Senate moves to establish N500bn Solid Minerals Development Bank

A bill to establish a financial institution known as the Solid Minerals Development Bank has passed second reading at the senate.

The bill, sponsored by Yakubu Oseni (APC, Kogi Central) , seeks to accelerate sustainable socio-economic development.

It also seeks to boost the solid minerals sector and the quality of life of the people by providing financial and non-financial investments in the sector.

The lawmakers have pegged N500 billion for the establishment of the institution.

The bill was read for the second time after Mr Oseni led a debate on it on Tuesday.

The bill, he said, is majorly aimed at satisfying the funding needs of the solid minerals sector in this country.

“The principal mission of the bank is to increase financial inclusion by providing access to credit finance.

“The bank will also support medium to long-term lending, with duration of up to 10 years and a moratorium of up to 18 months. This would enable borrowers in the sectors to have a lengthy period to repay the loans from the Solid Minerals Development Bank unlike the deposit money or commercial banks.”

He listed some major aims and objectives to include, providing loans to small, medium and large industrial enterprises, especially mining, quarrying, manufacturing and ancillary industrial support services and;

Providing short, medium and long term financing to participating financial institutions for on-loading to small scale, medium and industrial enterprises and projects especially in mining, quarrying and ancillary industrial support services; and where considered appropriate provide financing directly for the attainment of any of the stated aims and objectives of the Bank under the Act.

The lawmaker said the bank will also facilitate the provision of loans with five to ten years maturity including a grace period of one to three years, depending on the nature of the enterprise or project and Ioanable funds available to the bank.

The enactment of the bill, he added, will be a perfect answer to the diversification drive of the federal government outside oil as the bank will be a major driver of the economy especially in the solid mineral sectors.

He said aside the development of small businesses and the encouragement of entrepreneurial activity, the broader aim of the Solid Mineral Development Bank will include the redistribution of income between social classes, diversification of economy and job creation.

Smart Adeyemi (APC, Kogi) and Ibikunle Amosun (APC, Ogun) supported the bill, saying a bank dedicated to development would go a long way in developing the sector in the country.

Financial implications
In a copy of the lead debate seen by PREMIUM TIMES, the proposed estimated capital for the bank is put at N500 billion.

Projected recurrent expenditure (for salaries and allowances of personnel) put at N400 million, recurrent expenditure (for maintenance of vehicles, management costs of offices and other contingency) put at N60 million while estimated capital expenditure (for office accommodation, furniture, etc) put at N290 million.

Estimated capital expenditure (for purchase of vehicles) put at N100 million and total estimated cost for first year of commencement of the bank – N850 million.

After the second reading, the was referred to the Senate Sommittee on Solid Minerals to report back in four weeks.