Why Nigerians are not feeling impacts of development banks—Maa’ji
Lagos based development Economist; Dr. Aliu Maa’ji has explained why Nigerians are not gaining from several development banks instituted by the federal government over the years.
He linked the abysmal failure of the banks to excessive bureaucracy in their fund administration and lack of structured checks on people and bodies that have accessed their facility.
Maa’ji also disclosed that “many of the banks are not really giving the necessary working tools by the same government that set them up, thus programming them to fail after heavy investments with public fund.
Only recently, the Speaker of the House of Representatives, Mr. Yakubu Dogara, said Nigerians were not feeling the impact of Development Finance Institutions established by the Federal Government to serve as a catalyst for development.
He noted that despite the huge financial resources at the disposal of the institutions, they had made little impact over the years to grow Micro, Small and Medium Enterprises, among others.
Some the country’s DFIs include the Bank of Industry, Bank of Agriculture, Federal Mortgage Bank of Nigeria, Nigerian Export-Import Bank, The Infrastructure Bank and National Economic Reconstruction Fund.
Business Hilights recalls that President Muhammadu Buhari announced his administration’s plan to recapitalise the BoI and the BoA next year by making a provision of N15bn in the budget for the two institutions.
Speaking at a public hearing by an ad hoc committee of the House on the dwindling efficiency of the DFIs, Dogara noted that the House would support the government’s efforts to strengthen the institutions to be able to deliver on their core mandates.
Citing the example of SMEs, which he said had not been able to access loans for development despite the presence of the DFIs established primarily to serve this purpose, the aggrieved Speaker added, “The DFIs are established to serve as catalysts for the development of Micro, Small and Medium Enterprises and agro-based businesses. In most developing countries, the DFIs have been the springboard on which such countries became economy giants.
“The financial conditions of many development banks have deteriorated over the years owing to a number of factors such as the prevalence of macroeconomic instability, low repayment rates by clients, and significant shortage of investible funds.”