BANKING FOR PROSPERITY

At the Launch of Bank of Industry Limited

Abuja, 17 May, 2002

I am indeed pleased and it gives me much satisfaction to launch the new Bank of Industry, which is a new institution that has assumed the mandates of the erstwhile Nigerian Industrial Development Bank (NIDB), the Nigerian Bank for Commerce and Industry (NBCI), and the National Economic Reconstruction Fund (NERFUND).

At the inception of this Administration three years ago, our national economy was virtually in a state of paralysis with an industrial sector that existed more by name than in production. We had little choice but to adopt policies that would reverse the ominous trend, and revive the industrial sector as a veritable means of increasing prosperity, generating employment and eradicating poverty.

We reviewed the policies, schemes and institutions that were in place over the years for financing industrial enterprises. An assessment revealed that the private-owned commercial and merchant banks were not meeting the needs of industries, while the government-owned development finance institutions (DFIs) had not been able to fulfill their mandate of channeling long term finance to industrial and agricultural sectors. Apart from being in very poor financial state, the DFI’s also needed to have their operations rationalised and streamlined to eliminate overlapping functions, and refocus their energy and resources to perform more effectively.

The birth of the Bank of Industry marks a new beginning in our national efforts to turn our country into an industrialized nation. And I am pleased to note that this event is appropriately taking place at a time when the forces of globalization make it imperative that we redefine, and pursue our industrialization strategy with much urgency. However, for us to be successful in the quest for achieving industrial greatness, all the stakeholders in this economy will need to perform their roles optimally.

As we embark on another DFI initiative, and in order to avoid the mistakes of the past, the Bank's management shall be held responsible, individually and collectively for the institution's activities and fortune. Management decisions, particularly on loans and investments, must be based purely on merit and professional considerations. For it is only when the Bank supports and promotes viable projects that its loans would be recoverable, which in turn would ensure the Bank's viability, sustainability, and its continued existence, to enable it fulfill its mandate.

On its part, Government will continue its efforts to improve the investment climate in Nigeria, provide the Bank with adequate financial resources, as well as protection from political interference in its operations, so that the Bank can perform unfettered and meet the high expectations of our industrialists and people. In this regard, the Bank's authorized share capital has been set at Fifty Billion Naira. Its actual paid up capital is to be increased in phases over time, and as the Bank's operations warrant. The idea is to strengthen the Bank's Balance Sheet, to enable it mobilize resources from within and outside the country, to augment equity funding.

Let me say this to the industrialists who would be customers of the Bank of Industry, that while the Government will provide funding to enable the Bank lend at concessionary interest rates, no one should regard the facilities from the Bank as “share of the national cake". Loans obtained are to be repaid promptly, failing which necessary and decisive sanctions shall be applied by the Bank to recover its debts.

Ladies and Gentlemen, I am confident about the success of the new Bank of Industry. I commend the pain-staking efforts and diligence of the supervising Ministry, the Federal Ministry of Industry (FMI), in packaging the new Bank, the selection of the Executive Management team, and installation of appropriate strategy, structure and systems, to support the successful take-off and operations of the Bank.

There are already signs that our efforts are yielding positive results in the industrial sector. For instance, the contribution of the manufacturing sector to the Gross Domestic Product in 2001, rose to 16 percent, from a negative 3.9 percent in 1998, while the industrial capacity utilization has risen in the last three years, from 28.5 percent in 1999, to almost 15 percent, last year. It is my hope that the establishment of a Bank of Industry, will result in significant improvements in these indices.

Ladies and gentlemen, it is now my pleasure to formally launch the Bank of Industry, and commission its commencement of operations, with the sincere hope that its pioneer Management, staff and indeed customers, would share in this Administration's determination to bequeath to this nation, an industrialized and prosperous economy.

I thank you all.