Nigerian government wants EU to invest in proposed Development Bank

European Union flag
European Union flag

The Federal Government has urged the European Union, EU, to invest in the proposed Wholesale Development bank through the union’s development financing outfit, the European Development Bank, EIB.

The Minister of State for Finance, Bashir Yuguda, made the call while receiving a delegation of the European Union led by the EU Ambassador to Nigeria, Michel Arrion.

Mr. Yuguda said the bid to set up a Wholesale Development bank has raised significant interest among global funding agencies.

According to him, the World Bank has pledged about $500 million to the proposal, while other development-oriented financial institutions like the African Development Bank, ADB, have also committed some funds for the take-off of the bank.

The minister explained that the aim was to boost the growth of the real sector by ensuring long term financing and drastically cutting down interest rate, adding that the federal government would soon be embarking on a road-show to some specific countries to raise more capital.

“We are developing a whole sale development bank in Nigeria,” he said. “The idea of the bank is to give long term financing to SMEs and increase their source of borrowing. We did a study of the informal sector, which showed that the sector constituted 45 percent of our gross domestic product (GDP).

The federal government, he said, has a firm belief that if it was able to increase their access to funds, especially long term, that would go a long way in increasing the GDP of this country and integrating them into the formal sector of the economy.

The EU envoy had earlier hinted that EIB is already well established in Cote d’Ivoire and Senegal as a development financier would like to boost their activities in Nigeria by funding long term projects.

Consequently, Mr. Yuguda urged the bank to take advantage of the investment opportunities open in the proposed bank and thanked the bank for its rigorous procedure in ensuring that the facilities they grant Nigerian banks were aligned to the nation’s development priorities.

“We know that EIB has been helping Nigeria banks. We are also aware that before they grant any facility to any bank in Nigeria they would normally seek for authorisation through your office (EU envoy) from the National Planning Commission, and I went through many of them while serving as the supervising Minister of National Planning.”

Mr. Yuguda, who earlier in 2014, brokered the deal for the EU’s grant of 512 million Euros (about N112 billion) towards supporting agriculture and rural development in the north as well as electricity and governance nationwide further welcomed Arrion’s request for EU to boost its support to the presidential Initiative for the North-East, PINE, in the rebuilding of the North East zone.

He said, “For Nigeria, the Federal Ministry of Finance, we are handling the safe school initiative which is a very big programme. We appreciate your concern in this regard and will be prepared to provide the necessary support to ensure that your efforts were in tandem with the Presidential intervention programme.”

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