GEM Project: Beneficiaries Cry Out over FG’s Delay in Funds Disbursement

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Emma Okonji

A group of small and medium enterprises (SMEs) who are major beneficiaries of the Growth and Employment (GEM) project, a World Bank/DFID funded project, supervised by the Federal Ministry of Industry, Trade and Investment, have called on the federal government to release the second tranche of the payment that was long overdue, to enable them revive their businesses that are on the verge of collapse.

The SMEs, numbering over 300, expressed fears that their individual businesses, established last year with the support of the Federal Ministry of Trade and Investment, may suffer total collapse, should government continue to withhold the second tranche of funds disbursement to them.

The federal government, through the Ministry of Industry, Trade and Investment, last year, assembled a crop of SMEs numbering over 300 and promised to assist them set up cottage industries by empowering them through the World Bank/DFID funded project for SMEs.

The essence was to provide the SMEs with seed-funding and monitor their business growth over a period of time. The SMEs, which were drawn from the YouWiN project of the Federal Ministry of Finance, signed agreement with the Federal Ministry Industry, Trade and Investment in March 2016, in order to benefit from the GEM project. PricewaterhouseCooper (PwC) was appointed grant administrators and KPMG, the monitoring and control body for the GEM project.

Some SMEs who spoke to THISDAY about their challenges with the GEM project, said the ministry, in July 2016, paid each SME between 25 per cent and 60 per cent of the total cost of funding their businesses, amounting to about N3 million to N10 million as the first tranche with a pledge to pay the second and final tranche after 90 days from the date of the initial payment.
The SMEs said the second tranche of the payment was supposed to be in October 2016, but 10 months after, it has not been paid. They expressed concern that the delay is threatening their businesses, as they have invested huge sums already.

According to the SMEs, because of the long delay in payment of the second tranche, over 80 per cent of them borrowed from bank to invest in their businesses, pending when the second tranche would be paid.
Narrating their ordeals, they said they were already indebted, having invested in equipment and raw materials and could not continue with the business for lack of funds. Some said their rents for their cottage industry space had since expired and the landlords are threatening to quit them.

They also explained that they have lost contact with the Federal Ministry of Industry, Trade and Investment, since their lines of communication were no longer going through, despite several trials to reach the government officials on phone.

They called on the federal government to intervene and compel the officials of the Federal Ministry of Industry, Trade and Investment, to pay them the second tranche of the funds without further delay. “The machines already bought for production are wasting away and we are owing rents and salaries of employed workers,” the SMEs told THISDAY.

They stated that the federal government introduced them to the businesses only to abandon them midway to perish with their business ideas.
They however threatened to mobilise their colleagues for public protests in Lagos and Abuja next month, if the government fails disburse the funds meant for the SMEs.