When one of the oldest, largest and most successful financing institution in the country – the Nigerian Industrial Development Bank – was financially and operationally restructured in 2001, it spawned the newly titled Bank of Industry, and with it the dawn of a more promising era for Nigeria’s manufacturing sector.
Thanks to the fresh direction brought by the Bank of Industry
over the last 12 years, the institution – which was originally incorporated in 1964 – has been gradually transformed into a more efficient and profitable organisation.
Not only that, the BOI has also helped resuscitate the country’s previously ailing industry by providing sound financial and business support, and in turn, modernising and diversifying the sector towards the production of more competitive goods on domestic and global markets.
However, as CEO Evelyn Oputu explains, it has not all been plain sailing. Like with the streamlining of any company or organisation, there is a requirement for resourcefulness and inspiration to get things going again.
“After the bank was restructured and I came in, we had limited capital, but we came up with creative ways to ensure that industries that required it were provided with funding,” says Ms Oputu.
“As we did more of that, the government responded to us by giving us specialised funds to intervene in the areas they thought required urgent and immediate attention.”
And as the new management quickly discovered, innovation does not always have to mean unusual ideas, but rather simply enhancing focus on inherent attributes that are already present.
“We said that we wanted to get into small and medium enterprises...we found that Nigerians are very entrepreneurial,” Ms Oputu recalls.
“We were looking at areas where Nigeria has a comparative advantage, and if you look all over the states, there are different terrains and raw materials available. So from 2006 we said we were going to do SMEs that utilise raw materials because you create jobs very quickly in this way. This would also substitute the small things that we import so we would make savings on foreign currency and maintain jobs. And we succeeded.”
As soon as this strategy was realised, the BOI also took on the mantle of training-up those traditional traders with few entrepreneurial skills or limited knowledge in the art of business, helping to create a more knowledgeable and adept workforce.
With the cooperation of state governors, it was then the BOI decided to start clustering SMEs into cooperatives and industrial parks towards addressing the infrastructural inadequacies that were hampering productivity, putting more of a cohesive and efficient system in place.
“We decided to go further and look at the value chain, looking at the big firms and encouraging them to work with the SMEs.”
However, with the larger companies claiming they couldn’t source raw materials from Nigeria because of their notoriously poor quality, the BOI simply inquired what technology was needed to produce better quality supplies, then financed the SMEs to buy them.
“We made funding available to the SMEs to purchase these machines and it worked to fill voids in the Nigerian manufacturing supply chain and keep value added and jobs at home. That is what we have done at the Bank of Industry.”
And it is a system that has truly worked. Not just in reinvigorating the manufacturing sector and reducing poverty in line with the country’s development goals, but also helping the bank itself to turnover a profit. From making just £423,000 before tax in 2005, the BOI group was able to grow earnings by more than 1,000 per cent to £4.4 million in 2011.
Having also ramped up investment into the sector by 262 per cent in the same period, Ms Oputu is now hoping new investors will be further attracted to Nigeria’s more robust industry.
“We are looking for partners for SMEs to allow them to scale up and add capacity. I can assure you there are many companies here who are making huge returns on investment. You cannot make those margins anywhere else in the world, I can guarantee you.”