The Federal Government of Nigeria has begun plans to shut down the National Economic Reconstruction Fund (NERFUND) over non-performance and non-performing loans of over N17.5 billion.
A source at the Federal Ministry of Finance said that a committee had already been formed to ensure smooth liquidation of the company by the end of October. The committee was expected to come up with recommendations concerning the welfare of the NERFUND workers and also what to do with the office equipment.
The committee was also expected to recommend an agency that would handle the numerous pending court cases initiated by NERFUND to recover billion of naira in bad loans.
According to the news source, about 1, 143 projects in the Small and Medium Enterprises sector were financed with the NERFUND loans between 2010 and 2013.
The source said that NERFUND currently had problems recovering the loans, adding that out of N17.5bn, the sum of N14.2bn representing 80 per cent was borrowed by a few people.
NERFUND was established by Decree No. 2 of 1989 to act as a catalyst towards the stimulation of the rapid rise of real production enterprises in the country with a seed capital of N300 million.
In 2002, the Federal Government merged Nigeria Industrial Development Bank (NIDB) and Nigeria Bank of Commerce and Industry (NBCI) to form Bank of Industry (BOI).
The Federal Government excluded NERFUND from the fusion of all development finance institutions (DFIs).
However, the agency’s capital had grown into billions of naira, but due to poor management the organisation had been in comatose since late 2013 loosing its capacity to carry out its mandate.
In June 2016 the staff of NERFUND took to the streets to protest the mismanagement of the agency funds.
The Federal government through the Minister of Finance, Kemi Adeosun intervened by first shutting down the agency following failure to reconcile the differences between the executive management and the entire staff so as to forestall a further breakdown of law and order.
Two weeks after the shutdown Adeosun officially instructed staff to return to work and appointed the Dr Ezekiel Oseni in August of the same year to act as Managing Director.
Just one year into his appointment the Federal Government had finally approved the winding up of the agency.