Fidelity bank banner UBA banner
How cosmetic growth compounds Nigeria’s industrial development woes

By Daniels Adeoye on 20/12/2013

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 2,653


Many, no doubt, still remember the recapitalisation exercise which dominated the financial climate in the country in 2004 when all banks in the country were mandated to raise their capital from N2 billion to N25 billion before the end of December 2005. That order sent virtually every bank in the country to the market to secure more capital injections. Before then banks in the country were more conservative in their pursuit for cosmetic ideals that only papered the crack of human capital and industrial development but afterwards, threw caution to the winds.

One of the principal reasons for that recapitalisation exercise, according to Prof. Chukwuma Soludo, the then Governor of the Central Bank of Nigeria (CBN), was that “banks have not played their expected role in the development of the economy because of their weak capital base and as such, the decision to raise the capital base of banks was with the aim of strengthening and consolidating the banking system.”

The question is, have banks really stepped up their interest in economic development since the N25 billion capital base was reached? And when multinationals are brought into the picture, one begins to wonder how much of developmental benefits they offer Nigeria, a fact which puts the merit of foreign direct investment to question.

For the banks, going from N2 billion to N25 billion represents an astronomical increase of 1250% in capital base. However, the resultant effect on the economy has been far from the expected result. According  to the National Bureau of Statistics, bank loan to small and medium scale enterprises in 2005 after which recapitalisation was to kick off was N50,672,60 billion but two years into the recapitalisation this figure only increased to N105,925,10 billion – just about a 100% increase. What is more, even the deals that resulted in that increase were not directly with small scale enterprises but the caption ‘small and medium scale enterprises’ was just a perfect cover for a  gradual neglect of small scale enterprise which account for 95% of firms, 60-70% of employment, 55% of GDP and generate a greater percentage of new jobs. In developing nations, of which Nigeria is one, more than 90% of all firms outside the agriculture sector are SMEs and microenterprises generating significant portion of the GDP (Barakat, 2001).

Development as a known fact is an aggregation of several policies, several ideals, and several projects, revealed by several indicators which in their individual strengths combine to form the aggregation called development. Banks in Nigeria have forgotten the ripple effect of most of their capital-generating measures in the country; in their drive to appeal to the vanity of Nigerians, they have succeeded in using a fraction of the hard-earned money of individuals and households in a country where over 23.9% of the eligible population are unemployed (NBS, 2013), where over three million children of school age are out of school in the northern region alone – to mention but a few of the woes of the country – to ship jobs out of the country. Jumbo offers such as cars, generators, and several offers have been promised as incentives for people to save. So when people put their money in banks, instead of the money being recreated in the economy to transform the economy through several measures, a portion of their money gets shipped out to bring in automobiles and the likes, yet these same people who would get such gifts will never be found eligible for start-up loans! Banks have succeeded in increasing the liabilities of the ignorant masses which puts them at the mercy of these banks consistently. No country develops by increasing liabilities; nations develop by increasing assets.

Multinationals have to a large extent helped in compounding these woes as they have succeeded in reducing creativity in showbiz. The entertainment industry has been fortunate with the multinationals since it represents one thing, one thing they care about: it is the fastest route to get their products across to the larger masses. And who would query that? – they aren’t the government; they are technically not interested in the development of the several sectors of human capital development that threaten their existence on a larger scale in the country. This creates the human capital gap which not only allows them to ship jobs out, but also allows them to bring in their people as expatriates.

Isolating a case out of several, in July 2013, students from the University of Ilorin with the help of some lecturers made some landmark breakthrough in aviation which requires funding; they are still on the lookout, yet a certain Olawale just won a reality show with a cash prize of N5 million and great gifts for singing on stage. While this is not to render the efforts of this young man useless – he certainly deserved it – it is just to state the obvious. The list is endless: from Project Fame to Idol West Africa, Idol Nigeria, Gulder Ultimate Search, there is n end to the jumbo parties where several millions are given to people who value the prizes of their imported customised cars, the value of their imported golden wrist watches and their expansive attires at the expense of consistent investment. This supports the objective of shipping jobs abroad, and why will they stop funding these projects when it in no way put the African continent on a map of development but reduces us to mere markets for them? A country as desperate as this and with key players in the economy as insensitive as this is a danger to itself.

These combined have calculatedly turned the country into just a market where finished products are to be consumed, a fact that keeps them in business. Inputs which could easily be supplied by small firms in the country are preferred imported, while we keep singing and dying. The holier than thou mentality which makes a black man confident of calling his brother darker has done more to damage  our collective strength to fight underdevelopment than any other. That a man can feed and call some others slaves makes him think he is out of the cycle, but both the slave  and the slave master are at the mercy of the producer, and so we all are until the  status quo is changed.

Prudent policies aimed at controlling the corporate social responsibilities of multinationals towards the relevant sectors that drive real economic growth and development rather than the cosmetic growth prevalent should be vigorously pursued, so the present will be preserved and the future can be secured.

•Photo shows a scene from MTN Project Fame. Daniels Adeoye cites reality shows such as Project Fame as one of the smart ways multinationals stifle Nigeria’s development. Adeoye can be reached via lanraydaniels@gmail.com

Source News Express

Posted 20/12/2013 7:26:12 PM

 

Share on facebook Yahoo mail icon Gmail icon Share on Google+


 

CLASSIFIED ADS

 

You may also like...
Jonathan, 20 ex-govs, others pocket N29bn severance pay...

Dickson Best Governor in Nigeria, says Secondus

Military repels attack, kills 73 Boko Haram fighters...

52 militants killed in Egypt

Over 1,000 arrested in Gabon post-election violence

No plan to impeach Governor Bello —Kogi PDP...

Oshiomhole becomes APC National Chairman

Zakzaky, wife down with gunshot wounds in detention...

Ministerial ‘Tani o Mu Mi’, by Segun Adeniyi...

How FG fooled labour on strike, N30,000 minimum...

Niger Delta crisis 'may get even worse': The...

Buhari’s administration uncoordinated and rudderless — Jonathan

 

Latest News Toxicity of soccer racism 2023: No Igbo presidency, no Nigeria — South East activists Labour unfolds plans to disgrace debtor-governors Tension in South East as Police, IPOB engage in show of force Bandits kill 22 in fresh Zamfara attack Rivers Tragedy: Father kills four children, sets home ablaze, hangs self Ndigbo must return home during elections — MASSOB Nigerians open one million bank accounts monthly: NIBSS Déjà vu: I fear it will be unto Buhari as it was unto Jonathan in 2015, By Fredrick Nwabufo Heirs Holdings signs $600m facility deal with Afrexim Bank, poised to scale up energy investments Delta First Lady calls for lasting solution to challenges facing education sector Why Atiku was absent at signing of Peace Accord — PDP

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (429,820 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (394,759 views) Shameless Genevieve Nnaji exposes breasts in public (327,661 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (280,980 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (247,796 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (229,235 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (212,068 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (193,279 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (179,550 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (170,409 views) Lagos plane crash: Journalist releases victims’ names (167,207 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (153,671 views)

 

Zenith Zero Balance First Bank chat banking

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (76) Business & Economy (3,874) Business Verdict (54) Columnists (973) Complaints & Requests (95) Enterprise & Opportunities (208) Entertainment (575) Features (679) Global Business Monitor (312) International (2,810) Interview (167) Live Commentary (28) Love Matters (146) Maggie's Blog (69) News (41,366) Opinion (1,150) Pidgin (13) Politics (8,132) Religion (911) Sports (1,817) Stock Watch (35) AMA & Al Jazeera Global Update

 

 

 

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera