Emma Ujah, Abuja Bureau Chief & Emmanuel Elebeke
President Goodluck Jonathan has pledged to frontally tackle all problems militating against Micro, Small and Medium Enterprises, MSMEs, in the country, as he commenced the disbursement of Central Bank of Nigeria, CBN, N220 billion fund for that sector, in Abuja, yesterday.
Speaking at the crowded event, he noted that MSMEs formed the bedrock of all economies, worldwide, providing an average of 47 per cent of the national Gross Domestic Products, GDP, and must be rejuvenated in Nigeria.
His words: “As Africa’s largest economy with excellent prospects of becoming one of the 20 largest economies in the world in the nearest future, it is imperative that the challenges confronting MSMEs are addressed frontally at this time if all of us work together.
“There is no doubt that a vibrant MSMEs sub-sector is indispensible to achieving the transformation agenda of this administration.”
President Jonathan disclosed that there were about 2.7 million MSMEs in Nigeria, but that the number was too small compared to a country like Indonesia with about 40 million MSMEs.
He added: “The MSMEs initiative is a demonstration of the administration’s commitment to its vision for job creation and inclusive growth.
“Small and Medium Scale Enterprises, SMEs, are recognised all over the world as engine of growth in any development and growing economy. Due to the inherent labour intensive production processes, they also provide a viable platform for job creation globally.”
The president noted that stable power supply was the critical to industrial development, as well as, economic progress and pledged that his government would vigorously pursue better power supply.
Patronage of Nigerian cars
The president urged the Nigerian public to patronise locally made goods, especially the cars being assembled in the country, noting the new automobile policy would enhance the MSMEs if Nigerians bought into it.
He said: “The new automotive policy has already received commitment from investors to sale motors, which had produced the first set of locally produced cars in April this year. Our expectation is that special patronage of the automotive industry will significantly boost the MSMEs in our nation”.
in order to reduce the cost of manufacturing, thereby making Nigerian goods more competitive in both domestic and international markets.
“It is indeed encouraging that the CBN is working very closely with the ministries of petroleum resources and power as well as the National Electricity regulatory Commission, to address the issue of gas supply that will increase power generation to 5,000 mw within the next few months”, he said.
The president urged state governors to key into the efforts of the federal government to promote inclusive growth through micro credit delivery, job creation, poverty reduction and economic empowerment.
According to him, “this initiative will complement our effort to transform the economic. We must continue to work together to provide the opportunity for our people to live better and more productive lives”.
Loans attract 9% interest
In his remarks, the central Bank Governor, Mr. Godwin Emefiele, disclosed that beneficiaries would be required to re-pay the loans with 9 per cent interest and that 60 per cent of the N220 billion set aside for the initiative would be given to women.
His words, “the funds which will be accessible in equal parts to micro enterprises and SMEs, is expected to be disbursed by participating state governments and financial institutions at a maximum of 9% per annum to end users, inclusive of all charges. \in view of the enormous contribution of women to economic growth, we have earmarked 60% of the fund to then, while special consideration will also be given to the economically active but physically challenged persons as they will have access to a minimum of 2% of the funds”.
He added that the initiative was an important milestone in CBN’s efforts to build an inclusive economy and that the funds would be disbursed through participating state governments and financial institutions that have fully met its requirements.
Specifically, the loans would be administered through private or states established microfinance institutions, finance houses, cooperative finance agencies; and to be disbursed through commercial banks
According to the CBN boss, it would significantly address the problem of access to finance by MSMEs and shore up their potentials for job creation with a view to reducing poverty in the country.
In his remarks, the Governor of Niger state, Dr. Babangida Aliyu, commended president Jonathan for appointing Mr. Emefiele, whom he described as “a man who leaves politics to politicians”. Delta and Akwa Ibom States received N500 million and N200 million respectively for onward disbursement among entrepreneurs in their states.