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MAN, LCCI, Others Oppose Senate on BoI Scrapping

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  • MAN, LCCI, Others Oppose Senate on BoI Scrapping

The plan by the Senate to repeal the Act establishing the Bank of Industry and replace it with a National Development Bank of Nigeria has been criticised by several professional groups and workers’ unions.

And if the NDBN Bill, which has passed a second reading at the Senate sails through, the development bank will have take off capital of $323m.

But the Manufacturers Association of Nigeria, the Lagos Chamber of Commerce and Industry, the Association of Professional Bodies of Nigeria and the Trade Union Congress said the action would amount to waste of time and resources.

The President of MAN, Dr. Frank Jacobs, said that the new development bank could suffer political interference in its operation, which might grossly affect the performance of its core mandate given the composition of the Board of Directors and heavy reliance on the Federal Government for funding.

Jacobs concluded that setting up another development bank would amount to a duplication of the one already inaugurated by the last administration, adding that this was a development that the country could not afford at this time.

He said, “Instead of concentrating effort on the establishment of this proposed bank, the National Assembly should assist the Executive in making operational the Development Bank of Nigeria established by the last administration in March, 2015.

“The emphasis at this time should be to increase the capital base of the BoI and the other existing DFIs for effective delivery of their mandates.”

Jacobs, who spoke with one of our correspondents, expressed concerns about changing the status of the BoI, noting that the bank was a product of merger of the defunct Nigerian Industrial Development Bank, Nigerian Bank for Commerce and Industry and the Nigerian Economic Reconstruction Fund in 2001.

“For all practical purposes, this merger has been consummated, and the BoI has been functioning and delivering on its mandate within the available funding capacity,” he said.

He also declared that manufacturers would not provide the funding for the proposed development bank.

Reacting to Section 16[1] of the Bill, which listed MAN as one of the possible sources of funding for the NDBN, Jacobs, in a memo made available to one of our correspondents, said, “Members of MAN are supposed to be beneficiaries. It is therefore difficult to see how they will also be part of the institutions that will provide funding for the bank.”

The Lagos Chamber of Commerce and Industry also said it “has strong reservations for the proposition in the Bill seeking to establish the NDBN.”

The Director General, LCCI, Mr. Muda Yusuf, anchored the chambers’ position on the premise that the BoI was a product of the merger of four defunct banks, adding that since the merger being sought for had already been carried out, it would be a waste of legislative time and a distraction to all stakeholders for the process to continue.

“If the BoI Act has not been regularised, then that should be done urgently. The value of legislation lies in the spirit that drives it. The spirit of this bill is to consolidate a number of institutions into one entity for the purpose of delivering a development finance function more effectively. This has already been done as embodied in the current operations of the BoI,” he said.

The TUC agreed that the BoI was performing its assigned duties to the satisfaction of stakeholders.

The Vice-President, TUC, Olusoji Salako, advised that instead of scrapping it, the bank should be restructured if it was experiencing legal or structural issues.

Similarly, the President of the APBN, Dr. Omede Idris, at a press briefing in Abuja, after the organisation’s board meeting, said the group was opposed to the bill.

“By the track record of the BoI, merging it will be a disservice to the bank and the nation. The BoI should continue to function as a separate entity, based on its impressive performance over the years. However, it should be recapitalised, to continue to play its statutory role. The moribund NBCI and NERFUND could be liquidated,” the APBN president advised.

The group also criticised the Communication Service Tax Bill currently before the National Assembly and what he described as “multiple and unusual high taxation” by both the Federal Inland Revenue Service and the Joint Tax Board.

He said, “The proposed tax focuses on the provider. There is no doubt, however, that the customer will eventually bear the pain. Any additional tax burden put on Nigerians under any guise now will inflict more pains. The APBN strongly believes in business. However, telecommunication services, which are of necessity rather than luxury, should not be subjected to such hike in tax.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.