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The Contribution Of Bank Of Industry (boi) To Industrial Development In Nigeria (1980-2010)
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In this process of transformation industrial development bank have
emerged as a catalytic agent of industrial and economic growth.
Development
banks are crucial in the economic development process of a country. In
Nigeria the development of financial institutions for development
purposes could be traced to 1946 when the ten years development plan was
launched by Britain. The first to emerge in the scene was the Nigerian
Local Development Board (NLDB), which made loans and grants to native
authorities, corporative societies and other related bodies were
established and recognized. At the definite of the board, the northern,
Eastern and western Regional development boards and Colony Development
Board (CDB) were setup thus, financial assistance to industrial and
agricultural projects. However, they had limited resources at their
disposal though their impacts were not widely felt.
In 1956, the
western region finance corporation (WRFC), the federal loans Board
(FLB), the Northern Nigeria Development Corporation (NNDC) and the
Eastern Nigeria Development Corporation (ENDC) were established to
promote industrial development in the country. The first official
development bank was NLDB (1946-1949). The second development finance
institution was CDB (1949-1956). It was established with N100,000 grants
from the regular government budget plus the colony share of the asset
of NLDB which has been shared among the regional components in the
country. It was charged with the dual role of facilitating both
government and private economic activities. FLB was the third
development finance institution, it was established in 1956 with one an
initial grant of N600,000, with the following functions:
I. To make loans to indigenous clients but not to the traders or for trading purpose.
II. Make loans of all types within the environs of Lagos up to a maximum of N100,000.
III. Share responsibility for longer loans in the region with Regional Corporation.
During
the period of the colonial development board in 1946, Regional
Development Boards like ENDC and NNDC were set up to operate on the
regional level. With the establishment of HLB, the various regional
development boards loan shares increased.
All the development finance institution at various levels had defects.
Firstly, they in most cases had every wide and ill-defined responsibility much beyond their special capabilities.
In
the attempt to narrow down their area of operations, almost to the
points of putting themselves out of business and operation for instance
FLB. In addition to its original restrictions on loans to trading and
foreign owned enterprise refused to grant loans to set up new business
on the ground that new investors are inexperienced and lack of knowledge
of new ventures. It also denied loans to prosperous enterprises on the
grounds that they were capable of raising capital from normal sources.
Furthermore,
it made working capital loans on the grounds that they were capable of
raising capital that could be gotten from commercial bank management
deficiency contribution in no small measure to the poor performance of
the finance corporations.
The operational defects and inefficiencies
of the regional development boards are summarized in the finding of two
commissions of enquiry. The caller commission of inquiry into the
affairs of certain statutory corporations in Western Nigeria and the
comprehensive review of the past operations and method of the Northern
Nigeria Marketing Board, the finding of the two commissions revealed
that many of the projects were recklessly entered without any regards,
whatsoever, for the safety of the resources that were being invested in
the various undertakings.
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