1.1 Introduction
With the drive to hopefully end extreme poverty and hunger globally by 2015, 189 countries of the world and world’s leading development institutions came together at the Millennium Summit in September 2000 to agree to a blue-print that was purposed to meet the needs of the world’s poorest. This blue-print is made of eight aggressive goals known as the United Nations Millennium Development Goals which were developed out of the eight chapters of the United Nations Declaration adopted by 189 Heads of States and Governments from all over the world.
For its financial intermediation roles, a banking system is known to be critical for the development of a nation and for the prosperity and sound health of the economy and the populace. If banking fosters the development of a nation, it is therefore appropriate to see how the banking system can support in the achievement of those development goals agreed upon by the world leaders.
This paper will examine the possible ways through which the component parts of the Nigerian banking system can contribute to the achievement of the eighteen-target development goals between now and 2015 in a developing nation of Nigeria.
2.1 The United Nations Millennium Development Goals
The United Nations Declaration that was adopted by the world leaders at the Millennium Summit of September 2000 eventually produced the United Nations Millennium Development Goals (MDGs) which is made up of eight goals of eighteen targets. These are expected efforts meant to meet the needs of the poorests of the world and put an end to extreme poverty worldwide. The United Nations Millennium Development Goals (MDGs) which are expected to be attained by 2015 are:
- Eradication of extreme poverty and hunger;
- Achievement of universal primary education;
- Promotion of gender equality and women empowerment;
- Reduction of child mortality
- Improvement of maternal health;
- Combating HIV/AIDS, malaria and other diseases;
- Ensuring environmental sustainability;
- Development of a global partnership for development.
Each of these goals has attainable targets to be met in order to achieve the goals.
3.1 An Overview of the Nigerian Banking System
According to the Annual Reports and Statement of Accounts of the Central Bank of Nigeria for the year ended 31st December 2007, the constituent members of the Nigeria banking system are the Central Bank of Nigeria and the 24 deposit money banks. We can see this as a narrow description of the Nigerian banking system. For many purposes, a wider description would encompass development banks, microfinance banks and the primary mortgage institutions in Nigeria.
Like other banking systems around the world, the core activity of banks within the banking system is the intermediation of funds which entails the mobilisation of funds from surplus units of the economy and channeling the mobilised funds to the deficit units of the economy. Ekezie (1997) referred to Kent who simply describes the role of banks as that of accumulation of the temporary idle money of the general public for the purpose of advancing to others for expenditure.
The Central Bank of Nigeria (CBN) as the apex institution carries out supervisory and regulatory functions over other member of the Nigerian banking system. The CBN formulates the monetary policy, issues the Nigerian currency, serves as banker to government and other banks within the banking system, and performs other various developmental functions.
The 24 deposit money banks, which are members of the CBN’s clearing houses, practice universal banking, a multi-purpose form of banking which combines commercial and merchant banking and insurance, among others. Within the Nigerian banking system, there are development finance institutions. These institutions are development-oriented banks which according to Ezekie (1997) are meant to stimulate the priority sectors of the economy and promote and finance enterprises through the provision of medium and long term capital for developmental purposes. Specifically, they are to provide medium and long term finance to the industrial and agricultural sectors of the economy. The development financial institutions in Nigeria are the Bank of Industries (BOI), the Nigerian Agricultural, Cooperative and Rural Development Bank (NARCDB), the Federal Mortgage Bank of Nigeria (FMBN), the Urban Development Bank (UDB) and the Nigerian Exports and Imports Bank (NEXIM).
Microfinance banking recently replaced community banking to service the poor and the low income earners at the grassroots while primary mortgage institutions are to provide finance towards facilitating housing delivery and create mortgage assets in Nigeria.
4.1 The Nigerian Banking System in the Achievement of the United Nations Millennium Development Goals (MDGs)
Given the brief description of the MDGs and that of the Nigerian banking system, one can say that with the various forms of banks within the Nigerian banking system, it is not impossible for the banks to work positively towards the attainment of the targets of the MDGs.
At this point, it is necessary to consider these goals one after the other and describe ways through which Nigerian banks can contribute to, or support the achievement of the goals in Nigeria by the deadline of 2015.
4.1.1 Goal 1: Eradicating Extreme Poverty and Hunger
Around here, there is a local saying that if hunger is removed from poverty, the problem of poverty is solved. This portrays this goal as the father of all other goals. With good income, if poverty is removed and people are well fed, the possibility is high that there will be sound health for all.
The targets to be met under this goal are the reduction by half, between now and 2015, the proportion of people living on less than a dollar a day and the proportion of people who suffer from hunger. These targets could be achieved through a boost in agriculture, industrial development, full and productive employment and decent work for all, including women and young people. In this sense, the CBN can continue to evolve policies that will enable banks to support the development of our industries and agriculture production; and also formulate monetary policy that will guarantee price stability, moderate inflation and full productive employment. In this same direction, the bank should manage the level of liquidity in the economy prudently and also carry other banks along towards ensuring the success of the Policy Support Programme (PSI) in Nigeria as a poverty reduction strategy. The deposit money banks should intensify the financing of the productive sector of the economy, particularly, the real sectors of the economy. These banks should endeavour to open more rural branches to support the microfinancing activities of the microfinance banks in the rural areas. In a recent call, the National Association of Microfinance Banks urged the National Poverty Eradication Programme (NAPEP) to collaborate with its members in order to join forces in eradicating poverty in Nigeria. The association maintained that it was only through such collaborative efforts that Nigeria could achieve the Goal 1 of the Millennium Development Goals by 2015
4.1.2 Goal 2: Achieving Universal Primary Education
The target here is that by 2015, children everywhere will be able to complete a full course of primary school education. The contributions of banks in this regard should be in the area of creation of awareness by sensitising the parents and the entire children population on the need to be educated beyond the level of primary education. Through social responsibilities initiatives, banks can also support primary education by building and equipping classrooms nationwide and also by embarking on scholarship schemes
4.1.3 Goal 3: Promoting Gender Equality and Women Empowerment
What is to be achieved here is the elimination of gender disparity in primary and secondary education preferably by 2005 and at all levels by 2015. As pointed out under Goal 2, banks can also support awareness programmes in this direction. Statistics of female enrolment in primary, secondary and tertiary educational institutions in Nigeria as revealed by the CBN as at the 2005 were 53%, 44% and 43% respectively as against 51%, 48% and 45% respectively at the end of 2002. These depict reducing and lower figure for female and the indication is that if banks are to contribute to the achievement of this goal, special attention should be placed on sensitising the female to see the need to be educated at all levels, given the drop in the percentages over the years. Integrated Microfinance Bank, recently at a launching of its IMFB Relief Account which is structured to add value to the poor, indicated the bank’s interest in “empowering women financially so that they could sustain their families”.
Furthermore, towards empowering the women, banks should employ more women into the banking system and as much as possible, place the competent and qualified women in positions of power within the system.
4.1.4 Goal 4: Reducing Child Mortality Rate
The reduction of the mortality rate among children under the age of five, by three-quarters, by 2015 is what is being targeted under this goal. As part of the social responsibility programme of banks, huge support could be given to the development of the children departments/wards in our public hospitals with necessary support for the primary health care programme. Under this same initiative, banks can build special hospitals for children, give meaningful financial supports to the immunisation programme and more particularly, roll-back-malaria programme since malaria is one of the major causes of child mortality in this country.
4.1.5 Goal 5: Improving Maternal Health
The target expected to be achieved here is the reduction by three quarters, the rate of maternal mortality. Banks can perform the expected roles highlighted under Goal 4, but with a particular focus on mothers. Sensitisation of mothers on the need to be conscious of good health is another area where banks can make contributions towards the attainment of this goal.
4.1.6 Goal 6: Combating HIV/AIDS, Malaria and Other Diseases
Under this goal, the target is to halt and begin to reverse the spread of HIV/AIDS and the incidence of malaria and other major diseases. The intention was to achieve, by 2010, universal access to treatment of HIV/AIDS for those who desire this. Banks can make contributions towards the attainment of this goal by morally, logistically and financially supporting the activities of bodies, institutions and non-governmental organisations that have been making efforts to campaign against HIV/AIDS. National and state action committees on AIDS are examples of such bodies. As already stated, the roll-back-malaria project should be given good backing by banks. Awareness efforts in the form of television/radio jingles and programmes (drama, discussion programmes etc) and other activities like talk, symposium, lectures could be initiated, organised and sponsored by banks to press home the need for the Nigerian populace to be protective against the spread of HIV/AIDS, malaria, sexually transmitted diseases, diabetes, tuberculosis, meningitis, high blood pressure, hypertension etc. Banks can also provide financial supports to subsidise the cost of drugs that would prevent and cure these diseases, just for the affordability of all.
4.1.7 Goal 7: Ensuring Environmental Sustainability
The targets here are: (a) the integration of the principles of sustainable development into our policies and programmes in Nigeria and the reversal of loss of environmental resources; (b) the reduction of people without sustainable access to safe drinking water; (c) the achievement of significant improvement in lives of at least 100 million slum dwellers by 2020. Banks cannot positively impact the achievement of target (a) as much since this rests solely in the hands of government. However, the Central Bank of Nigeria, through developmental policy framework can advise the government and make good recommendations in this respect. At any rate, contributions could be made by banks to achieve target (b) through the social responsibilities of sinking good bore holes in areas where there are no safe drinking water. Some other meaningful social infrastructural facilities could also be made available by banks in the slum areas. Tree planting campaign and other campaigns against environmental degradation could also be organised and sponsored by banks.
4.1.8 Goal 8: Developing a Global Partnership for Development
The summary of the targets here are: (a) further development of open trading and rule-based, predictable and non-discriminatory financial system and commitment to good governance; (b) addressing the needs of the least developed countries in respect of relief in export tariffs and quota and debt problems; (c) addressing the special needs of the landlocked and small islands and developing states; (d) developing decent and productive work for youth; (e) provision of access to affordable essential drugs; (f) making available the benefits of new technologies, especially, information and communication technology (ICT).
Majorly, the achievement of targets under this goal lies in the hands of the government. However, the Central Bank of Nigeria as the apex bank and a monetary authority in Nigeria has, in the recent past made meaningful efforts towards the achievement of target (a) of this goal through the various reforms initiatives in the Nigerian financial system, in addition to the supports given to the Nigeria’s plan for prosperity known as the National Economic Empowerment and Development Strategy (NEEDS). It is hoped that the apex bank will continue in this direction.
In one way or the other, if banks can be in partnership with pharmaceutical companies in Nigeria, and through financial subsidy, Nigerians can have access to affordable drugs. In the area of information and communication technology (ICT), banks can endow various ICT initiatives and projects in order to support ICT education in Nigeria, right from primary schools to tertiary institutions. Computers and other ICT gadgets could be donated to various institutions as part of social responsibility to support the achievement of this goal.
5.1 Conclusion and Recommendations
From all indications, we can deduce that the Central Bank of Nigeria (CBN), the 24 deposit money banks, the development finance institutions, microfinance banks, primary mortgage institutions and other financial institutions can make meaningful contributions geared towards supporting and ensuring the achievement of the United Nations Millennium Development Goals by 2015. Through the various ways highlighted in this paper, this is possible. Therefore, in conclusion, it could be said that we can bank on the Nigerian banking system to achieve the United Nations Millennium Development Goals in Nigeria.
If the Nigerian banking system could be relied upon to some reasonable extent towards the attainment of the Millennium Development Goals, then, it is necessary to recommend that:
1. Banks within the Nigerian banking system should give promising assurance by working positively for the achievement of the United Nations Millennium Development Goals by 2015.
2. The Central Bank of Nigeria (CBN) should continue with the developmental programmes and the financial sector reforms; and also with policies that will ensure that productive sectors of Nigeria are favoured in all respects. The banks should not relent in its frantic effort in supporting government with good advice in the direction of the achievement of the Millennium Development Goals.
3. Microfinance banks and primary mortgage institutions in Nigeria should be well alive to meeting the purposes of their existence within the Nigerian economy that will surely ensure the attainment of the Millennium Development Goals, most particularly, Goal 1 which appears to be the centre point and father of all the goals.
4. Government should give the Nigerian Banks enough support and enabling environment to assist the banking system to contribute to the achievement of the United Nations Millennium Development Goals.
References
Ekezie, E.S. (1997): The Element of Banking: Money, Financial Institutions and Markets. Onitsha: Africana-Fep Publishers Limited.
Central Bank of Nigeria (2008): Annual Reports and Accounts and Statement of Accounts for the Year Ended 31st December, 2007. Abuja: The Central Bank of Nigeria.
Nwankwo, G. O. (1987): The Nigerian Financial System. London: Macmillian Publishers Limited.
United Nations (2005), UN Millennium Development Goals. Retrieved 22nd July, 2008 from http://www.un.org/millennium goals/goals.html
Wikipedia (2006): Millennium Development Goals. Retrieved 25th June, 2008 from http://en.wikipedia.org/w/indx.php?title=Millennium_Development_Goals
Amaefule, E(2008): Microfinance Banks Seek Collaboration with NAPEP, The Punch, June 11, Page 17.
Popoola N (2008): IMFB Unveils BELA, Relief Accounts, The Punch, August 5, Page 20
Published in Ondo State Banker – Journal of the Chartered Institute of Bankers of Nigeria, Akure Branch. Vol 4 No1, September 2008 – ISSN 0794-6171
No comments:
Post a Comment