THE Acting Managing Director of Bank of Industry, BOI Waheed Olagunju, yesterday against moves by the Senate to disband it following plans to establish National Development Bank of Nigeria (NDBN). If the Bill for an Act to establish the National Development Bank of Nigeria,(Establishment etc.) Bill, 2016 scales through, passed into law and assented to by the President, the BOI will no longer exist as the new bank would have taken over the hitherto functions of BOI.
Speaking yesterday in Abuja when appeared before the Senator Rafiu Adebayo Ibrahim led Committee on Banking, Insurance and other Institutions public hearing on the National Development Bank of Nigeria,(Establishment etc.) Bill, 2016. Olagunju told the Committee that the BOI as presently constituted was fulfilling the mandate envisaged in the proposed legislation, adding that what was necessary for the government to do at the moment, rather than scrap it was to provide BOI with more capital to be able to further support the real sector instead of duplicating functions by creating new Development Financial Institution (DFI).
Olagunju said: ” we are of the opinion that BOI as presently constituted is fulfilling the mandate envisage in the proposed legislation by supporting genuine entrepreneurs.
“BOI should be provided with more capital to be able to further support the real sector instead of duplicating functions by creating new DFIS, bearing in mind that that had been failure of similar DFIs in the past such as NBCI, NERFUND, People’s Bank, Community Banks etc. We advise that the National Assembly should support industrialization by enacting legislation that would help create an enabling environment for business to thrive such as an amendment to land Use Act, Tax incentives for SMES, establishment of industrial Park. This would substantially address the demand side challenges of finance SMEs in Nigeria as vagaries of the business environment has been making the sector unattractive to private and public lenders.”
Meanwhile, former Minister of Commerce and Industry. Engr. Charles Ugwuh who kicked against the scrapping of BOI, said that it 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, Constructionm, Energy, Oil and Gas and Transportation/ Logistics to drive the rapid transformation that was required.
In his position paper to the Committee, Ugwuh who was President, Manufacturers’ Association, MAN 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 organized 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 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.
In her remarks, Minister of Finance, Mrs. Kemi Adeosun who told the Committee that the Ministry was in total support of draft bill, stressed that the proposal was in line with the Economic reconstruction of the Federal governemnt. Represented by a Director in the Ministry of Finance, Christopher Gabriel, the Minister said, “we strongly support the draft bill, it is in tandem with economic reconstruction of the Federal government.
Also in his remarks at the Public hearing, the Governor of the Central Bank of Nigeria, CBN, Godwin Emefiele who noted that the apex bank was not opposing proposed bill, said that when passed into law, it would address the challenges facing the economy.
The CBN Governor who was represented by the Deputy Governor in charge of Financial System, Okwu Nnanna said that there were challenges facing the economy, and the biggest challenge was that of Capital.
Okwu Nnanna said, “we have no objection, we welcome this development, we have challenges facing the economy, and the biggest challenges is the Capital.
“The ability of the proposed bank to act as a catalyst for a rapid development will depend on how much money they need to work with. Secondly, we also took a look at the structures being proposed and we will also ask distinguished senators to examine closely about the structure of the bank. Executive Directors, members of the Board should be predicated predominantly on competence and experience.
“On whether the proposed bank will assist in rapid development, we at the Bank believe help in this regard, provided we take proper cognizance of the capital requirements. We are not whether the proposed bank will be one too many. As far as we are concerned, the more the merrier. Our entrepreneur, be it small, medium and large should be able to shop around. This will also introduce competition in the public space. But if the bank is not capitalized properly at the beginning, it is programmed to fail”
In his opening remarks, Senate President Bukola Saraki said that the National Development Bank of Nigeria (establishment bill) is one of those bills identified as crucial in expending Acess to finance opportunity to Nigerians. Saraki appealed to stakeholder to present honest opinions on the issue at stake to the committee so that the problem affecting SME in Nigeria can be addressed.
Saraki said, ” this is public hearing is therefore another avenue to seek intellectual and professional inputs from experts like you in the financial sector to query the framing of the bill. We will be very glad to get your honest opinions on such issuess as the values to be derived from the merging proposed under the bill especially affecting other SME financing institution and the advantages or otherwise of seeking a one-stop-stop special purpose SME financial entity.”
