The Development Bank of Nigeria (DBN) would be taking off July 1, 2016. This is a most welcome development in our polity. It indicates the willingness of the federal government to forge ahead with policies and programmes that are geared towards impacting meaningfully on the life of the people even if those programmes were not conceived by it.
The Development Bank of Nigeria is an initiative of the previous administration established in partnership with the World Bank Group/ International Finance Corporation with an initial $500million capital to address issues of financial inclusion and accessibility. The DBN, according to the project manager of the Nigerian infrastructure project, Mr. Ubong Awah, is a purely wholesale bank that will leverage the retail distribution channels of existing commercial banks and development finance institutions in the country. The Bank will also employ the on-lending business model in its operations, and together with the Nigeria Collateral Registry (NCR) – a project of the Central Bank of Nigeria (CBN) – will address the challenges of access to finance and collateral.
Nigeria’s Bank of Industry is also a development bank that is designed to address, to a large extent, the issue of access to finance and financial inclusion in order to boost the operations of MSMEs in the country. The extent to which the Bank of Industry has achieved this mandate is not particularly commendable. The BoI has failed the MSME sector for reasons known only to it. This is why we are more than a little concerned about the DBN. We all know that MSMEs are a vital organ in the development and growth of any economic system that intends to sustain itself and the society dependent on it. The MSMEs provide the grease required to keep the industrialization pursuit of the economy on a desirable momentum.
This Development Bank must not go in the way of others before it, we have come a long way and it is time for all agencies and institutions including players in the development field to pull their all to ensure the success of this institution. We trust that the rules are unlike the usual World Bank/International Monetary Fund that are completely anti-people packaged with intent to destabilize instead of stabilize. This Bank has a huge market; Africa’s largest economy is said to have an MSME population of about 37.9 million with only 14.6 per cent domestic credit in 2014. Compare this to South Africa’s 67.2 per cent in the same year the picture is gloomy and the message is clear – we need to reassess and evaluate existing policies in order to make the new ones work.
Nigeria is well endowed with resources that with proper harnessing will make her great, problem is with policy formulation and implementation. Those who design our policies are stuck with the notion of one-size fits all syndrome. This is why a lot of times the so- called fantastic policies drop like dead weights on issues they are meant to tackle. Job creation and employment generation lies with economic policies friendly to MSMEs.
source: Leadership News
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