The Federal Government at the weekend reached an agreement with the World Bank Group and other development partners for the release of about $1.3billion for the funding of Small and Medium Enterprises (SMEs) with the planned takeoff of the Development Bank of Nigeria (DBN).
Nigeria’s Finance Minister, Mrs Kemi Adeosun, who broke the news at a post event press briefing in Washington DC, USA, stated that upon commencement, the Development Bank of Nigeria would serve as a conduit for government intervention in SMEs and medium sized enterprises as part of efforts to achieve inclusive growth.
Nigerian SMEs account for over 50 per cent of the country’s GDP, but have often been starved of funds due to inappropriate allocation mechanism that involve commercial banks and other stakeholders that are not genuinely committed to their growth.
Adeosun said that with the latest agreement with development partners, efforts are now being geared towards recruiting the key management staff of the bank to enable it commence full operation.
She said, “Agreement was also reached on the final steps for the take off of the Development Bank of Nigeria which had been stopped due to some issues. We have resolved all those issues and the recruitment process has now been finalised with management team put in place.
“This will release $1.3 billion which would be used to support our SMEs which are part of the engine that will spur the growth of our economy. With this development, SME lending at low rates will now be facilitated through the DBN and we are ready to resolve the outstanding issues,” she added.
The minister also said that the Nigerian team got the commitment of global partners including the U.S, United Kingdom, Canada and the World Group to assist the country repatriate illegal financials flows out of Nigeria back into the country to support the financing of critical infrastructures and economic empowerment programmes of the administration.
“We had a number of specific bilateral meetings with UK Department for International Development, the US treasury and other partners and pbased on the need to reverse the trend of illegal financial flows out of Nigeria,” said Adeosun. “We have agreed on a number of initiatives to achieve significant repatriation of monies illegally taken out of the country. These include monies that have been taken by way of illegal tax repatriation, tax avoidance as well as those illegally stolen by past government officials,” she added.
She however said that details of the agreement on repatriation of illicit financial flows would be made public after she had brief President Buhari on the matter.
Meanwhile, the minister said the Nigerian government delegation also held high a level discussion on the challenges in the power sector, largely bother on financial limitations, stressing that government has agreed to hold a workshop in Abuja in November 2016 with the World Bank Group, IFC, Multilateral Investment Credit Guarantee Agency (MIGA) which provided partial risk guarantees the Ministries of Power, Finance the Central Bank CBN, NNPC for the gas perspective, the GENCOs, DISCOs all the stakeholders in the power sector. She said the World Bank Group would be bringing its specialist power finance team to see how they can proffer financial solutions to the challenges of nigeria’s power sector. She stated that work on the proposed $1billion Eurobond has been concluded and that the Federal Government would soon appoint the various parties ahead of its formal launch.
Other high level meetings attended by the nigerian team included one with JICA, the Japan international cooperation agency and we secured their commitment to facilitate trade and investment in Nigeria, specifically they have agreed to make investments in agriculture, fisheries sector and we have made progress on the Jebba hydro projects which is also a power project.
“Our constituency which represents South Africa, Nigeria and Angola had a meeting here and we reviewed the fact that the allocation to our constituency are among the poorest particularly from the IFC is unacceptably low. So what we have agreed to do is that we will be hosting a meeting in Abuja in March for the three finance ministers and the idea is that we will benchmark and scale up our technical capacity to ensure that we are able to get more of what is available for the three countries. We also secured commitments from the Canadian ministry of finance to support us for roads and the they have successfully developed a PPP platform for road investment and they have offered to support us on the technical front in that regard.
The delegation also presented the family home fund which our affordable housing project to a number of prospective investors and development partners including the world bank, IFC, MIGA and the Islamic Development Bank, we’ve already received indicative interest and we’ll be coming back to tie up those funding commitments.
I’m We plan and have agreed technical support in the area of domestic revenue mobilization and we’re going to make more use of the IMF’s online training in financial management, we will be incentivizing our staff who are interested in taking these courses to do so.
Also speaking at the briefing Governor of the Central Bank of Nigeria, Godwin Emefiele restated commitment of the bank to fine tune the flexible exchange rate to meet the needs of the business community. “ But what we only have to talk about is fine-tuning few aspects of it, in terms of the implementation of the content of that document. That is why I said we would from time to time, continue to look at it. As we are looking at it, I repeat, we would see how we would continue to fine tune it, to the extent that whatever we are putting in place would be such that would benefit Nigerians, improve their lives as well as the country.”