Wednesday, 3 February 2016


The Federal Government’s proposed N60 billion ‘one-time soft loan’ targeted at one million artisans, market women and men under the administration’s social protection programme is desirable. Against rising unemployment across the nation, leaving most citizens impoverished in a floundering economy, a certain level of revitalisation of the small-scale industrial sector is needed, and this could be the launch pad.

However, the government must think through this initiative which, for now, seems not borne out by clear-cut policy, so that the scheme would not just be about giving out money to political jobbers, idle looters and others who may have access to the fund’s disbursers. The focus has to be on disbursement for productive purposes alone, in which case, what goes in would be measured against the output, through effective monitoring and encouragement of beneficiaries.

Unemployed millions of Nigerians including artisans would be forgiven any probable indifference to the new initiative, having fallen victims in the past of a plethora of interventionist funds that were literally programmed to fail due to poor implementation and greed of the superintending government officials. Then, funds disbursement lacked transparency while monitoring process was almost non-existent. For a long period thereafter, corruption thrived as officials looted the funds with impunity. This proposed artisan support scheme must, therefore, be spared such a fate.

It is imperative that the new scheme succeeds because in the present situation characterized by free fall in international oil prices, and by extension, dwindling revenues for government, there is no room for resource wastage either by government officials or the recipients of the loans. Gratifyingly, the Muhammadu Buhari administration’s sight seems set on the path of rectitude. It would, therefore, be a plus for the economy if the government got this scheme and other attempts at kick-starting the small and medium-scale industrial sector right.

The scheme is meant to be a micro credit component of a six-point social protection programme embedded in the 2016 federal budget proposals already before the National Assembly. This and the five other social protection investment plans believed to be anchored in the N500 billion-budget provision, according to estimates, is an unprecedented nine per cent (9%) of the total budget. (The other five plans include Teach Nigeria Scheme targeted at employing 500, 000 teachers; the Youth Employment Agency (assembling 300, 000-500, 000 non-graduate youths for skill acquisition); the Conditional Cash Transfer Scheme (conditional payment of N5000 per month directly to one million extremely poor Nigerians); the Home Grown School Feeding Initiative and the Free Education Scheme for Science Students.

These ideas are at once good, ambitious and achievable. What the government needs is focus, commitment and honesty of purpose. Genuine desire for service to the people is the key to any breakthrough with these social plans. Past failed schemes are there to serve as guides: the National Directorate of Employment (NDE); the partly-successful Micro Finance Banks, after the much-abused Peoples Bank and the latest in the failure list, the Subsidy Re-Investment Programme (SURE-P).

The small and medium scale enterprises (SMEs) certainly are yet to have full and desired impact on the economy because of poor policy and corruption. The Youth Employment Agency sounds more like an offshoot of the NDE. The envisaged change must, however, not only be in the nomenclature. This must be packaged to have the desired impact on the citizens. It bears restating that beneficiaries, operators or coordinators of the proposed support schemes should realize that this is no longer a share of any national cake. On the part of the government, there has to be a conscious effort to build upon existing models to get the loans to targets, especially by harnessing structures like the cooperative societies.

Some other non-governmental bodies have made similar efforts at micro credit advancement and these could serve as template for the planners of the new scheme. For instance, the International Institute for Local Development (IILD’s) Warajiji micro-credit scheme is a pointer. Borrowing heavily, from the Grameen Bank model in Bangladesh, the objective has been to improve the economic base and overall socio-economic conditions of disadvantaged women and their families. That scheme currently provides interest-free loans to about 150 women in two local communities (Karamajiji and Waru) on the outskirts of the Federal Capital Territory, Abuja. The IILD loans are known to have extended and easy repayment schedules and are administered in supported groups that promote knowledge sharing, learning and accountability. It has been a great success.

A solid relationship also has to be established between loan managers and collectors. Beneficiaries can be encouraged with incentives to show more interest in producing raw materials for use at other levels of production to boost the economy, improve commerce and provide more jobs.

The government has rightly identified micro-credit as a tool for poverty alleviation. In that wise, factors constraining its effectiveness should be tackled and removed while credit delivery and sustainability in public schemes should also be promoted. There must be a conscious effort on every front to push the growth of the Nigerian economy. This is a good starting point, provided the implementation is right. (Source Guardian)