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Onwuka speaks on Diamond Bank's interest in tourism
(Vanguard) |
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By Jimoh Babatunde & Victoria Ojeme
The Head Commercial Banking at the Diamond Bank, Mr. Emeka Onwuka , has said that the country has decried the focus on oil and solid minerals as sources of foreign exchange for the country when there are other areas like tourism which is growing as major contributor to the gross domestic product of most countries of the world.
Speaking with travel journalists at the just concluded 2nd Commonwealth Tourism Ministers Meeting in Abuja where the bank sponsored a dinner, he disclosed that Diamond Bank as an institution is always seeking ways of assisting in developing different sectors of the economy. "And clearly! Tourism, all over the world is growing as a major contributor to the gross domestics product (GDP) of various countries of the world."
Emeka Onwuka continues "Unfortunately, the rate of growth in Africa is not as that of other countries of the world. And in Africa, the level of growth in the sector in countries like South Africa is higher than in Nigeria. We have tended not to develop our tourism sector, our interest mainly is in oil. But beyond oil and other solid mineral, tourism also presents potential area of generating foreign exchange earrings for the government.
Also when you have people coming into the country to take advantage of the tourism opportunities that exist here, it will lead to increased investment in the country. We have kind of discovered this niche and we are trying to help in developing the sector. Even though we have not done so much in this area, we can see ahead and say that it actually presents a world of opportunities for growth in business and also presents opportunities for banking business as well."
He explained that the bank involvement in tourism is to do what they have done in other sectors of the economy like transport adding that they are not just interested in funding infrastructure and logistics for tourism, "but actually funding the development of tourist sites; here we are talking of encouraging people that if they come up with a very good business model on tourist sites, we will be able to assist them to develop that."
On incentives to tourism companies in terms of interest rate, he has this to say: " Incentives actually come from government to encourage the banks and businesses to invest in a given area of the economy. Interest rate is a product of market forces. If market forces move interest rate to single digit, banks will abide by that. So basically the issue of interest rate depends on government’s fiscal and monetary policies. It is not dependent on what a bank wants to lend money on.
"However, what you should say is that if there are fiscal incentives that will encourage investment in tourism, the government should look at that area, not just for the banks but even the promoters themselves because it is a novel area; the time they invest in those areas, they may have to be encouraged by giving them incentives such as tax relief and so on. The tax incentives could be extended to the financial institutions that fund these transactions in the sector. This is because if they have tax incentives it means that their returns on such transactions are higher than the normal returns because of the incentives attached to such transaction."
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