Despite disbursing $18 billion stimulus package and about N39 trillion loans to customers in the last one year, some vocal critics of the Nigerian banking industry have accused it of being a major contributor to the menace of corruption, poverty, unemployment, insurgency and related crimes ravaging the country today.
According to Prof Babagana Zulum, governor of Borno State, whose domain is under the Boko Haram seige, poor banking support for a critical sector like agriculture, particularly in the Northern Nigeria, has affected and weakened the once vibrant sector thereby negatively distorting economic development in the region.
The governor lamented that as a result of the banking industry failures “the three geo-political zones in Northern Nigeria are now rated as zones with high poverty indices that are worse than those in other zones. There is insurgency, banditry, kidnapping, robbery, corruption, fraud, stealing and other vices. Indeed, poverty in Nigeria, as a whole, not just in the North, is being caused by corruption.
Corruption has been identified as one of the main threats to Nigeria’s ambition of achieving the 2030 goals of Sustainable Developments and its aspiration to lift more than hundred million of Nigerians out of poverty in the next 10 years,” Zulum lamented.The governor, represented by Senator Aba Aji, the Secretary of North East Governors Forum, who stated these recently at a public forum in Lagos, added: “The mainstay of the Northern Nigeria, as you all know is agriculture.
Banks, being the institutions of financial intermediation, are expected to assist agriculture by providing finances to improve production. But inadequate financing has continued to bedevil this important sector and poor banking support for agriculture in Northern Nigeria has created and perpetuated a weak agricultural system in the region. “When you go through the length and breadth of Northern Nigeria, you will see rich arable land with vast bodies of water and rivers.
It all shows that region is blessed with variable minerals such as gold, thyme, bauxite, zinc, limestone, columbite, lead, gypsum and other precious stones. But here, poverty pervades. This is because most of its largely agrarian entrepreneurs who are rural area dwellers could not plug into the formal system due to opportunity barriers created mainly by banks. I, therefore, make a passionate appeal to all bankers to liberalise their lending policies to Northern Nigerian farmers and other entrepreneurs.”
A recent report by the Central Bank of Nigeria (CBN) on the Depository Corporation Survey report for August 2020 put credit to the economy at N38.67 trillion just as its Governor, Godwin Emefiele, disclosed that combined stimulus measures to the economy stood at about US$18 billion, which is close to 4.5 per cent of the GDP.
