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Industrial Development has been a major cornerstone of economic
development of any nation. The success of such a programme can be
attributed to the methods and modes of financing the policy. The study is
therefore focused on industrial Development financing in Nigeria. Since
NIODB is at the apex of industrial development financing, this study is
essential concerned with the role Nigerian industrial Development Bank
Limited (NIDB) in the industrialization of Nigeria
Apart from the government of the day which must take certain
position as regards the economic path of the country, hardly are there
institutions that dedicate the growth of industries in the country. It is
because of this that the author is motivated to carryout this research on the
role of Nigerian industrial Development Bank Limited (NIDB) in financing
the industrialization of Nigeria.


Title Page I
Declaration ii
Certification iii
Dedication iv
Acknowledgement v
Table of content vi
List of table ix
List of appendices x
Abstract xi
1.1 Introduction 1
1.2 Statement of problem 3
1.3 The Objective of the Study 4
1.4 Significance of the Study 5
1.5 Research Methodology 6
1.6 Scope and Limitation of the Study 7
2.1 Introduction 10
2.2 Definition of Development Bank 11
2.3 Industrial Development in the Developing Economy 14
2.4.1 Establishing of NIDB 15
2.4.2 Problems Besieging the industrial Development of country 17
2.4.3 The Promotion of Industrial Development 19
2.4.4 Contribution of Development Banks to the Economic
Development of a Nation


The major reason for the existence of public enterprises by various
governments in this country is to serve as instrument of economic
development of the country. However, this history of industrial
development by this government of this country is as old as that of
Prior to the establishment of the Central Bank of Nigeria, the Nigeria
financial system was characterized by the absence of interdependence
currency and machinery for industrial management, domination of
expatriate industries, the industries were predominantly owned and
controlled by foreigners, and the lack of local investment outlets resulting
in excess funds being repatriated for investment overseas.
The result of this phenomenon was the obeisance of any effective
machinery for industrial development financing both for the government
and the private sector. There were no capital markets, or any markets, no
stock exchange, no development banking institution, and a conspicuous
absence of development bank habit
To correct this in the Nigerian industrial system, the Central Bank of
Nigeria (CBN) was established by the Federal Government in March, 1958
under the Central Bank Act of 1958 and given the sole authority to issue
legal tender currency in Nigeria, to maintain external reserves, to
safeguard the international value of the currency, to promote monetary
Stability and sound financial structure in Nigeria, to act as banker and
financial adviser to the Federal Government and to act as lender of last
resort to the Commercial Banks.
Moreover, after the establishment of the Central Bank of Nigeria
(CBN), the idea of setting up development banks was borne when it
became clear that there was an urgent need for financial institutions
capable of providing medium and long term capital to fill a serious gap in
the industrial financial system. This is due to the fact that local investment
found it difficult to raise capital for the promotion of industrial activities.
To this end, various development banks were established to take
charge of the various sectors of the economy. The Nigerian industrial
Development Bank Limited (NIDB) was established to speed up the
industrial development of this country. The Nigerian industrial
Development Bank has stood the test of time as second financier of
industrialization in this country, while the Nigerian Agricultural and
cooperative bank Limited (NACB), was established to finance agricultural
development. This could be seen as a conscious attempt to promote the
development of agriculture and industry so as to raise the per-capital
involved and the standard of living of the people.
In the light of the above considerations that this research into the
government participation through the Nigeria Industrial Development
Bank (NIDB), an industrial development financing institution to the
development process of Nigeria is conducted under the caption “industrial
Development Financing in Nigeria”.
One of the objectives of any country is industrial development.
Since independence, successive government in Nigeria have pursued
various industrialization programmes with vigor. One of the ways through
which governments enhance industrial development of the countries is
through industrial financing since investors find it difficult to carry on with
industrial activities as a result of financing constraints.
Many government that were under developed were also to develop
rapidly through government participation by establishing financial
institutions. To that effect policies have been declared in which particular
emphasis was placed on industrial development projects.
A look at plan documents annual budgets and government policy
document confirms the priority position of industry in national
development strategies. Inspite of all this, Nigeria cannot be said to have
made any appreciable progress along the path of industrialization.
Despite some problems, Nigeria industrial Development Bank
(NIDB) has tried to play it’s role as catalyst in the industrialization process.
To the extent permitted by the economic environment within which it
operates, it has provided basic ingredients including medium and long term
finance as well as equity funding for industrial development projects.
entrepreneurial skill in the shape of the project initiation and promoting
technical expertise in project development as well as the managerial
acumen or ability for steering projects out of the woods and making them
operate efficiently.
On the other hand, although, the financier institutions are
autonomous, it may not be wrong to say that they solely depend on the
Federal Government for funds generation and are invariably affected
adversely by every change of fortune in public revenue.
Open market interest rates are so high that they find it quite
uneconomical to mobilize funds from the local market. That aside, the fact
that foreign loan have become increasingly expensive, there is a narrow
limit to how much foreign finance Nigeria industrial Development Bank
(NIDB) can mobilize with required Federal Government guarantee. The
study of this and other issues will be the concern of this research project.
The purpose of this study is to examine the extent to which the
NIDB has contributed to the execution of viable and socially desirable
industrial development projects in the country.
It is also aimed at identifying any obstacles of industrial progress
despite the fact that the government has spent a lot in financing projects
through the NIDB. It would also be understood whether this problem of
industrial growth is as a result of a poor financial system of the government
or poor management of the NIDB or the fault of the beneficiaries and
executors of the projects financed by the government through the Nigerian
Industrial Development Bank (NIDB).
The significance of this project is fourfold. The Government, the
Bank, the Nigerian investors and the society in general.
To the government, the study will reveal the extent to which NIDB
has contributed to the process of industrial development through the
provision of the missing factors necessary for development i.e. Capital
Management skills, etc.
To the Banker, the study will analyze its performance to date taking
cognizance of what it has achieved as against what it should have achieved.
It is hoped this will enable banks take necessary corrective measures that
should enable the bank obtain its stated objective.
To the Nigerian investor, the study would grant them the opportunity
of knowing how to make the best use of the facilities provided by the
To the society in general, it has hoped that the study would
contribute to knowledge, for it would serve as a result reference material
for schools and researchers in the field of industrial development.
In any research work, after the problem of the topic has been
identified, the next thing for the researcher to do is to make a plan of how
appropriately the study can be conducted. The plan usually incorporates
problems, statements and objectives of the study. Focus for the study
(individuals, groups or organizations) the population and sample collection
senses and types of data required, drafting of questionnaire and its
administration. Data analyzes and conclusion and finally limitation
through combination of methods of data gathering. The information’s
gathered were from secondary data published literature, primary data and
oral interview.
The bulk of the data were collected from published materials, which
were mainly available from NIDB Annuals Reports. Due to the scanty
nature of published materials, tremendous effort were made in search of
primary data and bank officials were interviewed personally by the author.
Some clients of NIDB were also interviewed and very useful information
was gather in the course of the interviews.
This research thesis focuses on the activities of the Nigerian
industrial Development Bank (NIDB) and also the role it has played in
industrializing the country.
Industrial financing involves the provision of funds for the
development of the nation’s sector of the economy. But the scope of this
study is limited to discussing only industrial development financing with
the Nigerian Industrial Development Bank (NIDB) as the reference
organization. Thus, non-industrial development banks are excluded in this
write-up. This is because, there exists significance differences between
thesis two groups banks in the type of instruments financed, loan terms,
and the kind of assets financed such that each type of bank is more
profitably evaluate separately.
For the purpose of this study, the period 1990 to 2993. the sections
and disbursements of this period 1990 – 1993 would be examined.
There are certain words and term in this research work, which may
not be clear to the reader. Thus, the terms needed to be given operational
definitions are as follows:
Is simply a group of firms producing the same or similar products for
the same market. This definition is self evident as in the case of footwear
(shop industry) coal (coal industry), clothing (Textile industry), oil (oil
industry), etc. and not self evident in the case of single plants. Multiple
products or multiple plant – multiple products firms. In the latter case
individual firm may be producing a range of dissimilar products and
participating in the activities of several industries.
Industries can be small scale or large scale if the classification is
based on the kind technology and they can be labour intensive or capital
intensive if the grouping criterion is the type of factor of production
This is a concept that has received a variety of definitions from
scholars. It is observed that to know a country’s development one should
seek to know what has happened to poverty, unemployment and inequality.
If all these three have declined from high levels, then beyond this has been
a period of development for the country concerned.
While some scholar observed that development involves not merely
economic changes, but also social ones and in many underdeveloped
countries introduce new sets of values and new concepts of society and
development. For the purpose of this work the researcher has the working
definition of development as the equitable sharing of benefits of any
national resources to all the securities of the economy.
Is that aspect of economics that deals with the determination of
government activities and expenditures, with the way by which the funds to

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