Re­turn of Bank of the North

Daily Trust - - OPINION -

The 19 North­ern states gover­nors have kick-started a fund-rais­ing drive to rein­vig­o­rate the Bank of the North which was merged with some fi­nan­cial in­sti­tu­tions about a decade ago. In my un­der­stand­ing, it is a good step in the right di­rec­tion. We do hope that this time around the at­tempt to reestab­lish the bank will go be­yond po­lit­i­cal state­ments. You need the bank­ing sec­tor whether com­mer­cial or Is­lamic or mi­cro­fi­nance banks to ben­e­fit from the fed­eral govern­ment In­ter­ven­tion funds. Unar­guably North­ern­ers have ben­e­fit­ted with lit­tle or noth­ing with the Fed­eral Govern­ment In­ter­ven­tion Funds due to fi­nan­cial ex­clu­sion.

“The North had 18 out of the 82 banks in the coun­try, which was about 20 per cent, but grad­u­ally, we lost out. Out of the 23 that emerged, it is only the Unity Bank, which is a com­bi­na­tion of nine banks, that we can say is north­ern...” Al­haji Falalu Bello (Daily Trust, Sun­day, April 23, 2017). Per­mit me to say that out of the 23 ex­ist­ing Com­mer­cial Banks in the coun­try none of them has its high­est share­hold­ers by North­ern­ers not even the Unity Bank. The econ­omy of North­ern Nige­ria will re­main un­der­de­vel­oped as long as its peo­ples and their busi­nesses lack ac­cess to credit.

In my hum­ble opinion, with all the rich men in the North and the then serv­ing 19 North­ern gover­nors we were not able to raise N25 bil­lion to main­tain the struc­ture of at least one bank. The in­vest­ment of N1.3 bil­lion by each of the states would have raised N 25bil­lion. Run­ning a bank has a huge po­ten­tial.

A lot of towns in North­ern Nige­ria lack even mi­cro­fi­nance banks let alone, com­mer­cial banks. What does it take to set up a mi­cro fi­nance bank? It is only N25 mil­lion. Our state gov­ern­ments should en­cour­age the es­tab­lish­ments of Mi­cro­fi­nance Banks. Our rich men should also es­tab­lish mi­cro­fi­nance banks in order to pro­mote fi­nan­cial in­clu­sion. As im­por­tant as the bank­ing in­dus­try many North­ern­ers, for numer­ous rea­sons per­haps re­li­gion or lack of fi­nan­cial lit­er­acy are not bank­ing and lacked ac­cess to for­mal fi­nan­cial ser­vices. A lot of North­ern­ers are fi­nan­cially ex­cluded. North­ern Gover­nors should be or­ga­niz­ing sem­i­nars and other en­light­en­ment pro­grams for fi­nan­cial lit­er­acy.

A 2013 CBN re­port said: “Only an av­er­age of 18% of adults are Banked in North­ern Nige­ria. The North-west has the low­est rate of pop­u­la­tion that keep their money in the banks with only 13 per­cent. The North-east fol­lowed with 15 per­cent and the North -cen­tral has 27 per­cent of the for­mally banked pop­u­la­tion. CBN said the fi­nan­cial ex­clu­sion rate is worse in the North­ern part of the coun­try, with about 68 per­cent of the pop­u­la­tion ex­cluded from fi­nan­cial ser­vices in both the North- east and North-west re­gions” (CBN re­port Daily Trust, De­cem­ber, 27,2013).

Some of the rea­sons for the low per­cent­age of the fi­nan­cial in­clu­sion in the North is at­trib­uted to the av­er­age dis­tance to De­posit Money Banks (DMB) branches varies widely within Nige­ria, from al­most 60 kilo­me­tres in Kebbi State to less than 1 kilo­me­tres in La­gos State. Ed­u­ca­tional lev­els and fi­nan­cial lit­er­acy are also in­cluded.

In my hum­ble sug­ges­tion, the new Bank of the North to be es­tab­lished should be run pro­fes­sion­ally as a purely busi­ness enterprise. Pub­lic sec­tor in­vest­ments in Nige­ria have bad records of per­for­mance and sur­vival. Fur­ther­more, the most prof­itable govern­ment in­vest­ment is the Nige­ria Liq­ue­fied Nat­u­ral Gas (NLNG) sim­ply be­cause it is be­ing run purely as a busi­ness enterprise. NLNG is unar­guably the coun­try’s best suc­cess story. The com­pany was owned by four share­hold­ers: the Fed­eral Govern­ment rep­re­sented by NNPC (49 per cent), Shell (25.6 per cent), To­tal LNG Nige­ria Ltd (15 per cent) and Eni (10.4 per cent). We could adopt this ap­proach of pub­lic in­vest­ment for its suc­cess. We do hope the idea will work this time around.

Nu­rudeen Dauda, nu­rudeen­dauda24@gmail.com

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