Why AfDB, others withhold funding for takeoff of proposed Devt Bank of Nigeria

Apparent failure of Nigeria to meet certain criteria set aside by international financial institutions before they would fund the proposed Development Bank of Nigeria (DBN) has been responsible for the delay in take off of the bank in 2016.

The special bank, whose concept was approved by the Federal Executive Council in 2013 was originally billed to kick start in 2014, but was further deferred till the first quarter of 2015 and again given a new date of 2016.

But an official told Ripples Nigeria that there were still a lot of issues bordering on the funding and which must be sorted out with the international partners.

He said the AfDB, which was represented at the planning stage of the scheme insisted that all certain conditions set must be met by the country it is to provide about 45 per cent of the total sum, estimated at $684 million as its contribution.

Others, including the United Nations Trade and Development (UNTAD), with 25 per cent contribution of about $190 million, and the African Development Fund (ADF), expected to provide about $30.5 million, are all towing the same line.

“The AfDB, as the lead contributor has said it would make its fund available only, if Nigeria will appoint a chief exceptive officer from the private sector to run the new bank and without control from the CBN.

“It said also that the DBN board is to be made up of representatives of the interest groups, including those from the donor-agencies, the organised private sector and labour.

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“These must be on the ground, otherwise no new date has been accepted by the partners,” he stated.

The Minister of Finance, Kemi Adeosun, had in a public function in Lagos on Friday made a tacit reference to the bank’s fate, confirming that a new date for its commencement had been shifted to the first quarter of 2017 without giving any reasons for the new date.

Adeosun confirmed that the DBN is still interested to contribute to the initial take-off fund, estimated at $1.52 billion to be jointly contributed by the various partners.

She was silent on why the programme has been suffering series of delays in takeoff, despite claims by government that all facilities towards actualising the dream were on the ground even before its conception.

It is expected that when fully operational, DBN will mentor youths having start ups, and already existing small and medium size enterprises by way of soft loans at little or no interest rates.

There will be no much emphasis on collateral as such loan assistance to the entrepreneurs will be spread time using cooperative bodies as a medium.
By Emma Eke….

 

 

 

 

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