THE ECOWAS Bank for Investment and Development (EBID), may soon seal a funding pact with the Bank of Industry (BoI), to enhance project financing in the sub-region.
EBID, the financial arm of Economic Community of West African States (ECOWAS), is an international financial institution established by the 15 member states of the community, to promote development in private and public sectors.
Speaking during a study visit to BoI in Lagos, Operations Director for EBID, who led other members of the African Development Finance Institutions (ADFI), Isaac Olagunju, said the need to understudy the workings of BoI, which has become a success among African DFIs has become imperative.
Olagunju said Nigeria and BoI remained a major market for other DFIs, especially as it relates to poor country products and cross border integration, saying these are critical areas where development banks in Africa can key into.
He noted that beyond project financing, there was also the need for EBID to collaborate with BoI in developing cross border project and SMEs financing alongside staff development training strategies.
“Remember that BoI is the single largest bank for EBID. It is in the light of this that we must liaise with them to get the desired level of funding for project financing, taking into cognizance that that the bank is a success story in itself,” he said.
Indeed, he said BoI, then known as Nigerian Industrial Development Bank (NIDB) was at the forefront of the establishment of ADFI, and as such remained a strong member that has been playing leading advocacy role towards the growth of Africa as a whole.
On why commercial banks are not lending towards infrastructure development and by extension the real sector, the EBID boss said the capital outlay for such is huge while the tenor is longer; ranging between seven to 20 years.
Rather, he said, commercial banks are much more interested in quick returns on investment as against DFIs who can stabilize over time before considering profitability because they have access to long term concessional funds that they use for infrastructure development.
Responding, General Manager, Operations, BoI, Joseph Babatunde thanked the visiting team for considering it worthy to undertake a study tour of BoI, while assuring that the bank would consider the request for a funding pact to boost infrastructure growth in the West Africa.
Babatunde reiterated that BoI was committed to the growth of the industrial sector in Nigeria and by extension the SMEs, hence, its decision to commit about 80 percent of its resources to SME development, adding that it also has a counterpart funding arrangement with some state government to grow the small scale sector.
EBID’s main objective is to contribute towards the economic development of West Africa through the financing of ECOWAS projects and programmes, notable among which are programmes relating to transport, energy, telecommunications, industry, poverty alleviation, the environment and natural resources.