By Omodele Adigun
“Entrepreneurs who are rural dwellers could not plug into the formal financial system”, says Professor Babangana Zulum, Borno State governor.
Giving reason for this, he explained that it was due to the opportunity barriers created by the banks’.
Lamenting that this is the root cause of poverty and crimes in the society, he accused the banks of double standard, saying they take a lot of deposits from the North, lend them to Abuja and Lagos customers and then deny the Northern depositors loans.
They “now come up with insecurity excuses or even in some cases, those who are a little secure, as you can say,” they “classify as politically exposed persons,” he fumed.
The governor, represented by Senator Aba Aji, the Secretary of North East Governors Forum expressed this grievance recently at a public forum in Lagos. where he chatted a way forward for the lenders.
Excerpts:
Agriculture financing
There is insurgency, banditry, kidnapping, robbery, fraud, stealing and other vices in the country today. Indeed, poverty in Nigeria, as a whole, not just in the North, is being caused by corruption. The fight against corruption has remained a constant declared priority of succeeding administrations in the last few decades. Corruption has been identified as one of the main threats to Nigeria’s ambition of achieving the 2030 goals of Sustainable Developments and its aspiration to lift more than hundred million of Nigerians out of poverty in the next 10 years. The mainstay of the northern Nigeria, as you all know, is agriculture, but inadequate financing has continued to bedevil this important sector. Poor banking support for agriculture in Northern Nigeria has created and perpetuated a weak agricultural system in the region.Banks, being the institutions of financial intermediation are expected to assist agriculture by providing finances to improve production.In his writing: “Effects of poor banking support for Agriculture in Northern Nigeria ,” Mahammud Hadiza Adaeze, asserts that it poor banking support for Agriculture in Northern Nigeria that has caused the gross reduction in the output of agriculture. He argues that “regulatory agencies need to improve on policies on banking support for agriculture and banks, in turn, need to establish agriculture lending units, equipped with skilled manpower capable of working with formers to achieve the desired production capacity. “I personally share Mahammud’s insight into the adverse effects of poor banking support in Northern Nigeria. It has remained one of the root causes of poverty particularly in the rural areas. “I therefore make a passionate appeal to all bankers to liberalise their lending policies to Northern Nigeria farmers and other entrepreneurs.
Landscape
When you go through the length and breadth of Northern Nigeria, you will see rich arable land with vast bodies of water and rivers. It all shows the region that is blessed with variable minerals such as gold, thyme, bauxite, zinc, limestone, columbite, lead, gypsum and other precious stones. And here, poverty pervades. This is because most of its largely agrarian entrepreneurs who are rural area dwellers could not plug into the formal system due to opportunity barriers created mainly by the banks. The paradox is, the Northern Nigeria is not unbanked, almost everybody has a multitude of branches in the Northern Nigeria. These branches are very quick and often fiercely competitive when it comes to deposit drive. But they are also not forthcoming when it comes to lending. That is when they come out and accuse, either the applicants or businesses domicile in the high risk areas or it is a politically exposed person.
The point I am making is that, in spite of the insecurity, the banks have not relented in their deposit drive. They chase every kobo and they intensify as they sent incentives to their staff to get deposits regard less of the security situation. Now it is the relationship between your deposit drive on one hand and and your advance lending practice to the North on the other. That is the main argument here.So, regardless of the situation, for both sides, the lending and deposit drives, the security situation is the same. So it is a common denominator. But these are people and businesses whose deposits you take from the North and you lend to Abuja and Lagos customers.And you deny them loans because you now come up with insecurity excuses or even in some cases, those who are a little secure as you can say, you classify as politically exposed persons.Our argument here is that you are taking a lot of deposits from the North, give as much as loans in the same zone.
Budget planning
The three geo-political zones in Northern Nigeria are often reported as highly poverty indices that are worse than those in other zones. So how do we rebuild the economy of Northern Nigeria in the prevailing context of increased insecurity and its concomitant trauma of losses, homelessness, and internal displacement. Banks as valuable partners are cherished by all governments. This partnership can be synchronized and cultivated to route budget replan. States across the length and breadth of Northern Nigeria are increasingly embracing the practice of planning. Every state now has a strategic plan for nearly everything. While it is good that they are beginning to wake up to the realities of the need to make well thought out plans, there is a need to ensure sustainability of the planning and also the need to follow to the effective implementation of these plans. Banks can deploy their private sector acumen to assist governments. On our parts, we must also continue to create jobs through the provision of special centres for vocational acquisition across the North. We must continue to create educational and training environment that are not only attractive but conducive to unleash the creative ingenuity of our youths.
Scorecard
What Borno State is doing to mitigate insecurity, which is the concerns of the banks? These are some of the things we are doing:
We are providing various levels of comfortable learning environment in major schools, training teachers, improve the ambience of academic learning and providing incentives to young people who are willing to study or teach outside their comfort zones; we have embarked on skills and imparting education and grossly increase women and girl- child education.
We have also committed to the provision of conducive enabling environment for private sector participation. We will continue to provide the necessary incentives to attract investments that can generate jobs for all people.
