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THE CONTRIBUTION OF BANK OF INDUSTRY TO INDUSTRIAL DEVELOPMENT IN NIGERIA 1980-2010

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CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Industrial financing organizations have undergone a structural transformation
during the last three decades in most developing countries. In this process of
transformation, industrial development banks have emerged as catalytic agent of
industrial and economic growth. This work is aimed at examining the contribution
of the Bank of Industry (BOI) to the industrial development of Nigeria.
Industrialization is regarded by the government as a sine qua non for National
effort to achieve the degree of self reliance and confidence which are required to
maintain the stability necessary for social place at home and equally master the
respectability which serves as an essential ingredient for meaningful involvement
in international affairs and interactions.
The Bank of industry (BOI) was thus created to vigorously pursue this aspiration
of the government. In fact with the increasing activities of (BOI) and Nigerians
position among other African Countries especially those of the Economic
Community of West African States (ECOWAS) and a great opportunity to develop
the export sector. The United Nations strongly expressed the views that for

development to take place, Net investment in the country should be increased from
50 percent to at least 10 percent, it could then be argued that control facet of
economic development is rapid capital accumulation including knowledge and
skill.
Orthodox writers like Lewis and Rostow (1998) have proposed that
industrialization is the engine which projects the development process of an
economy.
This proposition was derived from a general station of the historical experience of
the present day developed countries whose development took the form of an
industrial revolution several arguments could be advanced in favor of
industrialization. It is more likely to bring a change in attitudes, technical progress
and structural transformation which development was assured to entail.
The level of productivity associated with any other sector. The result of the
investigation provides alternative employment for the labour force and this would
relieve pressure on the land. Most important of all is the linkage effects.
It has the highest capacity of linkage with other sectors of the economy.
The encouragement of indigenes as well as foreign enterprises would, among other
things, enhance the economic development of Nigeria.

The appropriate institution that could carry out the function effectively is BOI. If
BOI increases and effectively channels its finance activities management and
technical assistance to investors in the industrial sectors, it will undoubtedly
facilitate growth and development in the economy. BOI, as an industrial
development finances institution, finances activities which include textiles, metal
products non metallic minerals products and also hotels of international standards.
It provides medium and long term financial assistance only to limited liability
companies registered in Nigeria and complying with the enterprises, promotion of
1972 and sometime makes equity investments. The numerous problems that plague
the industrial sector like low level of technology, low level of investment,
infrastructural administrative and structural frame work have hindered this sector
from contributing substantially to economic development. To surmount this
problem will require not only finance institutions like commercial banks, but more
essentially degree of economic power by the choice of Projects or assets on which
it places it funds that are generated from both local and foreign services. NIDB has
existed for over thirty years, yet its impact has not been immediately felt
(Hirschman 1977).

Consequently, some questions reality come to mind as regards to performance of
BOI via-visa development in the industrial sector in particular and in the economy
as a whole.
In most of the developing countries like Nigeria, industrial financing organizations
have undergone a structural transformation during the last four decades.
In this process of transformation industrial development bank have emerged as a
catalytic agent of industrial and economic growth.
Development banks are crucial in the economic development process of a country.
In Nigeria the development of financial institutions for development purposes
could be traced to 1946 when the ten years development plan was launched by
Britain. The first to emerge in the scene was the Nigerian Local Development
Board (NLDB), which made loans and grants to native authorities, corporative
societies and other related bodies were established and recognized. At the definite
of the board, the northern, Eastern and western Regional development boards and
Colony Development Board (CDB) were setup thus, financial assistance to
industrial and agricultural projects. However, they had limited resources at their
disposal though their impacts were not widely felt.

In 1956, the western region finance corporation (WRFC), the federal loans Board
(FLB), the Northern Nigeria Development Corporation (NNDC) and the Eastern
Nigeria Development Corporation (ENDC) were established to promote industrial
development in the country. The first official development bank was NLDB (1946-
1949). The second development finance institution was CDB (1949-1956). It was
established with N100,000 grants from the regular government budget plus the
colony share of the asset of NLDB which has been shared among the regional
components in the country. It was charged with the dual role of facilitating both
government and private economic activities. FLB was the third development
finance institution, it was established in 1956 with one an initial grant of
N600,000, with the following functions:

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