Nigeria’s proposed Development Bank, would kick off with a staggering $1.3 billion capital.
The bank is proposed to begin full operations by January 2017 with the mandate to provide funding for existing and start up Small and Medium Enterprises (SMEs).
Minister of Finance, Mrs. Kemi Adeosun who made the disclosure described the sector as a “very critical sector” that accounts for 50 per cent of the nation’s Gross Domestic Product (GDP), adding that investing in the sector will catalyse more “activities in the economy.”
The minister who was a guest speaker at The Wealth Creation Platform, organised by the Kingsway Christian Centre (KICC) in Lagos, stated that government was focused on bridging the infrastructure gap, adding that the Federal Government is committed to road construction next year. She added that government has created a Road Trust Fund in which both government and private sector money would be committed to funding road construction across the country.
She said government had received offers from foreign investors who were willing to invest in Nigerian roads.
“SMEs are 50 per cent of our GDP, it is obvious that if you invest in the SMEs that is where the growth in the economy can occur. Investing in the sector will unlock the potential in the economy.
“We are putting money into the Development Bank of Nigeria; that is a specialist bank that is focused on channeling low cost funds to SMEs. It is a project that was supposed to start two years ago but has been stalling.
We’ve got it going and we’re hoping it will take off in early 2017. That bank has $1.3 billion in capital that will be pumped into SMEs through micro finance banks and a few commercial banks at low cost because we know that once the SMEs grow you’ll start to see a lot more activities,” she stated.
According to her, Government plans to release the third tranche of capital vote before the end of the year to further demonstrate its commitment to road construction across the country.
“The infrastructure gap in Nigeria is $25 billion a year, every state of the federation has roads that are in really deplorable condition. What we are trying to do is to get government money into roads; secondly, we have created Road Trust Fund where we will put private money, particularly pension fund and invest it into roads.
“So what you should see in 2017 is massive focus on roads; not just government money. There will also be direct private money on rods that could be tolled.
The gap is too wide, government alone can’t do it, we have to bring in private money and once you bring private money they have to get their money back. Even foreign money will be injected into the Road Trust Fund, we’ve got offers from foreign investors who want to come in and invest in our roads,” she explained.