of stakeholders, including the business community.”

According to him, instead of concentrating efforts on the establishment of this proposed Bank, the National Assembly should assist the Executive in making operational the Development Bank of Nigeria established by the last administration in March, 2015.

He said:“There is a new development bank known as Development Bank of Nigeria which was inaugurated by the last administration in March 2015 to complement BoI in the financing of the real sector. MAN has since then been advocating for the effective take-off of the Bank. The National Assembly may consider that the value of legislation lies in the spirit that drives it.   The spirit of this bill is to consolidate a number of institutions into one entity for the purpose of delivering a development finance function more effectively. This has already been done as embodied in the current operations of the Bank of Industry.”

MAN, he further said, recommend as follows:

“The existence of the BoI has made the creation of this National Development Bank of Nigeria as proposed in this Bill unnecessary.   It would amount to a duplication of the one already inaugurated by the last administration, a development that the country can ill-afford at this time.

“The emphasis at this time should be to increase the capital base of Bank of Industry and the other existing Development Finance Institutions such as BOA, NEXIM, Infrastructure Bank for effective delivery of their mandates. The BoI is effectively performing the functions envisaged by the merger in the Bill. All that is needed is urgent legislative action to regularise the BoI Act so that the institution can continue with its work with minimum distraction.”

MAN, he said, fears that the proposed Bank may suffer political interference in its operation, which may grossly affect the performance of its core mandate given the composition of the Board of Directors and heavy reliance on the Federal Government for funding.

Also speaking, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture, (NACCIMA), in its position paper, said: “The Bank of Industry is an institution which mandate revolves around the provision of loans to small, medium and large enterprises as well as large business financing, its track record of achievements since the winding up of the Nigerian Industrial Development Bank is there for everyone to see. It is on record that the BoI, has effectively intervened in sectors of the Nigerian economy where market based financial institutions would not and has proved to be an effective development finance institution that caters to the needs of SMEs.”

Chief   Bassey Edem, NACCIMA President,   noted: “The present attempt by the National Assembly to scrap the BoI and replace it with the National Development Bank of Nigeria (Establishment, etc) Bill, 2015, that is currently awaiting the report of the Committee on Banking, Insurance and Financial Institutions, and has gone through the First and Second readings, creates a curious phenomenon.

“This is because the Bank of Industry Limited (BoI) has proved to be Nigeria’s most successful development financing institution since its establishment, providing support to Nigeria’s industrial sector.”

On her part, Dr. Nike Akande, President Lagos Chamber of Commerce and Industry, LCCI, said:     “LCCI has strong reservations on the proposition in the Bill seeking to establish the National Development Bank of Nigeria.  Our position is anchored on the following premises:

“The Bank of Industry was a product of merger of the defunct Nigeria Industrial Development Bank (NIDB), Nigerian Bank for Commerce and Industry (NBCI) and the Nigerian Economic Reconstruction Fund (NERFUND) in 2001.  For all practical purposes, this merger has been effected, and the BoI has been delivering on its mandate to the satisfaction of key stakeholders, including the business community ever since.

“This bill seeks to do exactly the same thing.  We submit that it will be a waste of legislative time and a distraction to all stakeholders for the process to continue.   If the BoI Act has not been regularised, then that should be done urgently.   The value of legislation lies in the spirit that drives it.   The spirit of this bill is to consolidate a number of institutions into one entity for the purpose of delivering a development finance function more effectively. This has already been done as embodied in the current operations of the Bank of Industry.

“We submit that since its consolidation into BoI, the bank has been delivering significant value to the operators in the real sector, within the limits of the resources available to it.   And unlike other Development Finance Institutions, the BoI does not have sustainability challenges.   Indeed, it should be the model to replicate for other DFIs in the economy.

“It will therefore, not serve any useful purpose to dismantle a structure that is currently serving the real sector of the economy well.   If anything, efforts should be geared towards strengthening it through enhanced capitalisation so that the scope of its coverage can be further broadened.

“We are aware that some national and international rating agencies have scored the BoI high in recent times.   In the history of development finance in Nigeria, the performance of BoI clearly stands out.   It is certainly not a perfect institution, there will always be room for improvement; and the business community regularly engages with the bank on how performance can be improved and impact optimised.   But it is better to improve the performance of an entity whose activities are satisfactory, than dismantle it and start another process of rebuilding.

“We, therefore, submit as follows:   “The existence of the BoI has made the creation of the Development Bank of Nigeria unnecessary.   It would amount to a waste of legislative time, result in avoidable distractions and lead to incurring of costs which the country cannot afford at this time.   We therefore conceptually disagree with the idea of creating the bank. The emphasis at this time should be to strengthen existing Development Finance Institutions for effective delivery of their mandates. This includes BoI, BOA, NEXIM and Infrastructure Bank. Urgent legislative action should be taken to regularise the BoI Act so that the institution can continue with its work with minimum distraction. “

LCCI further noted: “We have bigger issues with development finance in agriculture.

“There are profound capitalisation, capacity and governance issues with the Bank of Agriculture (BOA).   If there is any gap to urgently fix in the DFI space, it is in the BOA. But the bill did not even make any mention of this aspect of the DFI.

“Yet there are so much policy pronouncements about transformation of the agricultural sector and self-sufficiency in food.   We therefore urge the National Assembly to focus on strengthening the capitalisation and capacity of the BOA at this time.   We do not subscribe to the proposition in the bill that the proposed Development Bank of Nigeria should be financing commercial agriculture including fishing and aquaculture, when there is BOA gasping for breath. This position should be reviewed.”

Similarly, former Minister of Commerce and Industry, Engr. Charles Ugwuh, also kicked against the scrapping BoI.

He said that BoI should be allowed to continue with its operations having evolved overtime, adding that there was the need for the creation of many Development Finance Institutions, DFIs in Agriculture, Construction, Energy, Oil and Gas and Transportation/ Logistics to drive the rapid transformation that was required.

Ugwuh said, “Let the Bank of Industry continue with  its focus and activities while the Assembly can midwife another large DFI which can grow and take up some other vital areas of the Nigerian economy. Lean and effective organisations with clear focus are needed at this time not bureaucracy.”

Also kicking against moves to scrap BoI was the Nigerian Labour Congress, NLC, just as a National Executive Committee member, NEC of NLC, Issa Aremu, told the Committee that the organised Labour welcomed any bill that was in principle, but removing the BoI was like starting an experience, adding that the NLC was nervous when it heard of the move to scrap the BoI.”

Also kicking against  disbandment bid  was the Nigerian Economic Summit Group, NESG. In his presentation, the CEO of NESG, Laoye Jaiyeola who warned that the Senate must be careful in constructing what will not be good for the people, said that the BoI must be left to continue its good job.


Kindly Share This Story:
All rights reserved. This material and any other digital content on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from VANGUARD NEWS.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.
Do NOT follow this link or you will be banned from the site!