Crusoe Osagie writes that despite the recession, the Bank of Industry (BoI) seems to be showing promise in its effort to bail the nation out
As far as the Nigerian economy is concerned, there is not much to celebrate. The statistics are extremely depressing.
Although the National Bureau of Statistics (NBS) places unemployment rate at around 13 per cent, it is clear that the figure is inconsistent with the reality.
Perhaps, the NBS considers most of the adult population in the country who run errands from time to time for tips just as employed as those actually engaged by micro, small, medium and large organisations adding real value to the economy.
Apart from unemployment, there are various other gory statistics which indicate that the economy is in a desperate condition.
Inflation for example according to NBS is around 18 per cent; the value of the naira in real terms has depreciated by over 200 per cent in the past two years; bank interest rates is as high as 15 per cent compared to between 1 and 5 per cent in other climes.
On the face of it, the country has descended into irreversible doldrums but for glimmers of hope from some agencies of government like the Bank of Industry (BoI) which in the past two years has sort ways to power the economy back to growth.
Although BoI’s effort clearly falls below the inertia needed to reverse the ongoing recession, its initiatives stand as clear beacons to which other sectors must look in search of a way out of the current cataclysm.
Successful N535bn SME Intervention Fund
The focus on small holders in the economy, instead of the big hitters is the first indication that the operators of BoI understand their responsibilities.
The acting Managing Director BoI, Mr. Waheed Olagunju, recently disclosed that small and medium scale enterprises (SMSEs), which were granted loans from the N535 billion intervention fund, have achieved 95 per cent success rates.
The intervention fund was provided to the BoI by the Central Bank of Nigeria in 2010, for a period of six years.
Olagunju noted that the high success rate was due to the provision of an enabling environment, and a strong monitoring mechanism implemented by the bank to help the SMSEs, run successfully.
Speaking before the House of Representatives Ad hoc Committee investigating activities of federally-owned Development Finance Institutions (DFIs), Olagunju said the success rate was above that of the industry average which he put at 11 per cent.
Olagunju harped on the need to provide a business environment attractive to foreign and local investors, as a way to pull the country out of the current economic recession.
“Government cannot do much to reflate the economy except private investors bring in money. They are the ones who can help the economy out of recession. Industrialisation is a multi-faceted process that cannot be done by government alone,” he said.
“When investors come in, how they are treated at our embassies in their country when seeking for visas, matters a lot. How the airport security treat them, how the taxi driver and hotel receptionists receive them in Nigeria, and lastly, how bureaucrats handle their files while pushing for investment opportunities, all determine whether they bring in money or not. So government has very little to do with regards to the attitude of individuals because no profession preaches corruption,” Olagunju added.
N2bn to Empower Graduates Entrepreneures
The BoI has continued to train graduates with about 976 corp members qualified to access N2billion under the Graduate Entrepreneurship Fund (GEF) scheme, which is currently in its second phase.
The shortlisted applicants from the six geo-political zones were selected after a careful appraisal of applications submitted to the bank.
After undergoing intensive capacity development programme and upon submission of bankable projects, successful applicants will have the opportunity to get a maximum of N2 million at 9 per cent interest rate, payable over a three to four year period.
The scheme is an ongoing collaboration between the development finance institution and the directorate of the National Youth Service Corps, to encourage graduates of tertiary institutions in the country to become employers of labour rather than job seekers.
Speaking in Katsina State during the opening ceremony of the four-day in-class capacity building programme for participants, acting Managing Director of BoI, Mr. Waheed Olagunju said the initiative was designed to empower the Nigerian youth, knowing that government alone could not sufficiently address the unemployment situation in the country.
He said: ‘’At the end of the training and by the deadline of February 15, 2016 for the submission of loan applications, a total of 361 candidates had submitted requests for an aggregate sum of N695.16 million spanning across 27 out of the 40 Micro, Small and Medium Enterprise (MSME) product clusters identified by BOI.
“Subsequently, a total loan of N439.8 million was approved for 260 candidates and 140 projects have so far been fully implemented with a total sum of N194.4 million disbursed.
“These young Nigerians have not only taken themselves out of the job markets, but have become employers of labour such that their businesses have created 560 direct jobs and over 2,000 indirect jobs.”
Represented by the Divisional Head, SME North, Mr. Omar Shekarau, Olagunju explained that the second edition of the scheme was embarked upon based on the success of the first edition which saw 140 projects fully implemented with a total sum of N194.4 million disbursed.
He said that the programme created560 direct and over 2,000 indirect employment.
He added that the first phase had recorded a total of 896 participants at the 3-day capacity building programme which was held from 18th to 21st November 2015 at seven designated training centres across the country.
Also speaking at the event, the Special Assistant to the Governor on Youth Development and Chairman of the State’s NYSC Board, Alhaji Ibrahim Aminu commended the bank’s initiatives geared at encouraging youth entrepreneurship.
Aminu, however, challenged the corps members to take advantage of the opportunity provided by the scheme and the NYSC through GEF to become better versions of themselves and improve their society by floating viable businesses which would help create jobs.
Partnering States to Empower Youths
The bank has commendably worked with the understanding that the young people are the key to revamping the economy.
They have worked with the governments of most states in the country to guarantee effective penetration and empowerment of the grassroots.
For example, BoI, in collaboration with the Kaduna State government and Kaduna Business School, have developed a business development programme aimed at training 4,500 business operators in the state.
Tagged: “Kaduna Startup Entrepreneurship Program,”(KADSTEP), the programme is tailored towards improving the capacity of some select small and medium business operators in the state who-who have been penciled to benefit from the various loan programmes of the BoI.
Under the KADSTED programme, successful small business operators would be leveraging on the existing N1billion matching fund.
Olagunju, speaking during the signing of the deal, said the entrepreneurship programme would help to rejuvenate economic activities in the state through the creation of job opportunities.
“The Kaduna Startup Entrepreneurship Programme (KADSTEP),” is a sustainable job creation initiative designed with entrepreneurship as the common denominator. The programme is designed to run for 4 years in the first instance and the overreaching goal is the creation of a minimum 20,000 jobs in the intervention period through the registration and expansion of the capacities of about 3,500 to 4,500 businesses operating across the 23 local government in the state,” he said.
According to Olagunju, the programme was targeting the creation of 3,500 new businesses across the 23 local governments in the state,this is also in addition to building capacity for entrepreneurial management among the youth, 100 percent utilisation of funds with the BoI, Bank of Agriculture, (BoA), Central Bank of Nigeria, (CBN), creation of a minimum of 20,000 jobs and improving the internally generated in the state.
Governor of Kaduna State, Mallam Nasir El-rufai, said that his government decided to go into partnership with the development finance institution because of his firm conviction that the purpose of government is to create an enabling environment suitable for job creation.