Godwin Emefiele, CBN Governor.
By Emeka Anaeto, Business Editor
The key focus of Nigeria’s public policy executives at this time is, exiting recession as quickly as possible; and there seems to be a consensus around this focal point across even political and policy divides.
Given the impact of COVID-19 on key macroeconomic variables, fiscal and monetary authorities took unprecedented measures to prevent any long-term damage to the growth prospects of the economy.
The policy executives sought to stimulate economic activities through targeted interventions totalling N2.5 trillion. Cumulatively the intervention efforts represent about 3.5 percent of Nigeria’s GDP.
The interventions focused on critical sectors such as agriculture, manufacturing, electricity, construction, small and medium enterprises and youth entrepreneurship.
This last focal point is vital as COVID-19 has exacerbated the already bad situation of Nigeria’s youth unemployment with huge implications for social stability.
A recent report of the World Bank sighted by Vanguard, titled, ‘‘Social Protection System During COVID-19’’, noted that, ‘‘before COVID-19, about 40 percent of Nigerians were living below the national poverty line, and millions more were vulnerable to falling into poverty.’’
The report further stated: ‘‘Simulations suggest that the crisis could push more than 10 million Nigerians below the poverty line unless adequate mitigation measures are implemented.’’
This indicates the timeliness of the commencement of the National Youth Investment Fund (NYIF) by the Central Bank of Nigeria (CBN).
Exploring the options to empower the youths against the backdrop of the social upheavals codenamed #EndSARS protest a few month ago, a social commentator, Joel Ajayi, also appraised the NYIF as an intervention by the Federal Government to tackle the alarming rate of joblessness amongst Nigeria’s young population.
Viewing this from the perspective of the #EndSARS protest where looting of both private and public property was the order of the day among other issues that dominated the unrest, one can only conclude that Nigeria’s unemployment poses a threat to development, security, and peaceful co-existence of the nation.
Ajayi stated: ‘‘When unemployment grows in any given economy, disaffection, dissatisfaction and discontent follows among the affected segments of society, leaving gross consequences. This, in turn could lead to frequent crises in society and even crimes which may taint the peaceful atmosphere of such a community.
‘‘Young men and women, who have put in a decade or two in schools and colleges, have dreams and aspirations. ‘‘The trauma of seeing their dreams shattered can and does lead to deep mental scars that are very difficult to face at a young age.
‘‘Opportunities for actualizing the dreams that had led them to seek higher education and further training are few and far between. And their ranks swell with each passing day.’’
Ajayi also noted that the recent creation of the N75 billion NYIF to provide opportunities for the youths to engage in the Micro, Small and Medium Enterprises (MSME), is a new inventiveness put in place by the government to create employment, alleviate poverty and increase the level of economic activities that will translate into economic growth and development in the coming days.
NYIF is a youth-focused programme in which each fund approval will range from N250, 000 to N50, 000,000, with a spread across group applications, individual applications, working capital loans set at three years, with a single-digit interest rate of 5%.
A minimum of N25 billion per year in the next 3 years, totalling N75billion will be required to ring-fence the NYIF.
Given the plan and in the seeming elusiveness of white collar jobs, NYIF would introduce self employment in the mix while fast-tracking development and quench the thirst of many Nigerian youth willing to go into businesses of their choices in the next three years.
Speaking at the unveiling of the NYIF process recently in Abuja, the Minister of Youth & Sports Development, Mr. Sunday Dare, revealed that NYIF was initially designed to lift just 500,000 out of unemployment but the government has adjusted the programme increasing it to 1.5 million.
The Minister noted that many youths in the country willing to go into entrepreneurship have a major challenge that largely manifested in lack of access to loans, saying that the initiative would help lift many of them out of unemployment.
Also speaking, the representative of the CBN, the Director of Development Finance Department, Mr. Philip Yila Yusuf, said ‘‘the process of accessing the loan is quite democratic; we are encouraging all eligible youth to apply and contribute to national development as N12.5billion is readily available for youth to grab.’’
Commenting on the initiative the Yiaga Africa Executive Director, Samson Itodo, noted that the establishment of the Youth Investment Fund underscores the commitment of the government to building a new Nigeria where the youth would be contributing significantly to national development.
President, National Youth Council of Nigeria (NYCN) Mr. Sukubo Sara-Igbe Sukubo, said the government has now challenged the youth to prove their capacity.
However, he expressed concern over protection of the fund from unwarranted intrusions. He stated: ‘‘We are witnesses to many poverty alleviation and wealth creation programs being cornered by the same politicians who at many occasions have become youths as well as elders to make sure that what was originally meant for the youths will come back to them. ‘‘We are in this country where leaders corner everything that is good for either self or family members.’’
However, it’s obvious that, with CBN’s control over the process it will be executed according to plan.
It was against the backdrop of the importance of integrity in the process implementation, as well as need to reach the target groups across the spectrum of the society that the World Bank report stated: ‘‘Recognizing the extraordinary scope of this challenge, the government has launched important new initiatives, through the National Social Investment Programs, but critical financing gaps and institutional challenges continue to undermine the effectiveness of the social protection system. Most safety nets are limited in scope, and social-protection programs cover only a small fraction of their target populations.’’
Also the World Bank further said, ‘‘While technological innovations can improve the effectiveness of social protection programmes and enhance their ability to reach poor and vulnerable households, the government must establish a fiscally sustainable social protection system that integrates the disparate programs implemented at the federal, state, and local levels.’’
To ensure independence from political interference disbursement will be through various channels, which will include micro finance, finance firms and deposit money banks regulated by the Central Bank of Nigeria and supported by Bank of Industry.