Since
1999, the civilian government has stepped up measures to promote industrialization.
Beside the drafting of a new industrial policy—with the array of incentives,
Government has also embarked on two new bold, albeit controversial, initiatives
to boost industrialization--- the setting up of the new Bank for Industry
(BOI), and the Small and Medium Industries Equity Investment Scheme (SMIEIS).
The bank was introduced as a development institution to accelerate Nigeria‘s
industrial development through the provisions of term loans, equity finances
and technical assistance to industrial enterprises. It is a combination of the
Nigerian Industrial development Bank and Nigerian Bank for Commerce and
Industry
(NBCI).
The orientation has been developmental in nature to make a
considerable impact in terms of long-term (sanctions and disbursement),
employment generation, industrial dispersal and promotion of indigenous
entrepreneurship. It inherited under its fold the Industrial and Insurance
Brokers (IDIB), Leasing Company of Nigeria Limited (LECON), NIDB Consultancy
Limited and NIDB Trustees Limited, which belong to the old NIDB. The Nigerian
Bank for commerce and Industry another bank which it inherited was established
in 1973 with an authorized share capital of N200.00 million while its
capitalization was expected to be N600.00 million at the conclusion of the
re-structuring in 1999 to enhance its delivery capacity. The bank was
established to provide financial, technical and management support services to
Small and medium scale industries.
The
SMIESIS Fund, to which commercial and merchant banks are expected to contribute
about 10 percent of their profits is another scheme directed at promoting the
SMEs. The major pressure point about these measures pertains to the non-market
features and hence the susceptibility to failures as with the earlier directed
credit schemes. Given the pervasive corruption and the weak institutional
foundations, many analysts fear that the funds might end up as another piece of
‘national cake’ to be eaten up by corruption. The 12 funds are unlikely to get
to the intended beneficiaries, and the loans might end up as bad and doubtful
debts—which would cripple the operations of the funds in the future.