Pathway to Poverty Reduction, Economic Recovery

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The effective implementation of the Nigerian Economic Sustainability can provide succour to vulnerable Nigerians and set small businesses and the economy on the path of recovery, writes James Emejo

President Muhammadu Buhari on assumption of office for a second term made a solemn commitment to lift 100 million Nigerians out of poverty over the next decade.
According to the National Bureau of Statistics (NBS), more than 83 million Nigerians are currently living below the national poverty line.

The 2019 Poverty and Inequality in Nigeria report, published in May further indicated that the poverty rate in the country stood at 40.1 per cent.
Although the federal government had since mapped out policies and programmes to deliver on the president’s promises, the unfortunate outbreak and spread of the COVID-19 pandemic globally had constrained economic progress upon which results are predicated.

Notwithstanding, the MSMEs sector of the economy had enjoyed tremendous goodwill and support during the pandemic both from the public and private sectors.
This is because of their sheer potential to stimulate economic growth and development.
However, the COVID-19 had wreaked untold hardship on small businesses as a result of the knockdowns implemented by the government to curtail the spread of the pandemic across the country.

Several enterprises have had to shut down while many Nigerians lost their means of livelihood to the pandemic.
As a response, the federal government had intervened through the Central Bank of Nigeria (CBN) N100 billion targeted facility to offer initial palliatives to households and businesses as well as other measures involving credit forbearance.

But the size of the vulnerable population meant a lot of Nigerians may not have qualified for or had access to such palliatives.
However, the President Muhammadu Buhari -led administration recently flagged-off the Survival Fund and the guaranteed off-take scheme, both targeted towards assisting Micro Small and Medium Enterprises (MSMEs) to overcome the challenges posed by the COVID-19 pandemic.

Launched by the Minister of State for Industry, Trade and Investment, Mrs. Mariam Katagum, the interventions, altogether worth N75 billion form core part of the N2.3 trillion Nigeria Economic Sustainability Plan (NESP) currently being implemented by the present administration to help cushion the impact of the pandemic with a view to boosting the economy by saving existing jobs and creating new job opportunities.
The minister said while the survival fund will gulp N60 billion, the guarantee offtake scheme will cost N15 billion adding that the schemes will be implemented over an initial period of three months in order to provide immediate relief from the economic impact of COVID-19.

The interventions are essentially palliatives in the form of grants to help individuals and MSMEs navigate through the turbulent times and may not require payback mechanisms to the government.
Katagum, however noted that while the survival fund scheme is expected to commence immediately, the GOS will follow as soon as proper modalities are put in place to meet current realities.

She said the interventions are expected to impact about 1.7 million entities and individual beneficiaries across the country.
Katagum stressed that going by recent statistics released by Small and Medium Enterprises Development of Nigeria (SMEDAN) and the National Bureau of Statistics (NBS), indicating that over 95 per cent of the 41 million MSMEs in the country are micro businesses, the government cannot afford to neglect the huge segment of economic landscape which contributes high percentage to employment and GDP.

The minister stated that the survival fund which targets MSMEs and self-employed individuals, is a conditional grant to support vulnerable MSMEs in meeting their payroll obligations and safeguard jobs from the shock of the COVID-19 pandemic and seeks to salvage about 1.3 million jobs nationwide while targeting an average of 35,000 individuals per state.
On the hand, the GOS represents one of the federal government‘s economic support measures to assist micro and small businesses which are registered in the country to enable them minimise the effects of the pandemic.
She added that the government will leverage on the databases of micro and small enterprises in identifying those businesses that would qualify under the programme adding that the scheme will save about 300,000 jobs and 100,000 MSMEs by guaranteeing off-take of priority products.

She said:”It is to be noted that the two schemes are expected to be implemented over an initial period of three months in order to provide immediate relief from the economic impact of the pandemic.
“Provision has been made for 45 per cent female-owned businesses and five per cent for those with special needs.
“As I said earlier, while we are commencing the implementation of the survival fund immediately, the Guaranteed Off-take Scheme is still being reviewed to meet current realities especially with regards to product selection.”

She added that mechanisms were being put in place for effective and efficient monitoring and evaluation of the implementation matrix.
She said:”As expressly directed by Mr. President, our selection process is going to be very transparent and we will ensure very efficient and judicious use of the funds and other resources allocated to the schemes. Moving forward, we plan to give periodic updates to members of the press and civil society organizations, as the programme progresses.”

The Minister of Industry, Trade and Investment, Mr. Adeniyi Adebayo, had in August inaugurated a 10-man Steering Committee, chaired by Katagum to develop a workable template for the execution of the programme.
Commenting via his verified twitter, Adebayo said no doubt, if properly nurtured, both the MSME Survival Fund, Guaranteed Off-take Stimulus Scheme and N100 billion MSME Investment Fund will indeed cushion the impact of COVID-19 as well as stimulate industrial activities and secure jobs.

He added that a well-structured MSMEs sub-sector will contribute significantly to the attainment of Buhari’s aspirations to lift 100 million people out of poverty over the next decade.
Also, Vice President Yemi Osinbajo, posited that MSMEs are the engine room of the Nigerian economy, stressing that the federal government remained deeply committed to creating a more business friendly environment for them to thrive.

According to the VP, the Guaranteed Off-take Scheme fund which is a payroll support scheme will provide N50,000 in monthly salaries to staff of qualifying businesses for three months.
On his part, the Director General/Chief Executive, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Dr. Dikko Umaru Radda further clarified that the payroll support was not a loan but a conditional grant to cushion the effect of the COVID-19 pandemic on MSMEs in the country.

He said 500,000 vulnerable MSMEs will be supported in meeting their payroll obligations of between N30, 000 to N50, 000 per employee to safeguard the jobs of a maximum of 10 employees over a three-month period.
Radda, who doubles as Chairman of the Publicity and Logistics sub Committee of the National Steering Committee of the Nigerian Economic Sustainability Plan (NESP) said:”I want to assure you SMEDAN will continue to support all entrepreneurs across Nigeria towards ensuring that we achieve the MSMEs sub-sector of our dream in the areas of job creation, wealth creation and poverty alleviation.

The SMEDAN boss said MSME Survival Fund was designed to cushion the effect of the pandemic on the most vulnerable MSMEs across Nigeria, targeting 1.7 million individuals and entities across Nigeria.
He said that in addition to registered businesses, survival fund will also cater to a second category of Nigerians, the Self-employed, including service providers in the transportation sector, particularly bus/taxi drivers, rideshare drivers, auto-mechanics, artisans among others.

According to him, the guaranteed off-take stimulus scheme will protect and sustain the income of vulnerable Micro and Small Enterprises from the economic disruptions of the COVID-19 pandemic through the implementation of various initiatives aimed at boosting the production capacities of the small businesses as well as provision of grants.
He said the main objective of the scheme is to boost production capabilities of small businesses with the view to ensuring that they remained in business.

The MSME Survival Fund is a conditional grant to support vulnerable micro & small enterprises in meeting their payroll obligations & safeguard Jobs in the MSMEs sector. The scheme is estimated to save not less than 1.3 million jobs in Nigeria and specifically impact on 35,000 persons.
The Project Coordinator and Special Adviser to the President on MSMEs (Office of the Vice President), Mr. Tola Johnson, said among other things that the survival fund scheme will start with the payroll support initiative targeted at about 100 businesses and 500,000 individuals.

He said no fewer than 100,000 MSMEs affected by the pandemic will get the sum of N50, 000 each as grant while 250,000 businesses will also benefit from free registration by the Corporate Affairs Commission (CAC).
Lamenting that several MSMEs are currently not registered, he said though the registration is free for businesses, the government will pay the commission half the actual price.

He also said the transport and assistance support component of the scheme will provide a one-off payment of N30, 000 grant to about 333,000 beneficiaries.
However, Katagum, while calling for adequate sensitisation of both schemes said:”Our indicator of success will be the number of Nigerians from all walks of life, regardless of who they are, where they come from and who are able to benefit from the scheme without having to know someone.

“Our Committee is working round the clock to ensure that Nigerians benefit from each scheme seamlessly. These are the very ideals which Mr. President has emphasized as dear to his heart for the MSME space in particular and the country as a whole.”
She recently directed focal persons in all the states of the federation to intensify their sensitisation efforts for Nigerians to apply for the federal government’s palliative recently unveiled to cushion the impact of the COVID-19 pandemic on the country and insisted that all states needed to be equally represented in the scheme.