When Vice President Yemi Osinbajo, disclosed in August, that about 110 million Nigerians were still living below poverty line, reactions that followed depicted the depth of policy failure to which the nation may have been subjected by successive governments.
Osinbajo, at a parley with members of the Alumni Association of the National Institute for Policy and Strategic Studies, in Abuja, expressed concerns about formulating and implementing policies that will have direct impact on the people.
He drew a linkage between extreme illiteracy and school dropouts believed to have reached unimaginable level of 80 – 90 percent and the inability of succeeding administrations to stem the tide.
The National Bureau of Statistics (NBS) reported recently that the country’s unemployment rate jumped from 12.1 per cent in the first quarter of 2016 to 13.3 per cent at the end of the second quarter. It also said the unemployed or underemployed figure increased from 24.4 million at the end of the first quarter to 26.06 million persons.
As a continental leader and the most populous country in Africa, the rate of unemployment and depth of hunger are bound to create unease in government. The need to produce alternative measures to contain this unpleasant situation and pursue genuine economic revival is almost becoming a national emergency.
Oil, Nigeria’s economic backbone is now quite unreliable, with the drop in production level and unstable market price. The Nigerian National Petroleum Corporation reported that the average daily output of crude oil from Nigeria between January and May 2016 stood at 1.97 million barrels per day. This is worrisome for a country whose current budget is benchmarked on 2.5 million barrels per day.
This is as a result of production shut-ins following tension and increased siege on oil installations by militants in the Niger Delta. Analysts are of the opinion that the lull in the oil sector is compounded by consistent fluctuation in the price of the product in the international market. Oil has continually been sold below $38 budget benchmark.
The slump has compounded the financial situation of almost all the states; many governors are incapable of meeting obligations to their workers, even after several attempts to remove ‘ghost workers’ from their payrolls. Despite the bailouts given by the Federal Government to solve this problem since the inception of the current administration, many states are still struggling to keep afloat.
The Federal Government has fully embraced the diversification option, promoting agriculture, solid minerals and the ICT sectors as alternative candidates. It is therefore imperative for state governments to ride on the platform already made available by the operational mandate of the Bank of Industry, BOI, to stimulate the desired economic diversification into these sectors.
The bank’s mandate is to provide financial assistance for the establishment of large, medium and small projects; expansion, diversification and modernisation of existing enterprises; and rehabilitation of ailing industries. BOI’s activities include project identification and selection; resource mobilisation and financing on long, short and equity terms. It also includes industrial policy formulation, business development, support and advocacy towards improving the effectiveness and efficiency of the local entrepreneurs through reduction in initial set-up costs, taxation, timing and cost of obtaining consent to mortgage as well as obtaining land for business.
In carrying out these mandates, the bank renders support to business that add value to local raw materials on the concept of value chain development, thereby generating employment for the youths and the unemployed; creating wealth and stimulating export.
The bank has collaborated with many local and international development organizations and some states governments towards achieving its mandate.
Currently 20 out of the 36 states have signed up to boost micro, small and medium enterprises by committing matching funds to enable them benefit from the varieties of services available on the BoI’s template. Katsina and Sokoto have committed N2 billion each. Abia, Anambra, Delta, Kaduna, Ogun, Oyo and Ondo states have earmarked N1 billion each.
Taraba has committed N630 million, followed by Niger with N600 million; Cross River, Edo, Gombe, Kano, Kogi, Kwara and Osun have also staked N500 million as matching fund, while Enugu and Ekiti have thrown in N283.6 million and N200 million respectively.
Between 2014 and March, 2015, the bank provided loans in excess of N18 billion to industrialise the South-West geopolitical zone, out of which over 80 firms and micro enterprises in Oyo state benefitted over N10 billion.
If states are committed to the vision to create jobs and find potent alternatives to the depleting earnings from oil, governors should consider the need to stimulate the small and medium scale enterprises in their states. This is a quicker and sustainable avenue to add value to natural resources, boost entrepreneurship and drastically reduce unemployment, especially among women and the young people. Doing this would engender feasible earnings, less volatility and restiveness through quick economic revival. Recently, BoI launched a N10 billion Youths Entrepreneurship Support, YES, project to empower youths with loans to start their business. Minister for Industry, Trade and Investment, Dr Okechukwu Enelamah, said more than 40 percent of Nigerian graduates had no jobs from an average of eight million citizens that join the labour job market annually.
The ‘YES’ project of BoI was part of the Federal Government youths’ employment scheme, a platform from which about 36,000 jobs are expected to be created annually. The scheme is exceptionally friendly as participants could access loan up to N10 million with single digit interest rate over three to five years re-payment tenure.
Among many of such interventions, the BoI, in cooperation with the Federal Ministry of Agriculture and Rural Development in 2014, unveiled the N5billion Cottage Agro Processing Fund. It also staked N13billion as Rice Intervention Fund for the establishment of 10 integrated rice mills and six cassava mills across the country.
Deserving states have not been left out. Recently, the Kaduna State Governor, Mallam Nasir El-Rufai disclosed that his state was partnering with the BoI to create jobs; specifically providing funds to enable the state take controlling shares in the ailing Peugeot Automobile Nigeria.
In August, the Gombe State Government sealed the N360million deal for the deployment of pay-as-you-go solar home systems in selected rural communities in the state. Gombe is one of the states that benefitted from the first phase of the BoI/UNDP rural electrification programme involving one community in each of the six geo-political zones. The success of the initial project informed the replication of same in nine other local government areas in the state.
Indeed many states are finding it difficult to raise tax at this time when Nigerians are faced with high cost of doing business and the prevailing economic reality confronting the nation. It is therefore expedient for state governors to grab the opportunities presented by the Bank of Industry to scale up the development of the MSMEs, especially along value chain strengthening in agriculture, solid minerals and even in the arts and craft industry!
With some patience and firm commitment, there is no doubt that the diversification window thrown open by the Buhari Administration in agriculture, solid minerals and the petroleum resources industries has the capacity to revamp the ailing economy, promote job generation and wealth creation at all levels.