BoI Rejects Senate Bill to Establish New Development Bank

  • CBN, finance ministry back move

Omololu Ogunmade in Abuja

The Bank of Industry (BoI) monday rejected a Senate bill seeking to create a fresh development bank, National Development Bank of Nigeria (NDBN), saying the move was anti-people

But the Minister of Finance, Mrs. Kemi Adeosun, the Governor of Central Bank of Nigera (CBN), Mr. Godwin Emefiele, threw their weight behind the bill, saying it would help to foster the nation’s economic recovery.

These divergent positions were made at a one-day public hearing organised by the Senate Committee on Bank, Insurance and Other Financial Institutions in National Assembly on a bill seeking to establish NDBN monday.

In his submission, Acting Managing Director of BoI, Waheed Olagunju, said BoI as currently constituted was living up to its mandates which he said were not different from what objectives contained in the bill.

According to him, instead of seeking to scrap BoI, the federal government should rather 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).

In his word: “We are of the opinion that BoI as presently constituted is fulfilling the mandate envisaged in the proposed legislation by supporting genuine entrepreneurs. Therefore, it should be left to continue its operations as it is. The merger envisaged in the proposed bill has already taken place.

“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 the failure of similar DFIs in the past such as NBCI, NERFUND, People’s Bank, Community Banks et cet era

“We advise that the National Assembly support industrialisation by enacting legislations 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,” Olagunju said.

In her submission, Adeosun who was represented by a Director in Ministry of Finance, Christopher Gabriel, said the ministry strongly supported the draft bill adding that the proposal was in line with reconstruction of the federal government.

She hailed the eight National Assembly for its efforts to come up with a bill that would address the economic problems confronting financial institutions in Nigeria which he said was purpose of development banks.

In his presentation, the Governor of CBN represented by Okwu Nnanna, a Deputy Governor on Financial System, said CBN had no objection to the proposed bill, insisting that the bill, when passed, would address the challenges facing the economy.

In his opening remarks, Senate President Bukola Saraki, said the National Development Bank of Nigeria (Establishment) Bill would give Nigerians access to financial opportunities.

“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 issues as the values to be derived from the merging proposed under the bill especially affecting other SMEs financing institutions and the advantages or otherwise of seeking a one-stop-stop special purpose SME financial entity,” Saraki said.