…24 out of 27 Borno LGAs lack presence of financial institutions
…15 councils cut off from national grid
The absence of financial institutions in most of the local government areas in Borno State following the 15 years of Boko Haram insurgency has slowed down the post-insurgency economy recovery of the devastated communities.
The destruction caused by the insurgency is quite unquantifiable, ranging from absence of banks to lack of electricity or epileptic services in almost all the rural communities. This has created huge challenge for the business owners and has further compounded the woes of the already-overstretched people of Borno State.
This is coming when the federal government is talking about financial inclusion across the country to checkmate illicit financial flows. The absence of banks in many local government areas apart from Maiduguri, the state capital, and Biu has limited the opportunities to finance small-scale businesses and eventually trigger economic growth in local areas and around border trades.
BusinessDay’s findings revealed that 24 out of 27 council areas of Borno State lack the presence of banks, which has forced residents to resort to electronic banking in place of cheques and other paper transactions. Most of the electronic fund transfers are authorised through cards and mobile phones.
The findings further show that at least 15 council areas have been cut off from the national grid, and for more than 10 years, do not have access to power supply due to the vandalism of electrical cables and other installations in these affected LGAs.
Speaking, Mohammed Alkali, a financial expert and public policy analyst, said that financial institutions facilitate trade and commerce and are important to ease of doing business.
“As it is well known, the rural sector economy is built around agribusiness. Lack of financial institutions in rural areas would negatively affect the viability and growth of the sector.”
He stressed that Bureau de Change operators exist in good numbers and have been greatly facilitating across-the-border trade, noting that NEXIM bank facilitates the financial component of export business for traders and merchants involved in across-the-border trade and commerce.
The experts opined that the Borno State microfinance bank may possibly scale up its presence in the rural areas to ease business facilitation and savings in the rural areas, adding that the government could also look at deepening the presence of point-of-service (PoS) outlets in the rural areas of the state, perhaps through the micro-finance and/or ministry of youth development.
He is optimistic that, “The PoS outlets could really help in granting access to financial services by the rural communities of Borno State. The PoS outlets have already been doing well in giving access to otherwise unbanked segments of society. However, it appears to be more concentrated in the urban areas of the Borno state, as is the case with other states.”
Mohammed pointed out that the economy could not grow when there’s a power supply outage. “Another thing is electricity; it helps in powering the economy and the rural areas aren’t exception. People in the rural communities need electricity to power their small businesses and agricultural activities, particularly in running irrigation schemes.
Lack of electricity would hinder the economic activities of the rural populace in a significant manner,” he declared.
He noted that the government must scale up its investments in the rural energy sector, perhaps through the rural electricity board. It could also look at the possibility of encouraging the use of low-cost solar systems for sustainable electricity supply in partnership with development and private sector operators.
According to him, “UNDP is doing energy projects in other states. The state government could explore this angle of opportunity. Also, Financial institutions are key in economic recovery and growth and in facilitating both local and across-the-border trades.
“I think Maiduguri, the Borno state capital and Biu town have adequate financial institutions’ presence coupled with the wide PoS outlets coverage. This has helped in the recovery of the local economy but the gap remains in the rural communities of the state.”
Abba Bukari, a building materials merchant in Bama, said there used to be about four banks in Bama before the advent of insurgency.
“It is difficult to do transactions worth millions now because there are no banks in Bama due to security challenges. Before, you could go to the First Bank or any other to do your transaction and come out quietly. Now, it is impossible as there are no banks in Bama anymore,” he said.
He noted that financial institutions motivate people to save and give loans to them to start small businesses. But now they rely mostly on PoS. “The economy of Bama town is now dormant with the absence of banks,” he said.
Ba’nna Mustapha, a PoS operator in Monguno town, said that the absence of banks has negatively impacted their economic recovery, urging the state government to look into their plight.
He stressed that banks that operated there years ago have all shut down following the activities of insurgents and that most people now use electronic transfers, which further reduce banknotes, for transactions.
“The situation we are in has affected the economy of the state to a certain extent; many traders that used to come from the southern part of the country have stopped because the essential services such as telecommunications networks, electricity, and, of course, bank services are not readily available in local government areas. Banks need service providers to work effectively.
“Almost every trader in the town is having the PoS to fill the gap. We are facing numerous challenges; we longer access loans except we have to travel to Maiduguri. Painfully, it is seriously affecting our business in Monguno,” Mustapha said.
Kakami Bukar, a grain trader, revealed that traders on market days prefer cash transactions due to fear of being duped.
He noted that not all salary earners receive bank payments. According to him, there are contractors and others, such as pensioners, who receive cheques and have to travel to Maiduguri to withdraw their money.
“These people suffer to travel to the state capital and join long queues of customers to collect their money,” he said.
Abdullahi Bitrus, a livestock farmer in Chibok town, lamented that the absence of banks and electricity has worsened the economic challenge in rural communities because people could not invest in capital projects that require electricity.
He called on the state government and security agencies to ensure the provision of adequate security for the motorists plying Maiduguri/Damboa/Chibok, urging the Nigerian military to expedite actions on the safety of financial institutions in the entire local government headquarters across the state.
“Insecurity is our major challenge; if our security agencies can wipe out the remnant of insurgents on the surface of Borno, I can confidently tell you that banks would reopen in Bama, Monguno, Damboa, Dikwa and others, but the challenges are still much with us. We have lost billions of dollars to border trades in Damasak, Baga, Malam-Fantori, Gomboru, and Banki due to lack of banks, good road networks, network services providers and electricity,” he pointed out.
A banker with First Bank Nigeria, who did not mention his name, said that there was more to achieve in the area of security, which requires all critical stakeholders to play their roles because the banks must be sure of the safety of their staff, facility and investments before they could reopen.
He further said that the government should work together with relevant security agencies to revive banks where normalcy has returned at least to provide small businesses with loans and promote the rural economy of farmers and business owners.
Bukar Yerima, acting director of Borno State Rural Electrification Board (REB), recently disclosed that 13 out of the 27 local government areas of the state were not supplied electricity due to the activities of Boko Haram terrorists and vandals who vandalised electrical installations in the affected areas.
He said that despite the worrisome situation, the state government has rehabilitated over 100 power transformers in various communities in the state and urged members of the public to protect electrical installations within their communities to curb the act of vandalism of electricity facilities.
He further said that due to the frequent vandalism and destruction of the Maiduguri-Damaturu 33kv lines by the terrorists, the state government created room for dualisation of the Maiduguri-Damaturu power lines, but that due to some inadequacy and challenges, the dualisation was not realised.
He noted that most of the electrical towers along Bama Road, Dikwa and Konduga, and about 10 other local government areas of the state have been vandalised, saying that security agencies must be commended for having recently arrested some vandals who destroyed electricity conductors and burnt them to sell as metal scraps.
“It will be good if the citizens can set eagle eyes on all electrical installations within their communities to curtail vandalism. The people should report suspicious activities to traditional rulers or heads of communities to inform the security agencies to take action,” Yerima said.
Ahmed Ashemi is the Sole Administrator, Borno Chamber of Commerce, Industries, Mines and Agriculture (BOCCIMA), has urged the federal government to support traders and all micro business owners in Borno state following the graving effect of the over a decade of insurgency that plunge the sector into crisis.
According to him, MSMEs bored the brunt of Boko-Haram era, stating that “It affected them completely looking at these activities now and the people are trying to recover from the nightmares of insurgency.
“The insurgency killed entrepreneurship and business in rural areas, especially in the local government council areas, and with this lack of security, it is not possible for any bank or any financial institution to go and even offer assistance to entrepreneurs in these local governments, and a lot of them have even migrated and come into this big city where there is security.”
As a way forward, he called for the federal government and military support in securing the rural environment.
“The military must rise up to support not only markets, but all sectors including agriculture, commerce, industry, mines and farmers to ensure access to safe cultivating and harvesting is guaranteed.
“You know, with the destruction of infrastructure like power lines, telecommunication masks, markets, hospitals, police stations, road networks, bridges and schools and so on, all these have immediate and the remote effect on the business ventures that even at the slowest micro level.
“The financial institutions themselves have to be given the assurance of security and safety of their staff and the monies they are collecting before they can go anywhere to start working,” he said.
He also recommended strong synergy between the military and all stakeholders to assess and identify areas where there is need for improvement especially in fight against insurgency.
He commended the state government for providing the enabling environment for business to thrive, especially reopening of villages and market activities.
