Banks Participation in Industrial Development of Nigeria


Industrialization means the development of manufacturing industries applying  science and technology in order to provide work for the growing population and to raise the  standard of living b increasing per capita income and to improve balance of payment position, according to Alma B. mount joy in his book, industrialization  and development of countries.

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Industrialization I n also aimed at input restrictions and increasing export. Developing countries are characterized  by a high degree of substance production with very limited application  of technology as a result of  which manufacturing industry is relatively low and agricultural industry is paramount. Industrialization should apply or extend to all sectors of the economy so as to raise the worker’s productivity and for the development and full utilization of both human and material resources. In other words, all the sectors of the economy should be advancing.

It should be know that there is a no ceiling to the degree of possible industrial development but once the resources in a given economy are still under utilized, no matter the degree of industrial development; it still has the need to develop more which should involve the existence of financial institutions such as  banks which are at any given time supposed to participate fully in the  exercise by way of granting loan and advance; whether a country is  industrialized or not, depend on the existing level of  wealth and material welfare.

The fastest possible means of industrialization is the only sensible target for any government considering various ways in which industrialization can  be  achieved as fast as possible. We need to make several assumptions about the political / natural conditions to which industrialization process  take place, since there are many different methods fast industrialization as many different political system, socialist and capitalist system of government.

In  socialist economy, it is the state that owns the industrial means of production which is also controlled by the state but in case of capitalist economy individual have the right to own industries taking into consideration the returns they are able to make in any given period. There are also the mixed economy and communism, so in some developed countries they practice it.

Industrialist aim more at making abnormal project than seeing to helping the whole country  to become highly industrialized and developed. This particular behavior of the industrialist tells seriously on the assistance given  by the financial bodies. As time goes on in any of the subsequent chapters, we will come to examine how this behaviors affect the execution of industrialization with particular referace to our country Nigeria.

In the course of a nation’s  socio –political evaporated, economic self – reliance should be an industrial development of that nation. The primary aim of any government  as to maintain peace and stability to  provide for basic essential infrastructures in order to enhance the performance  establishment and maintenance of the nation second economy. It is also expected to promote other activities that may improve the general living standard and welfare of the whole populace. To be able to achieve these lofty objectives as well as sustain a bought economy in developing  nation such as Nigeria requires a stable and radical but ell planned industrial revolution.

Finally and in defining industrialization or industrial revolution an attempt is made to do that  within  the context  of a developing country such as Nigeria and it is defined to be a massive recommendation  of all available resource both human and  material toward developing the industrial technology that is suitable for local environment  in an endeavor to make the country economically elf relient in such areas as manufacturing serving  commercial and agronomic sectors.

Also Read: Banks Participation In Industrial Development In Nigeria The Need For Industrialization


In  the proceeding topic we had discussed so much about industrialization and in order to achieve those mentioned  objective eveen government at various levels must be involved in the process both financial and otherwise to see to the execution of the  projects. Funds must principally be made available for it and this is where the financial institution play a very important role in that they have to provider  these needed funds in terms off loans  and  advances.

Aid is equivalent to gift grant ad assistance so any thing that is provided and that can help in or contribute to the execution or establishment of any project can be looked at as aid. Here we have to view as it relates to industrialization and discuss these things that constitute the aid to industrialization.

Things required for success in any venture in life are time interest financial manpower and known how. Behind  any successful business there must be out any project it is the interest that around an individual to develop a plan for any thing finance  is money or wealth set aside and must be available for creating more wealth.

It is the care of the most essential or all other factor and finally manpower both skilled and  unskilled must be there for implementation execution of the project and be there for coordination of the other factor of production.

Because of the title of the topic “banks may play  a very  important  role  towards industrialization in any  economy they do this by providing finds or more appropriately  giving credit facilities to one of thee industrialist  who  carryout  industrial project, the monetary  capital for a project. Finance I one of the major contribution factors for industrialization   egression in Nigeria. The banks loans and even the government industrial development  bank loan are very difficult to attain.

A  lot of obstacles including  the usual 10% kick back  to the bank  officials always make the loan almost an impossible venture. The high lending rate I also finstrating instating. Eventually, prospective investor may resolve to borrow privately with excessive interest rate that may consequently  render the business insolvent. In some cases the investors may seek oversea financial  partners.  The result of this always expirate involving   foreign  exchange spending. This is again detrimental to  natural economic growth and industry development. It is the financial institution banks more especially that are supposed to give finance. For  industrialization. They should be doing that in form of  loan and advance. Finance is looked upon by  industrialist as the other factors would readily be made available but to provide it is a difficult task.

Since banks like the industrial  agricultural development mortgage  bank are established by federal government to give credit facilities  order to aid industrialization financially  because it was observed  that commercial banks do not do that effectively and adequately. They are only interested in giving short term loan and only interested in giving short term  loan and in little amount by learning industrial development ragging so the roles of the banks are highly indispensable and they should participate fully by providing the needed finance aid to industrialization. stages of industrial development in Nigeria.

Nigeria engaged in economic activities on subsistence  basis and s the stages of industrial development in Nigeria today is still at its lower level.

The development modern business and governments saving efforts towards promoting industrialization in the country started only about three decades ago.

Before the few industries existed as primitive rural industries for instance, agriculture  wearing, blacks milting etc. there are only  primary industries. Nigeria is still developing utilization of its resources.

For any country to attain remarkable level of industrialization, it must overcome series of obstacles and difficulties.

About 29 years ago it had its development plan disrupted civil war. now it is being confronted with other problems like sudden change of government from civilian government to military resulting from corruption and self-aggrandizement of the politicians with many tribal groups, problems of transportation communication dishonest, manpower development and power supply, lack of adequate fund is worst. Ever when funds are provided a little, these industrialization do not judiciously apply theme for what they are meant. However, oil boom in 197o has really changed the place and direction of industrial project.

Although the Nigeria organization of enterprises and the 197 indentation decrees was enacted by the federal government the country has not yet  adequately infrastructure for subxtanial industrial  development. The decree was made  to direct financial  institution  through the C.B.N credit guideline to  extend certain percentage  of the total loans and  to  indigenous business with Nigeria equity participation of not less than 50% to promote industrialization.

since then the only significant advancer made in Nigeria industrialization are:

  • The establishment of steel manufacturing complexes at ajeokuta Katsina etc.
  • The petro chemical industries the vehicle assembly based industries and brewing industries

All the project are outside the knowledge and skill of local contractors and engineers. Export planners and technologists are  from advanced countries. Since there have not been giant manufacturing industries such as those that are  manufacturing  industries such as those that are manufacturing  heavy machine electrical / electronic equipment’s, component  parts  now even computer technology. The  stage of Nigeria development in industrialization is still at its lowest  and  there  is no sign yet of making any lead way  into  the main business, instead she  heavily on expatriate to perform most  operation in our industries. This set back could.  Attributed to the attitude of banks towards giving credit facilities in their ways of using the funds when granting loan and advances.,



Normally you have to find small scale medium size and large business enterprise existing in any economy   but  it depends in which is in greater number  than  the other., in Nigeria for instance the small scale enterprises are in much greater  number than the other two and that is why Nigeria is said be developing still. These  business are also being  carried out on subsistence basic only.

Small – scale enterprise exist where one starts  and  run on enterprise  on a modest level and process little output because he employ little  amount of factor s of production particularly  capital.

Conversely large scale production is where  either small scale organization may like to increase its operation large amount of factor of production  more especially capital. Establishment of numerous large scale industries indicates industrialization.

Since existence of large firms survive in Nigeria introduction of large amount of capital  which is usually difficult to generate  by Nigeria industrialists, hance the small factories survive. The small firms also serve as subsidiary to the parent companies and could help in producing semi finished goods to be used by large firms as inputs.


  • Primary industry

Because of lack of capital stock in Nigeria primary industries  absorbs the greatest percentage of Nigeria  population as a means of  live hood and that is one  of the major reason why standard of living here is very  low. In effect the wealth of the country is controlled by very few industries resulting in low industrialization generally.

Primary industries are mainly categorized by culture  or farming which provide for food processing  and agro – based  industry. Mining  which  has became increasing  important  in recent  years has become  increasing  important  in recent  years  has  made it  possible  for  many  mineral to be obtained according to the type of rocks in which  they are formed. These mineral  provide raw mineral for the manufacturing industries available of may  mineral in a country  help to enrich such  country and also  inspires industrialization in such country.

Forestry helps in the production of timber. It is a very vital for the furniture and contraction companies. There is also finsherly which may come under farming agriculture.


Goods produced in this type of industry are not consumed directly. They are mainly semi finished goods. Used as  input  for the production of finished goods. Marketing industry implies the application of science  and technology with manpower development  in order to provided employment  for the people and riser their  standard of living.

Unfortunately it is  the class or sector of the economy that Nigeria is most lacking which could be attributed largely to the lack of adequate provision  and management of capital and partially low manpower development.

There are very few manufacturing industries in Nigeria and they are mainly  crop  processing factories  breweries refinery  vehicle  assembly plant steel companies  and  the hydro electritric power (HEP) which sparsely scattered  have  and there. There are not enough of them to serve about 50% of the   to classify the  industries  in the  preceding  paragraphs  and  have  seen  that  Nigeria  still has  much  to in the process of  industrialization  as from now on. One will have to find out how banks help in establishment  of  these  industries  and more  especially  in the manufacturing scale because  it is the  sector  that determine  the level of health development and advancement  of any country and also  the standard  of living per capital income of the citizens.


This could be broken down into three types viz  manufacturing constructor  and direct services the degree of existence of tertiary industries in any economy determine its level of industrialization  in any  country  where tertiary industry I greatly abolished and developed it is deemed to be  highly industrialized.




Financial development institute are often established in developing countries to assistance to  indegegenous insurable companies which are faced with problem or raising internal  capital  o start off  their  business.

The ultimate goal  of these  financial  institution  is to act as a leverage  to rapid industrialization  development. However it is  augured that these financial  institution  have failed in performing these function adequately and effectively.  May be in  subsequent topics  we will come to see why  these  banks  do not  play their roles toward industrialization as they are supposed to be doing. In  Nigeria  they have contributed  to the existing structural  imbalance  by neglecting the most important sector of the economy the small scale indigenous enterprising  that  have been  the most prominent  contribution to employment  generation.

The aim of this research project generally and this topic in particular is to trace the extent  to  which Nigeria evolvement and commercial banks  have participated  in industrialization process through proven  of financial and to  indigenous industrial.



There are so many development bank established in Nigeria with the primary objective of developing our industry by  way of providing finance in form of loans and advance. The  banks are

  1. The small scale industries credit scheme (SSICS)
  2. Nigeria industrial and development  banks (NIDB)
  • Nigeria bank for commerce and industry (NBCI)
  1. Nigeria agriculture bank (NAB)
  2. Federal mortgagee bank of Nigeria (FMBN)
  3. Bank of credit and commerce (Bcc)

In view of the above the main business of a  development banks is to raise and disburse finance for  the  indigenous industries and to develop other  managerial and technical  inputs. Finance should be regarded not  only soley as a resource are expressed and  this  is  where the dilemma of any  development bank has. Although the developments bank are established to  provided funds for the indigenous  industrial  they are  also  aimed    at making  some profit  out of it  by charging  interest on loans and advances granted to theses industrialist  now we are going  to see how  these individual development banks  perform in the exercise.

  1. The small sale industries credit scheme (SSIC), was set up specially for the promotion of specials financial  assistance to small scale  The federal government argued that smaller firms have some problems in all countries and the most fundamental lack of adequate capital and credit facilities for sustaining their take off and growth.

The credit guideline give SSCIS is the grant of start off loan to small firms engaged in manufacturing processing or service activities with a capital investment not exceeding N450, 000 in machinery and equipment. The loan is given for the development of new small enterprises of the mechanized type of manufacture, relatively sophisticated consumer goods and simpler producing goods but does not grant loans for creation and/or expansion of the work place or premises.

SSICS consideration for granting of loans are:

  • Technical / managerial ability of the applicant
  • Credit worthiness of the applicant and
  • Feasibility and commercial viability of the venture

SSICS loan term is 5-7 years when it ix expected that the modern  financial system when it will be able  to obtained  fund for expansion from commercial banks and specialist development banks.


  1. It take ssics just like any other bank) a long time to approve loan to entrepreneur whose plans must have changed eg inflation increase in price of equipment commodity.
  2. Non provision of financial information and document required from the entrepreneurs on time  when results in long term process.
  3. Loan repayment being one year after disbursement of the first installment not minding if the entrepreneur has brought production facilitates from abroad or if it takes him more than a year to do so which poses a problem and  difficulty to firm, hence the repayment of these loans become difficult  and almost impossible resulting in SSICS winting  of loans
  4. In light of the above the SSICS is yet to make  its impact fact  in generating new industries since most start ups have  either been financed by trade credit family contribution personal sassing etc.


The Nigeria industrial banks was established in 1964 to promote medium to large scale  manufacturing  industries. It does this  by providing finance to medium and large scale enterprises in Nigeria  which are privately owned and managed  for   operation only in the industrial and mining sector  of the economy s well as hotel and tourism and for enterprises which will make a significant contribution to be economic growth of Nigeria .

It also assist client to obtain necessary advice in carrying out feasibility studies and financial planning which precedes actual investment. Before projects can be financial by NIDB, they must show promise by raising living standard providing employment or conserving foreign exchange. Because of this NIDB concentration mining, hotel and tourism as well as manufacturing especially increase of food and beverages. (Element of banking by john Orjih page 73


The Nigeria bank for commerce industry  was established  by  the  federal. Government  of Nigeria  in  1973  mainly  for  facilitating  the  purchase  of foreign business affected by  indegenisation exercise  i.e  The  Nigeria  enterprise  promotion  acts of 1972 and 1971. The  primary  objective  of the NBCI  consists of primary  capital for medium and long term investment to  indigenous industrialist engaged in the  field of commerce and industry.

It should  be known that all development banks  in Nigeria  are under direct  control of the central Bank  of Nigeria (CBN). Elements of banking John Orjih page 76


This  was established to provide medium and long term capital mainly for  building houses. The term is up to 10-15 years and interest is highly low to encourage  people  whose  interest is developing estates. Element of banking  by John Orjih P. 83)


The merchant banks deal with financing of  imports and  exports through letters  of credit. They  also deal  into the issue of capitals.

Development banks restricts financing to certain  predetermined  sector  of the economy and so  it should be  correct for one  to say that  development banks have  consistently discriminated against some  sectors which  could be said that trend  of discrimination was on commercial basis . In effect the development banks are yet to  make  any  meaningful  impact  on  indigenous  Nigeria  industries. (Element  of banking  P. 65).

Information  and data have it that  the money market (market  for short  term funds)  is self financing through earning retention as the main source of funds to  nigeria  enterprise (Element of banking by John Orjih P.65-66)


Copulating the development banks are  the major  operation in the Nigeria financial system. The commercial banks  whose activities have recently  come under the control  of  the government  meaningful  impact  on Nigeria  industry. The  commercial  banks are said  to discriminate against Nigeria  companies and  also conservation  in their  lending policies.

They  have deliberately  attempted to be avoiding participation in the  development process by  financing industries  especially the manufacturing industry. This is as a result  of fact that  they normally lend on short term basis  out normally  longer than one year. The loans are however  repayable on demand at short time notice

The commercial banks aim mainly at making large  profit and within a short  time and that is why they do not normally lend to individual who embark on  long  term venture like in they borrow a short term from their credit customers and so they have to lend on short term. The amount to medium and long term venture is in small percentage. They favour that sector of the economy where returns are made under one year to enable the individuals to repay the in loans.

Furthermore, these market  measures is interest rate structure which is often used by commercial banks to discriminate between companies of various grades risks such that the more risky, the more higher interest rate. Nigeria  rate has remained gereally low when compare with other industrial countries like U.K and USA.  The low interest rate is change by development bank. They made it difficult for them to operate in the capital market because of their lending rates. They are considerable below market rates. The low lending rate of these banks arose because they obtain chap money from the federal government to subsidize their lending activities..

When interest rate are kept artificially low both mobilization allocation of saving are hindered and credit has to be rational. In this process, the smaller indegeous enterprise generally gets pushed t\o the end of the gene and their opportunities for growth are this constrained.

Furthermore, the lower interest rate have tended to attack safe and easy short term business to the local commercial banks who are often eager to accept them. Rather than get in valued in more risky medium and longer term financing

Below is a table showing the existing interest rate structure according to the 2004 “policy guide line

2003 2004 2005
1.  Rediscount rate 9% 13% 17%
2.  Treasury bills rate 28% 15% 20%
3.  Minimum banking lending rate 55% 40% 35%
4. maximum banking lending rate 70% 60% 50%
5. NIDB lending rates 9% 17% 13%
6. NBCI lending rates 80% 75% 70%
7.  FMBN lending rate 80% 65% 50%
8. FMBN deposit rates 50% 45% 50%
9. Minimum banks deposit 70% 80% 65%
10. maximum banks deposit 20% 40% 50%


Sources (1) The billion in document central bank of Nigeria

  • CBN Annual report and statement of account
  • Federal government of Nigeria economic stabilization account.


In 2005 credit guideline to commercial banks are as follow s.

Th CBN directed that insurance loans for residential building conterminal should b for minimum of 15 years and interest rate for commercial banks should be.

Agricultural production 9%
Residential house 91/%2
Production housing agriculture 13%
General commerce 13%
Special institution 13%


It also direct that not les than 16% of banks total loans and Nigeria shall wholly own advances in  2004 small scale enterprise are returned as those with  annual  lower loans not excluding  # 500,000,000. Merchant banks are also  directed  that 80% of  their loans and  advances shall be of maximum of  and by short  term. The central  bank of Nigeria  (CBN) has stipulated credit  guideline policy  for Nigeria  banks each commercial and merchant banks loan  and advances for  section A and B for 2005 fiscal  year  should  not rise by more than 100% and  outstanding  amount  as at  December 31  2004  and small banks with  loans  and advances not exceeding N 100 million as at  December 2004, not to exceed 70%  of the out standing or first  of the total  depost liabilities adopted for purchase of shoes buying motor cars  by rural  facilities

Percentage Allocation
Commercial Merchant
A prwrity sector 75 75
1. Agriculture science (18) (13)
ii. Manufacturing (42) (12)
Iii Exports (10) (12)
iv. Sold mineral (5) (5)
B. Other  sector 25 25
Total (A) +(B) 100 100


Manufacturing and service sector have both dropped and agriculture has risen.

A. Preferred sector Commercial Merchant
i. Agriculture, forestry & fishery 12. 00
ii. Industrial enterprise 44.00
iii. manufacturing  including  agora based industry 9.00
iv. Residential  building  construction 11.00
v. Export 2.00
Vi servical public utilities transit commication) 11.00
Total 75.00 79.00


Note  for A it is regarded as  minimum Mac. For B,. is regarded  as maximal., bank may have the target for the first  five sector with the over all ceilings


Before we live into the topic let us examine the commercial banks  actual  lending to small scale industrial  ordering to CBNs annual report for the years 2003 –2005 and they are:

# 185 million 206.7 million and 35.7.3 million respectively composed to the commercial banks aggregate loans  an advances of N 8.6 billion , N 10.8 billions and 11.1 billion for the three years receptively. We can see from the above percentage of leaning to mall scale industries by those banks are very low to boost industrialization.


MANY SMASLL SCALE  INDUSTRIALIST APPROACH THE BANKER WITH A CONCERNED PROJECT WHICH ARE OFTEN RIDICULOUSLY VALUED AND BANKINMG  HAVING  A DUTY TO PROTECT DEPOSITOR FUND AND ENUR THAT THEY ARE wasted in well digested  reliable project in order to guarantee the repayment of the loans  and interest  which will require on degree of confidence in the project to be domesticated by The inventor. it has to take ome time. most  proprietors do not  possess the necessary  financial expertise to put together  bankable propositions for example they have no ides about cash  flow projections balance sheet and other to interpreted  or understand their financial potions.

Small scale entrepreneur usually express desire to order to gurcomply with in condition stipulated banks in order to obtain the loans that once thy are obtained most entrepreneur find other uses for it avoiding banks and resisting  any investigation into their activities and the banks interest. In the funds are jeopardized into  their activities  and the banks interest. If the funds are jeopardized when the clients fail to repay resulting in huge accommodation of bad debts.

Small scale enterprise are sometimes vulnerable to market of fluctuation as a result of lack of contract and co-ordination with smaller firms in the same industry. Banks have it as a duty to guide against the risks involved in given out loan for borrowing and order to achieve this and to see that industrialist actually invest and manage the funds provided to him in the also strictly and make it a bit difficult for  any borrower to fit  funds Appling principle of good lending to know if they will be able to counteract the problems they encounter to providing facilities in the name of giving aids to industries and this result in these borrower meting  with problem each  time  they need fund to embark on industrial project.

There are also defects on the side of bank of facials in aiding industrialization and these contribute to impediment in industrial development. One of the identified problem of credit facilities for industrialists its short term nature, which will not enable the borrower have enough time to recoup the funds invested by machines and equipment as to repay the loan as schedule balance. It will take him time to realize such big amount from his return or output and repay risky nature and so commercial banks are not normally interested in granting long term loans on agriculture.

So due to the fact that industrialists are dishonest in their declaration to banks when applying for advances, the diversion of funds to unnecessary projects are defects  on the aide of financial institutions generally and banks in particular. These banks are consequently failing to give the maximum financial aids which they are supposed to have been doing and which has  subsequently rested in table below.

Table iii

Sector Percentage Allocation
Commercial banks Merchant bank
A. Priority sector 75 75
(i) Agricultural sector (18) (13)
(ii) Manufacturing (42) 45
(iii) Eports (10) (12)
(iv) Solid minerals (5) (5)
(B) other sector 25 25
Total (A) +(B) 100 100



In view of the continued need to accelerate the pace of rural development the stipulated ration of banks lending to total deposit mobilized in rural comminutes shall in 2005 remain at the minimum 50 percent .


It order to sustain the development of small  scale enterprise wholly owned by Nigeria the share of commercial and merchant banks is totally credit outstanding allocated to such enterprises include.

  1. Banks are to regard allocation targets in A as minimum and that of B as maximum. Cattage industries shall in 2005, remain at a minimum of 72%. This category relates to general commerce. The relation of this access to such enterprise that could and do contribute imported resilience to the economy. In this regard total cost exclusions cost of land but including working capital does not exceed N 10 million.


The grace period on agricultural loans were streamlined in 2004 to reflect the difference in gestation periods within the category of agricultural project. The same grace period shall apply in 2005 as follows

  • Crops:
  • 2×28 months for seasonal staple and cash crops eg cotton groundnut and cassava. The same grace period shall apply to loans fo the construction of on farm storage structures requiring mall capital outlay and short period of construction.
  • 5-7 years for crops including palm oil, cocoa, citrus, cola nut and other trees and fruit plants. In particular, the grace period for rubber shall not be les than 7 years.
  • 6 months for broilers (poultry )
  • 24 months for layer (poultry)
  • 24 months for swing breeding
  • 12 months for ssine production
  • 24-30 months for sheep and goat breeding
  • 6 month for sheep goat and cattle fathering
  • 12 months for rabilitry
  • 7 years for cattle ranching and dairy production.
  • 12-8 month agriculture


  • 8-10 years for shortlong fibre puip wood production and saw timber production.
  • 8 years for full wood firewood production
  • 1-2 wild life domestication
  • 1-2 years for wild honey production.

Without prejudice to the grace period specified above, for loans in respect of large scale seasonal crops. Fish and poultry farming with  extensive capital outlay the grace period shall be five years. Furthermore, for  all loans, a borrower may choose to start repayment before the stipulated grace period expires.


Finance companies, insurance companies, development banks and bureau de change operating in the country are reminded that it is mandatory for them to render to the central bank of Nigeria, regular accurate  and timely returns on their  operations and any other information as may from time to time be required by the bank in accordance with the provision of CBN decree no 24, 1999 and it’s a men banks and other financial institution decree no 25, 1999 and other existing operating guidelines. Specific gantlines that apply to these companies.

Ins 2005, effort shill be intensified to monitor the performance of licensed finance companies with a total checking, further spread of distress in the financial sector as well as ensure the over all effective of the central banks monetary and financial policies. Accordingly all  licensed companies in the country shall continue to submit to the central banks quarterly returns on. The loan and regulations governing their operations. In particular banks are to ensure compliance with the guidance note on money laundering surveillance with the guidance note money laundering. Surveillance recently issued  by the provision of the money laundering decree.


Banks and other financial institution are required to give full co-operation to law enforcement authority within the limits of rules governing confidentiality.  In particular where finance  are aware of facts lodged in an account or transaction being entered into device  from  criminal activity or intention  they  should  observe  the stipulated procedures for disclosure of suspicious transactions in reporting to the law enforcement authorities. Any contravention of the above guidelines by any financial institution would attract peicities as stiputed in the banks and other financial institution Decree (BOFID) 1999 are the money laundering decree.


The 2004 policy of should deregulation shall continued in 2005. Consistent with that policy some new initiative have been introduced while most of the existing policy measured are retained.


Over the years foreign exchange inflow in the non oil exports sector had continued to remain unimpressive. Therefor, in response to all of the private sector to eliminate undue bureaucracy in the administration of expert incentive by multogeicy

involvement in  the implementation process and to spur more participation  in the scheme thereby generating more foreign exchange earnings government has decided with effect from 2005 fiscal year to entrust the administration and disbursement of export incentive to Nigeria Export promotion council (NEPC)

  • With the deregulation of the exchange rate and the consequent removal of subsidiary in its determination since. Government agencies and parastatals lease to impose fees and  tariffs in foreign exchange for services radered locally.

Consequently, payments in foreign exchange of hotel bills by for foreign visitors, airport tax, fees for the veiewal of residence permit  and allied charges,  international ticket fares etc. shall be  optional and not  monetary. Such  payment can be made in the level currency.

  1. With effect from January 2005, imputers shall be responsible for the payment of the service charge for the comprehensive import supervision scheme (CISS) at rates to be determined and advised the federal ministry of finance.
  • All export oil and non-oil from Nigeria shall be subject to reshipment inspection by government appointed inspection agents.



Insurance companies and development banks shall continue to render to the CBN on quarterly basis, accurately and a timely manner their balance sheet statement  as well as returns on their credit  operation and interest rates on the prescribed forms. Also they are to furnish other supplementary  information from time to time  be required by the central banks of Nigeria. Such quarterly returns shall be submitted not latter than 28 days after the end of each quarter to the Directors of research central bank of Nigeria Lagos.

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