Senate C’ttee chair declares $1.3bn DBN illegal

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…No, it’ll develop SMEs –Adeosun

From Adewale Sanyaolu, Abuja

The Senate yesterday, gave a shocking revelation that there was no law setting up the Development Bank of Nigeria (DBN), with a capitalisation of about $1.3 billion
Chairman Senate Committee on Petroleum Resources (Upstream), Senator Omotayo Alasodadura, gave the indication during a panel discussion with the topic ‘‘How will New Legislation and Policy Develop the Oil and Gas Industry’’ at the ongoing Nigerian Oil and Gas (NOG) 2017 conference in Abuja.
Alasoadura, had while responding to the plans of the Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB),Mr.Simbi Wabote, to have a unit of NDB established in Yenagoa, Bayelsa State to cater for the funding needs of indigenous oil companies, quickly interjected, that there was no such thing as DBN.
‘‘Let me inform you NCDMB and other stakeholders in the oil and gas industry, that as we speak today, there is nothing like DBN. There is no law setting it up. We have not got such bill sent to us to consider the establishment of such a bank. Wabote had while addressing the concerns of oil and gas stakeholders on funding constraints alluded to the fact that there were initial plans to have a Local Content Bank established but considering how long it might take to get that done, the Board decided to have a unit of DBN to provide indigenous oil and gas operators with funding at 8 percent over a five year period.
‘‘Funding is a major constraint faced by most indigenous operators who mostly get loans at double digits from commercial banks, which makes it difficult to compete with IOCs that have access to cheap funds and also get support from their home country.
But while speaking at a retreat for the board and management of DBN in Abuja, Monday, Minister of Finance, Mrs. Kemi Adeosun,  stated that the Development Bank of Nigeria (DBN), was being positioned to galvanise the Small and Medium Scale Enterprises sector for the overall development of the nation’s economy.
The Minister also assured the board that the Federal Government was ready to provide support for the new development financial institution.
The DBN had convened its development partners and incoming management team and Board of Directors for an inaugural strategy retreat in order to ready itself for immediate operation upon the issuance of its license by the Central Bank of Nigeria (CBN).
According to her, the operating licence for DBN is expected soon so that through its activities, some of the problems currently discouraging the growth of the SMEs sector would be effectively tackled.
Adeosun stated that DBN would lend to microfinance banks, which will in turn develop specific products in specific markets at lower interest rates than currently available to SMEs, adding that the Finance Ministry was in discussion with the CBN on the need to use the wholesale banking platform as a vehicle for any of its subsequent SMEs intervention.

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