CBN Reads Riot Act To Banks Over EIB Loan

By Bamidele Obafemi

Any Commercial Bank operating in Nigeria which is yet to comply with a directive from the Central Bank of Nigeria (CBN) to render account on how it disbursed the loan it received from the European Investment Bank (EIB), stands the risk to be suspended from the foreign exchange market.

This is according to a circular issued to the banks yesterday by the Director of Trade and Exchange of the Apex Bank. The period of grace elapsed by 12 noon today.

The banks according to the CBN are expected to render a stewardship account on the amount of investment done with the credit given to them, stating clearly the date of investment, tenor, name of investment among others.

It is now five years that the European Investment Bank through the Apex Bank of Nigeria had made available the fund to the banks for disbursement to credible projects in the country.

Though ‘thepost’ as at press time could not ascertain the amount of credit given by EIB to the banks, what is certain is that it runs into some millions of dollars.

The European Investment Bank, the long-term lending institution of the European Union, whose shareholders are the 27 European Union member states, has been active across Africa for over 40 years. EIB activities follow policies and objectives set down by European Union member states and whose Finance Ministers are the EIB’s Governors.

EIB loans in Africa concentrate on fostering private sector-led initiatives, including SME and microfinance investments that promote sustainable economic growth and help to reduce poverty. The Bank also supports public sector projects that are critical for private sector development and the creation of a competitive business environment.

It would be recalled that the European Investment Bank (EIB) in 2010 signed the Nigeria Framework Loan which provided up to EUR 240million to three Nigerian banks: First Bank of Nigeria, Guaranty Trust Bank and Stanbic IBTC. The funding was meant to be used to facilitate private and public private partnership infrastructure in the country and ensure continued investment in the sector. The Nigeria Framework Loan represents the largest single investment by the European Investment Bank, the long-term lending institution of the European Union.