Stakeholders pick holes in government’s plan to privatise BoI, BoA

Stakeholders in the trade and industry sectors have raised concerns over government’s plan to privatise the Bank of Industry (BoI) and the Bank of Agriculture (BoA), stating that the move will erode the purposes for which they were first established.

The Federal Government recently indicated plans to privatise these two key development institutions in order to make more funds available and give room for increased efficiency. But in a communiqué signed after a council meeting at the Lagos Chamber of Commerce and Industry (LCCI), the chamber says privatising the two major Development Finance Institutions {DFIs} will make them profit-oriented rather than development institutions as private individuals are poised  to seek profits at the expense of the supposed beneficiaries.

“The basic objective of development finance is to support the growth and development of the real sector and infrastructure in the economy which entails the provision of subsidised long- term affordable finance to investors in these sectors,’’ says the chamber, after the meeting presided over by Remi Bello, president, LCCI, last Wednesday.

The LCCI insists that privatising the institutions will have consequences for the capacity of the real sector to grow and create the much needed jobs, wondering why private entities will lend to real sector players at single digit rates when cost of funds in Nigerian financial markets is between 18 and 30 percent while over 70 percent of them are short tenured. 

“Government should rather improve on the capitalisation of the DFIs and create a framework that would allow for their independent and professional management,’’ says the chamber, adding  that it is important to develop models and structures that will make public institutions work rather than duplicate or discard them. 

As the 2015 general elections approach, the council urges key institutions involved in the electoral process to demonstrate highest level of independence, transparency and fairness in the discharge of their responsibilities, asking political actors not to overheat the polity.  

On Ports situation,  the chamber expressed concern over cost of cargo clearing and general operating cost in the Nigeria ports, saying that  Nigerian ports have gained reputation as one of the most expensive ports to do business in the world.

It urges the government to ensure more effective regulatory environment in the ports to protect port users, while undertaking more investments there to increase the capacity to take bigger vessels in order to reduce the cost of freight to the country. 

“There is also need to look at the other factors such as access roads to the ports, the tank farms, the resuscitation of the rail system to evacuate cargo, resuscitation of refineries to ease the pressure on the tank farms; the customs documentation,’’ adds the chamber, stating that the approach should be holistic to create a more efficient port system and reduce congestion.

ODINAKA ANUDU