Manufacturers and Micro, Small, and Medium Enterprises (MSMEs) are still awaiting the N200 billion intervention the Federal Government announced just over a month ago to cushion the impacts of petrol subsidy removal and naira devaluation.
President Bola Tinubu, in a broadcast on July 31, 2023, said his government would energise the MSME sector with N125 billion.
He said his government would spend N50 billion on a Conditional Grant to one million nano businesses between then and March 2024. “Our target is to give N50,000 each to 1,300 nano business owners in each of the 774 local governments across the country,” he added.
He said this programme would further drive financial inclusion by onboarding beneficiaries into the formal banking system. “In like manner, we will fund 100,000 MSMEs and start-ups with N75 billion. Under this scheme, each enterprise promoter will be able to get between N500,000 to N1 million at 9 per cent interest per annum and a repayment period of 36 months,” he added.
According to the president, N75 billion will be spent between July 2023 and March 2024 to strengthen the manufacturing sector and increase its capacity to expand and create good-paying jobs.
“Our objective is to fund 75 enterprises with great potential to kick-start sustainable economic growth, accelerate structural transformation and improve productivity. He said that each of the 75 manufacturing enterprises will be able to access N1 billion credit at nine per cent per annum with a maximum of 60 months of repayment for long-term loans and 12 months for working capital.
However, industry stakeholders told BusinessDay that they had yet to know the criteria for accessing the funds and the agencies to disburse them.
In recent months, rising inflationary pressures have weakened the purchasing power of consumers, even as businesses grapple with higher operating costs. This has forced many small businesses to close shop.
“What we just have is the announcement and nothing beyond that. There is no evidence that the funds have been released to the implementing agencies for the N125 billion for the MSMEs and the N75 billion for manufacturers,” Gabriel Idahosa, deputy president of Lagos Chamber of Commerce and Industry, said
He said when the president announced, the chamber advised that implementing intervention funds should be done quickly, but that had not happened.
“If the money were released in June, for the whole of July, the implementing agencies would have rolled out the processes on how to apply and the conditions for it. And by the beginning of August, most businesses should have been able to access those funds,” he added.
Femi Egbesola, national president of the Association of Small Business Owners of Nigeria (ASBON), said the only information they had was the pronouncement from the presidency.
He said: “So far, there has been no directive about the terms and conditions, requirements, applications and screening in accessing the funds. We have not seen the first batch yet that are the first beneficiaries of the funds.
“And even before the pronouncement was made, there were no prior consultations with us to know or get justifiable criteria that will be equitable for businesses. I am confused because this is not how things should be done.”
Segun Kuti-George, national vice president of the Nigerian Association of Small-Scale Industrialists, said the government could be working on the modalities for the implementation. Still, at least business organisations should know where the money is, who will be in charge, and who will distribute it.
“A lot can happen in one month if nothing is done, as many businesses could shut down. But if a lifeline exists, the story will be different,” he said.