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Bank of Industry – Transforming Nigeria’s industrial sector

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Rasheed Olaoluwa, MD BoI

Rasheed Olaoluwa, MD BoI

The Bank of Industry believes there is a need to shift away from dependence on oil as the main revenue earner towards agriculture and mining. Recently, the bank convened a one-day sensitization forum on solid minerals in Abuja to task key stakeholders in the sector to develop strategies in the sector to position the country to convert its rich mineral resources to economic advantage.

According to Rasheed Olaoluwa, Managing Director, Bank of Industry (BOI), the bank’s objective was to re-examine the strategy for developing the solid minerals sector and to explore means of mitigating the numerous challenges inhibiting the sector from contributing significantly to Nigeria’s economic development. He added that the forum was also designed to look at how the sector could be made attractive to local and foreign investors, while exploring the most efficient ways of dicovering opportunities, especially in the mining and the quarry sub-sectors.

Olaoluwa emphasized the importance of the sector, especially in light of the current global economic crises caused by falling oil prices. In his words, “before independence Nigeria had a solid mining industry. However, from 1970s, the economy started relying extensively on petroleum. The dwindling oil reserves have made it imperative for Nigeria to refocus its attention on the abundant and existing minerals towards poverty alleviation, economic empowerment and job creation as recommended by the United Nations Economic Commission for Africa in its 2013 Report”.
He highlighted the bank’s contribution so far to the sector in terms of funding, stating that this had been made possible by the bank’s alignment of its operations with the strategic objectives of the Nigerian Industrial Revolution Plan (NIRP), which identified solid minerals as the sector which Nigeria has comparative advantage and as a key sector to achieving industrialization in the country.

Recently, BOI scaled the assessment for ISO 9001: 2008 Quality Management Systems Certification, making it the first and only DFI in Nigeria to be so certified and in record time. The certification according to DQS Management Systems Nigeria Limited, a leading certification body with global recognition and subsidiary of DQS Holdings Gmbh, Germany was in acknowledgement of BOI’s transformation of its activities in terms of raising its standards of operations, policies and excellent customer relationship in Nigeria.

Concerning the rationale behind the Local Content Initiative, Olaoluwa insisted that it is very essential and imperative for us to begin to drive domestic real sector development because no country has developed without some form of consciousness to get the local entrepreneurs involved in the key sectors.

He explained that the local content initiative can be traced to the first Secretary of the United States of America, Mr. Alexander Hamilton who developed a policy which essentially recommended the protection of U.S domestic producers. This was contrary to the then popular opinion led by the renowned British Economist, Adam Smith who suggested that the United States, being an agrarian economy, should focus more on agriculture where the country has more comparative advantage.
Hamilton formulated and championed the policies that heralded the development of United States of America’s industrial base. Besides the U.S, other countries such as Canada, Sweden, Australia, New Zealand, developed their economies on the strength protecting local producers, subsidizing production and promulgating policies that discourage foreign imports.
On this basis, it was the right thing to do. The idea was to give room for the Nigerian players with the emphasis on local production which can be done to create opportunities and values for Nigerians”, he added.

As an Oil and Gas Industry Initiative, the policy is fairly comprehensive but the challenge has always been that of implementation. The Honourable Minister of Petroleum has an important role to play in implementing the Act. There are a number of services that were identified to be ceded to the Nigerian players. The only exception was an approval by the petroleum minister for an oil company to engage a foreign firm on a particular project. Unfortunately, based on what has happened so far, it appears many of such waivers were granted without recourse to the Nigerian producers.

At BOI, approval for application for facility depends significantly on Nigerian ownership. This is because Nigerians need to begin to get some advantages in BOI. Our loans go to people who want to produce – real sector value addition, only. We do not give loans to traders.


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