Expect new taxes in 2022, says Finance Minister

By Henry Umoru

THE  Minister of Finance, Budget and National Planning, Hajia Zainab Ahmed told the Senate yesterday that criteria currently being used for disbursement of N500billion Development Fund across the six geo – political zones would be reviewed for evenness and to avoid disparity. 

Ahmed spoke  yesterday in Abuja when she appeared before the Senator Sani Musa, APC, Niger East led Senate Ad- hoc Committee  that is probing  into the alleged un-even disbursement of the N500bn Federal Government loans already given out to Micro  Small  and Medium Enterprise (  MSMEs in the six geo-political regions by Development Bank of Nigeria.(DBN).

The Minister who pledged to meet with the development banks management and their regulators, the Central Bank of Nigeria, to carry out the review of the criteria for loans disbursement,  however, cautioned that such review would not  be too flexible to ensure the sustainability of the development banks.

The Minister said,  “I have been given copies of reports already submitted to the committee by the development bank and promised to look into the  criteria of  accessing  funds from the development banks with a view to making adjustments where possible.”

“The criteria to access funds from the development banks are set by the supersing ministry. The last one was targeted at the technology sustainability plan. 

“The Development Bank of Nigeria was set up to enhance the development of the MSMEs across the country but it doesn’t lend directly to the beneficiary businesses. Instead it lend to them through microfinance banks. The MFBs also provide criteria for the lendee and do credit analysis. They send their reports to the DBN which would collate the report and approve for disbursement. 

“The criteria set by the DBN was reviewed by the regulator and approved by CBN. The Bank of Industry was set up to also stay healthy as a bank. It has done very well in terms of loans repayment. it is the only financial development institution that is giving dividends to the Federal Government.

“Whatever we lend to them is not enough to make them carry out their objective. We will provide to the Committee, the criteria for disbursing loans, the schedule of shareholding of the federal government in each of the development banks and the list of other shareholders. We will also provide how much intervention we had had put in to the banks as a government over a period of time.” 

Earlier in his remarks, the Chairman of the Committee, Senator Sani Musa who noted that the Federal Government supported the development banks so that they would not be using the same considerations that commercial banks are using, said, “We want to know the conditionalities that are making it very difficult for the MSMEs to access funds from the development banks, there is the need to look at it critically.

“We want to know the criteria being used by the development banks to disbusrse funds because we know that the standards were set by the Central Bank of Nigeria.

“The criteria should be such that the weak MSMEs would be able to access it. The Bank of Industry for instance, was set up to industrialize Nigeria. It means every part of the country must be considered. 

“The Nigerian economy is being run by the MSMEs because we have about 39 million of them across the country. We need to ensure their survival.”

Also, Senator Ibrahim Hadejia, APC, Jigawa South East said, “There is the need for us to know the criteria used in the disbursement of the loans. We need to know the core objective of establishing the BoI. Is it for it to generate profit alone? It is a development bank not necessarily means that it had to generate income. Income generation could be a secondary objective, it shouldn’t be the primary purpose. What is important is that we should have the criteria.  The bulk of the money is from the Federal Government it has to be spread across the country. It is meant to intervene and provide support for the micro enterprises. Only 16 per cent of the funds to manufacturing and six per cent to agriculture. It is meant to breach the gap between a state that is above the poverty line and those that a wallowing in poverty”.  

On his part, Senator Yusuf Yusuf, APC, Taraba Central said, “If the loans being disbursed by development banks were guaranteed by the Federal Government, they are sovereign loans which must be guided by the principles of even distribution. The DBN said the PFIs which are primarily commercial banks and micro finance banks use their own criteria to give out loans not by geographical consideration. The PFIs and Commercial banks are basically for profit and not for development.”

The Senate had  following a motion by Senator Ali Ndume, APC, Borno South set up the adhoc panel chaired by Senator Sani Musa  to investigate the matter.

Ndume had claimed that the South-West geopolitical zone in the country, especially Lagos State, had the largest number of the laons beneficiaries.

The chief executive officers of the affected banks like the Development Bank of Nigeria and the Bank of Industry among others had told the panel that they adhered  strictly to the criteria set up by their regulators and not geopolitical considerations in giving  out loans which made the committee to summon the Minister of Finance.

Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.