The Nation Newspaper

Tag: Funding

  • Ambassadors’ recall and unending funding crisis

    Ambassadors’ recall and unending funding crisis

    • By Bisi Olawunm

    The  Presidency  on September 2, 2023 announced world-wide recall of Nigerian ambassadors in its diplomatic missions, except for those at the United Nations in New York and Geneva. Presidential spokesman, Ajuri Ngelale, who  announced this, said the two UN ambassadors were  excluded to allow them prepare for the president’s attendance at the UN General Assembly ( UNGA ) later in  the month.

    The recalled ambassadors, appointed by President Muhammadu Buhari and deployed in January  2021,  were given a grace period of two months, for a proper disengagement, till October 31, 2023 when they are all expected to be back in the country. The total recall  is apparently to allow the president set a new foreign policy thrust reflective of his administration’s objectives. Nigeria has 109 diplomatic missions, worldwide, comprising 76 Embassies, 22 High Commissions and 11 Consulates.

    ‘’ The president is determined to ensure that world class efficiency and quality, will henceforth, characterize foreign and domestic service delivery to citizens, residents and prospective visitors alike’’, Ngelale  stated. He explained  that ‘’the president’s  directive is sequel to his careful study of the present state of affairs at Nigerian Consulate Offices and Embassies worldwide’’ and in line with his renewed hope agenda.

    Communication from The Presidency sounded grandiose in its rationale for the immediate recall of the ambassadors. The question is : What are the highlights of the findings from the “study of the state of affairs  at  Nigerian embassies worldwide “  which warranted this tsunami of total recall of ALL the ambassadors  with immediate effect ?   Secondly, the recall appears rather precipitate. This, therefore, does not give the impression of a well thought out process.   Thirdly, the recall signals   continuing  policy tumbles which have emerged as the trademark of the Tinubu presidency – from the cavalier statement of ‘subsidy is gone’ in his inaugural address;  the delayed and eventual summersaults on ministerial nominations ; ethical deficit of the corper-minister appointment and lingering untidiness in palliative management. 

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    This set of ambassadors had faced trauma in their posting. The diplomats, 95  of them, made up of 52 non-career and 43 career ambassadors, appointed by President Muhammadu Buhari, had been screened and ratified by the senate in July  2020 but were not deployed till January 2021. They were appointed for four year tenure but the mass recall less than three years was justified on the basis that they serve at the pleasure of Mr. President.  However, you wonder :  What is the urgency of the moment for a fledgling administration,  buffeted by political turbulence and requiring some stability,  to embark on this mass recall of ambassadors, worldwide  ?  

    What is particularly confounding is that no lesson seemed to have been learnt from the president’s disastrous outing in his first foray on the foreign policy front in leading ECOWAS to the precipitate threat of military  invasion of Niger Republic to restore democracy and reinstate toppled President Mohammed Barzoum.   Up to this point in time, it is the force of unanimous public opinion, opposed to military invasion as first option, that has restrained and rescued Tinubu from a headlong rush into a catastrophic war in Niger Republic.

    However, it is not enough to just recall all ambassadors, perhaps only for the hurried purpose of  giving patronage appointments to the president’s men and women.  The word, ‘’ hurried ‘’, is used advisedly, given the rather impulsive tendencies of the administration.  

    So, the posers for the Minister of Foreign Affairs, Amb. Yusuf Tuggar  are :  What are those modalities being put in place to ‘’ ensure  world class efficiency and quality  service delivery‘’ by the country’s diplomatic missions ?  What are those core foreign policy values  the ambassadors are to implement ?  To what extent should Africa remain centric to the nation’s foreign policy, given the minister’s ‘’ Strategic Autonomy ‘’ doctrine ? 

    From personal experience as a Foreign Correspondent in Washington, D.C. United States, from 1985 to 1989, and on several  visits thereafter, three major  issues can be identified  with our diplomatic missions. .  These are inadequate funding of the embassies, laid back attitude of many diplomats and their hostile relationship with Diaspora Nigerians  in their host countries. 

    FUNDING.  The poor funding of Nigerian embassies is a scandal.  There are instances where diplomats are ejected from their residences while many embassies suffer embarrassing deficit in running costs, a recurrent issue that seriously constrain activities of the missions. The Ministry of Foreign Affairs ( MFA )  in its recalibration would need to creatively address this protracted funding problem. It is instructive that Saturday PUNCH of September 9, 2023 had this banner front page headline :  ‘ NIGERIAN EMBASSIES IN FINANCIAL CRISIS AS FG DELAYS FUNDS ‘. It is an indictment of and shame on successive leadership of the Ministry of Foreign Affairs that 38 years after my 1985 report on the irresponsible operational under funding of our embassies, the problem has persisted till date. Destitute diplomats constitute a national embarrassment in their host countries. To imagine that these are the same state officials expected to project the positive face of the  country abroad !  The PUNCH  report showed that not only are budgeted funds to the missions drastically cut, their remittance  get delayed for months. A Foreign Service Officer ( FSO), speaking on condition of anonymity, highlighted the plight of the diplomats : ‘Many of our staff members have been evicted for not paying their rent . It happened in Budapest, Hungary, in 2021 when some Nigerian staff members were evicted from their apartments  for failing to pay their rent’.  Continuing, the FSO had stated :  ‘There are cases where diplomats borrow money to settle school fees and rents to avoid eviction. Some borrow from their friends in Nigeria and also from the Nigerian community or the local churches they attend in their country of service’.  That is the extent to which diplomats are brought to ridicule.  Even when they are recalled, it is usually a struggle to get paid the months of backlog  foreign service allowance owed.  I knew a diplomat at the Nigerian embassy in Washington D.C. in the late 1980s who got stranded in the U.S. when he was recalled  prematurely after two years, against his expectation of a four-year tenure, was owed months in allowances and could not face the shame of returning to Nigeria literarily a destitute – no car, no savings.   A retired diplomat, Rashid Akinkuolie, corroborated the FSO’s statement on funding crisis :  “It is a perennial issue, it is not something that is just happening today “. According to him,  the problem was that their “vote is converted to dollars, euros, pounds and other currencies and this causes  devaluation  and a lot of issues. Sometimes, they can’t pay salaries in two or three months, they can’t pay utility bills, local workers and meet other responsibilities”.

    With the wholesale recall of ambassadors, to what extent is the MFA is a position to settle the outstanding and relocation entitlements of the diplomats ?  Why has it been impossible to make a SPECIAL CASE for denominating budget allocation to the foreign missions in dollars, as a universal currency , to save the missions from the vagaries of a crazily  declining naira value ?  The government should consider reducing the number of the nation’s diplomatic missions to what it can conveniently fund. Going forward , the level of strategic importance,  economic relationship and the population of resident Nigerians  should determine location of the country’s diplomatic missions while some  other countries can be covered, concurrently, from a neighouring country.

    While the funding burden remains an albatross on government, ambassadors, on their part, should imbibe cost cutting measures in terms of cost of rent on accommodation and public school for children of diplomats in advanced countries.  Ambassador Ignatius Olisemeka, Nigerian ambassador to the U.S. took such prudent measure in the mid 1980s when he got  diplomats serving in the mission to withdraw their children from fee-paying  private schools to free public schools. Public schools in the U.S. have top facilities, so, going to private school, particularly at elementary and high school levels, was just ego-induced status symbol for diplomats!.

    LAID BACK WORK ATTITUTE.   Many diplomats are not proactive in terms of working to timelines and deadlines, a carry-over from the bureaucracy  they are used to in Nigeria. This lethargy applies particularly with political officers and Information Attaches, requiring performance monitoring unit at MFA headquarters.

    ECONOMIC DIPLOMACY.  Activities  in many embassies are routinised  and mainly about Protocol Diplomacy  and the Cocktail Circuit !  There is need for a paradigm shift with emphasis on  Economic Diplomacy, which Prof. Bolaji Akinyemi had insightfully promoted as Foreign Minister between 1985 and 1987. 

    EMBASSIES’ – NIGERIANS’ RELATIONSHIP.  It is a notorious fact that there is a prevalent hostile relationship between many embassy staff and Nigerians in the Diaspora.  This sour relationship has persisted over the years.  The diplomats, generally, relate with  Nigerians with aloofness and condescension. Two issues generally bring Nigerians in Diaspora in contact with embassy staff – passport/immigration matters and education/scholarship issues. I will cite three instances in Washington D.C. over the decades.  In 1986, while I was still a Foreign   Correspondent in Washington, my intervention got a woman and her three kids from North Carolina  who  got shut out of the Embassy for arriving five minutes to 1.00pm when the embassy closes to the public, got her admitted into the embassy, attended to and her problem resolved.  On another occasion, a PhD  doctoral student who was to be wrongly deported had sought the intervention of our diplomats but was shunned at the embassy. He came to NAN office at the National Press Building in Downtown Washington to narrate his ordeal. I filed a news report on his plight to Nigeria that attracted the intervention of the Foreign Ministry in Lagos and his deportation was stopped. That is how dismissive of Nigerian embassy officials can be.  The third instance was in 2018 while I was on vacation in the U.S. I went from Baltimore, Maryland  to Washington D.C  with a Diaspora Nigerian who was having issue with her passport renewal only to be told that passport booklets have not been available for months !!   Passport booklet scarcity is a recurrent problem in Nigerian diplomatic missions which the new Minister of Interior must tackle, head-on.

    • Dr. Olawunmi, Senior Lecturer, Department of Mass Communication, Adeleke University, Ede, is former Washington Correspondent of the News Agency of Nigeria and Fellow, Nigerian Guild of Editors. 
    • Email  :olawunmibisi@yahoo.com   PHONE :  (SMS ONLY )   0803 364 7571 Sunday. September 10, 2023.

  • Funding, others may truncate electricity access targets

    By Akinola Ajibade

    The Federal Government’s target of expanding access to electricity to 150 million people next year may be truncated, if the problem of inadequate funding is not adressed, the Founder, Change Partners International, Mr Akachukwu Okafor, has said.

    The goal of providing electricity to about 190 million people across the country by 2030 may also be affected.

    In a telephone interview with The Nation, he said the 150 million people represent 75 per cent of the country’s 200million population.

    According to him, funding is key to realising the short- and long-term goals, which the Federal Government has set for the sector.

    He said other measures include provision of a strong energy market and other infrastructural facilities.

    He said the sector would  grow when all these things were in place.

    Okafor said: “These targets are achievable. Once, the government can provide adequate funding, provide a virile market for trading, among other facilities, the sector would bounce to reckoning. The reason is because the three key stakeholders namely the power generation companies (GenCos), distribution companies (DisCos) and the Transmission Company of Nigeria (TCN) would be able to play well in the industry.”

    Still on market, he said the  Nigerian Electricity Bulk Trading Company (NBET) would be strenghtened once there is enough capital.

    Cases, such as rising debts owed by the GenCos for providing electricity to the DisCos, would not arise once there were enough funds, coupled with provisions of modern infrastructure by operators.

    He advised the Federal Government to provide funds to procure transmission equipment, adding that the sector is still using obsolete equipment.

    This, he said, was evident from the collapse of the grids, a development which has made it difficult to evacuate electricity for consumers.

    He said the sector could still be positioned for growth, irrespective of the problems.

  • Heritage Bank, others growing MSMEs with funding, innovation

    The drive to encourage the growth of small businesses has led some banks, including Heritage Bank, to initiate some policies to advance the fortunes of the Micro, Small and Medium Enterprises, writes Financial Analyst Doyin Dare

    There has always been this talk about Nigeria reviving its real sector to boost the balance of payment situation, after the poorly conceived Structural Adjustment Programme of Nigeria’s military regimes sent the economy plummeting disastrously down the cliff. This renaissance is not driven by wishful thinking. It is powered by men, infrastructure, creativity, big ideas and, by extension, institutions that provide financial foundation for new businesses, oxygen to revive those that are dead and a shot in the arm for others that are on life support. Among such organisations, Heritage Bank occupies a front row seat in Nigeria.

    Heritage Bank,  is a financial services institution, one of the commercial banks licensed by the Central Bank of Nigeria, the country’s banking regulator, with a National Operating License, that offers Retail Banking, Corporate Banking, Online/Internet Banking, Investment Banking and Asset Management Services.

    Right now in Nigeria, there is a rush by business owners. An analyst argued that it decided to fill the vacuum left by Diamond Bank, which developed a lot of products for Small and Medium Scale Enterprises (SMEs), before it was acquired by Access Bank Plc last year.

    Another reason is that Heritage Bank made up its mind, ab initio, to help build, revive and support businesses. In July 2015, Ifie Sekibo  its Managing Director/CEO said: “Heritage Bank’s philosophy is to create, preserve and transfer wealth across generations. We are in the business to provide service per excellence and to grow with our customers.

    “We are here to help our customers create wealth for themselves, assist our partners preserve their wealth and guide them in transferring it to the next generation. We have specialised products that enjoy zero commission on turnover charges and high interest yields, amongst others for our partners. These products help us in supporting our customers’ businesses and taking them to greater heights.”

    In recent times, Heritage Bank was one of the major financiers of Golden Guinea Brewery, which, for 16 years, was virtually dead. Heritage Bank, Nigeria Export and Import Bank (NEXIM) and the Bank of Industry synergised to resurrect it. Anyone in his 60s is bound to remember with nostalgia that Golden Guinea Brewery was one of the major achievements of Dr Michael Okpara, Governor of Eastern Nigeria, who established it in 1962. The company went under in 2001 when its boiler exploded.

    The three banks  injected $10million life line into the company.

    Enterprises that have benefitted from Heritage’s assistance are: Vera Karris Accessories, Infusion Cakes, Niuma Boutique & Accessories, David Wej Global Ventures, makers of quality shoes; De-Vine, makers of fresh juice; Heart Affairs and Africanna Accessories, among others.

    Apart from access to finance made easy for them, many enterprises have also benefitted immensely from the exposure given to them through the innovative Heritage Bank’s “Sunday Small Market.” This is a market that brings together the bank’s Micro, Small and Medium Scale Enterprises’ (MSME) in the country to display their wares and crafts, which are locally made, and linking them with their customers.

    The maiden edition of the market opened in Lagos early last year and the bank has kept its promise to rotate the market to different parts of  Lagos. There are plans by the bank to make this service available to other commercial cities in the country. The Sunday Market is part of the several initiatives of Heritage Bank to bring visibility to its customers and provide a platform for the SME customers to showcase their products as well as interface with their existing customers and prospective ones.

    Heritage Bank does not restrict its activities to existing businesses or relationships with established business only. It believes in development of skills and manpower.

    As part of its ways of promoting entrepreneurs, the bank, in October 2014, held a two-day Business Exhibition at the Heritage Bank Training Centre, on Adetokunbo Ademola Street, Victoria Island. It was, according to the bank, meant to support the growth of Small and Medium Enterprises (SMEs) in the country.

    That year, Heritage Bank made possible some value-added offerings to participating organistions: business clinic, funfair, networking, MasterCard utilisation and opportunity for non-card holders to open their accounts. Google and Microsoft were on hand to guide business owners on how to take their businesses to the higher levels.

    In all the above, the multiplier effect is employment generation. In other words, if businesses have money through banks (like Heritage); they can expand and employ the jobless. Even young graduates with start-up funds can decide not to seek employment, but to be job creators. This is to say that Heritage Bank is among the financial institutions helping to reduce the army of the unemployed whose hands could otherwise have been the devil’s workshop for crimes.

    One other area that Heritage Bank is affecting the lives of the people is that it does not fail to explain the economic policies of government to the public in order to make those in the sectors key into them, grow and provide a platform for assistance from the bank.

    One of such explanations was offered by the Managing Director/CEO, Ife Sekibo,who admits that the Nigerian government has, indeed, done a lot in the agricultural sector, saying government has carried out various transformation agenda like Nigerian Incentive-Based Risk Sharing Agricultural Lending (NIRSAL) – a new innovative mechanism targeted at de-risking lending to the agricultural sector.

    He further said there is also the Growth Enhancement Support Scheme (GESS) which represents a policy and pragmatic shift within the existing Fertilizer Market Stabilisation Programme. It provides series of incentives to encourage the critical actors in the fertilizer value chain to work together in order to improve productivity, household food security and income of the farmer.

    There is also the Staple Crops Processing Zones which involves the establishment of commodity marketing corporations around each of the agricultural commodities. There is also the Central Bank of Nigeria’s single digit loans which also caters for SMEs in the agricultural sector. I believe all the government needs to do more is simply communicate more on what it is doing in the sector.

    Also, the bank has a way of selling Nigeria to the international community, a disposition that can help attract global investments. For example, Sekibo recently called for stronger partnership between Nigeria and Russia for technological and infrastructural development. He made the call at the sidelines of the just concluded 2019 Annual Meetings of the African Export-Import Bank (Afreximbank) in Moscow, Russia, noting that Africa and Nigeria in particular have a lot to learn from the Russian Federation.

    He said:  “If we carefully listen to the Minister of Foreign Affairs of the Russian Federation, Sergey Lavrov, he said the Russian investment in Africa had increased over the years to almost $20 billion in 2018. This clearly shows Africa and Nigeria especially need to key into these investments and get the best out of it. What we are seeing in Russia today is a testimony that they are giants in several areas of development and Nigeria has a lot to learn and gain and learn from them. Today Nigeria suffers from huge infrastructural deficit and a lot could be achieved from other countries of the world including Russia.

    “Russia is advanced in technology and in mining and I feel such cooperation with them will help Nigeria harness its mineral resources. We have huge mineral resources deposit in a lot of states in Nigeria and we can tap from the wealth of experience of Russia either in training of geologists or mining practices”.

    Also speaking on the importance of Nigeria being part of African Free Trade Area Agreement, (AfCFTA) Sekibo, according to a newspaper report, said it is important for Nigeria to quickly join forces with other African countries on this agreement being the biggest economy in Africa.

    He put it this way: “Nigeria today is seen as the Big Brother when it comes to the economy and African trade and we cannot shy away from such agreement. Such agreements give access to big markets and improved competitions among the member countries. I feel strongly that Nigeria has a lot to gain if AFCFTA is signed. I also believe if it is properly leveraged on, it will do us better as a nation.”

    Having achieved all the above, what are those factors that make the bank “tick” and able to cope with competition in the banking sector?

    Sekibo explained: “We provide innovative services. To us, innovation isn’t only about creating something new, it is also about taking something that exists and transforming it into something bigger and better. As a new entrant to the banking sector, our edge is that we are starting from where our competitors stopped while being able to avoid all the mistakes they made along the way. Having imbibed a culture of continuous innovation, I am confident of Heritage Bank’s ability to adapt to envisaged customer and sector changes.”

    Not a bank to rest on its oars, but in the habit of breaking new grounds, the bank’s MD Sekibo, explained: “Our plans for Heritage Bank are unfolding. It is a gradual process. With the acquisition of Enterprise Bank Limited, Heritage Bank is now a bigger and better bank. One of our major strategies is to work with our partners to grow their business and take them to the stock market. As a service organization in the business of banking, we must be in the stock market ourselves for us to achieve this feat. That is our direction.”

    And for the success of the MD himself, he told The Nation newspaper that his tools for success are people and good processes, most importantly, people, because people drive the processes. He added: “I believe that success is largely hinged on people who have been able to key into my vision, believing in such vision and turning it into a common goal. They are people who invested their time, efforts, ideas and energy in the business. They are people equipped with good business processes, and benefiting from lasting support from partnerships built over time.”

    Heritage Bank has come a long way. In 2012, the core investor, IEI Plc, through IEI Investments Limited, acquired the Societe Generale Bank of Nigeria (SGBN) license from the Central Bank of Nigeria (CBN). Having fulfilled all required criteria, the bank returned 100 per cent of existing SGBN account holders’ money to their owners. Heritage Bank Plc is a large financial services provider in Nigeria. Currently licensed as a national bank, it offers banking and financial services in the country, including the South, West, Southeast and the North. Its shareholders’ equity is worth at least $88 million (N25 billion), the minimum capital requirement by the Central Bank of Nigeria (CBN), for national banks.

     

     

     

  • Group seeks funding of the National Strategic Health Plan II

    Stakeholders have admonished the Federal and state governments to fund, implement and ensure accountability of the second National Strategic Health Development Plan to achieve the Universal Health Coverage (UHC).

    At a news conference to mark the UHC day in Abuja, stakeholders noted that for Nigeria to achieve universal health coverage, it is imperative that all tiers of government fund the plan.

    The first universal health coverage day was held in 2014. The 2018 theme is: “Unite for Universal Health Coverage: Now is the Time for Collective Action”.

    Leader of the group and Co-chair of the Open Government Partnership (OGP) in Kano State, Hajiya Halima Ben Umar, said since December 12, 2012, the United Nations (UN) unanimously affirmed universal health coverage as an important pillar of sustainable development, urging countries, civil society and international organisations to make it part of the development agenda.

    The stakeholders lauded the Federal, state and local governments for investing in the health sector despite the economic challenges, and said the hree tiers of government must fund the second National Strategic Health Development Plan (NSHDP II) and ensure accountability in its implementation to achieve universal health coverage in Nigeria.

    “Prior to the global movement of UHC, Nigeria developed health policies and structures, such as the first National Strategic Health Development Plan (NSHDP-I) and the National Health Insurance Scheme (NHIS), to increase access to healthcare, but despite these structures, the country was unable to achieve the objective of ensuring that every citizen has access to healthcare,” the group lamented.

    The group explained that according to Nigeria’s National Health Account of 2014, for every N1,000 spent on health, about N700 is out-of-pocket expenditure, a situation that is driving millions of Nigerians into poverty and denying them basic healthcare. The group added that the meagre investment is further compounded by the delay or non-release of funds appropriated.

    “The coalition believes that if these barriers are removed by fully funding, implementing and ensuring accountability of the NSHDP-II, every Nigerian will have access to affordable and quality health care,” it added.

  • ‘Funding, non-implementation of new rate affecting pension growth’

    The pension fund keeps rising, hitting N8.23 trillion in May. But its contribution to the gross domestic product (GDP) is five per cent. Why is this so? According to National Pension Commission (PenCom) Acting Director-General Mrs Aisha Dahir, inadequate funding of retirement benefits in the public sector, non-implementation of the new rate of pension contributions, among others, are hampering the system’s growth. Omobola Tolu-Kusimo met her.

    Despite the achievements of the Contributory Pension Scheme (CPS), the informal sector and the self-employed have not been captured in the scheme. What are your plans for them?

    The Pension Reform Act under Section 2(3) provides that employees of organisations with less than three employees as well as self-employed persons shall be entitled to participate in the Contributory Pension Scheme in accordance with guidelines of the Commission. The  employees referred to under Section 2(3) of Pension Reform Act 2014 are not covered by any pension scheme due to the nature of their employment; therefore, the Commission considered it necessary to develop the Micro Pension Plan to cover these employees.

    The Micro Pension Plan is an arrangement for the provision of pension to the self-employed and persons in the informal sector through the Contributory Pension Scheme.  This means that traders, stylists, farmers as well as self-employed professionals, such as accountants, architects, lawyers, and artisans, can contribute to having pension after retirement. Some features of the Micro Pension Plan are Flexible registration, Simplified registration process. Contributors can register with a PFA of their choice, Flexible modes and rates of contributions.Withdrawal of pension benefits will be flexible. The Commission is yet to roll out the Micro Pension plan because it wants to ensure that it provides a policy that will ensure that the needed flexibility is put in place for these persons; contributors get optimal return on investment; and the protection of the rights of contributors.

    The Commission has released the draft guidelines and framework on the Micro Pension Plan to the Licensed Pension Operators and the various stakeholders. Feedback from the stakeholders and operators have been received, considered and incorporated. The final guidelines for the Micro Pension Plan(MPP) will be released as soon as they are approved. Meanwhile, the Commission is developing the required ICT infrastructure to drive the process and this is critical to the success of the Micro Pension Plan. It is envisaged that before the year ends, the plan will commence.

     What is the cause of delay in opening transfer window despite the clamour by contributors/retirees to have an opportunity to change their PFA.?

    The Commission has developed the guidelines for the Retirement Savings Account (RSA) Transfer. However, to operationalise them, a number of initiatives would have to be implemented to ensure its successful implementation.The clean-up of the records and biometric identification of the existing contributors to remove multiple RSA registrations are essential. In addition, the necessary ICT infrastructure to drive the process is also being developed. These initiatives are at an advanced stage of completion. It is envisaged that, all things being equal, the Transfer Window would become operational before the end of the year.

    Do you think availability of transfer window will boost customer service delivery under the CPS?

    Yes, the availability of transfer window will go a long way in addressing the issue of poor service delivery in the pension industry. Contributors will have the liberty of moving from one PFA to another, if they are not satisfied with the services being provided by their PFAs. The transfer window will make the industry become very competitive; the operators will come up with many innovations to attract and retain customers in the market. The transfer window will, no doubt, make the operators to improve their service and strive for excellence.

    What is the value of pension fund assets and what are its effects on contributors and the economy?

    The CPS has consistently accumulated pension assets since inception. It is noteworthy that the value of pension fund assets had grown from N265 billion in 2006 (which was the year of actual commencement of investment by the pension operators) to N8.23 trillion as at June 30, 2018.

    As at April 2018, the total number of registered RSAs stood at 8.02 million with the public sector (comprising federal and state government employees) and the private sector accounting for 3.53 million and 4.49 million.

    There are complaints that pension payout is low under the CPS compared to the DBS. How are you addressing this?

    Pension payment under the Contributory Pension Scheme (CPS) is dependent on the total RSA balance at retirement. The monthly pension is also a factor of the lump sum collected. If the lump sum is too large, the monthly pension is reduced appropriately. One can also boost his/her RSA balance by subscribing to voluntary contributions. This would allow contributors to make additional monthly contributions over and above the statutory rate of eight per cent. The employer may also wish to make additional contributions over and above the statutory 10 per cent for its employees. Recently, the Commission introduced pension enhancement for retirees under the programme withdrawal. This initiative which took effect from December 2017 provides an opportunity for monthly pensions to be enhanced due to income generated by PFAs on the investment of the retiree assets.

    PenCom has released guidelines on the Multi-Fund Structure. What are the objectives and how will they affect the growth of pension fund?

    The new RSA Multi-Fund Structure involves the creation of multiple Retirement Savings Account (RSA) Funds, with assets allocation, made to fit into the different demographic (age) profiles and risk appetites of registered Contributors i.e. Young, Middle-age and retirees.

    The new structure would ensure that contributions of an RSA holder are invested in assets/securities with risks profile compatible with his/her age. For instance, it is expected that young contributors who have longer working years and relatively higher risk appetites would desire more investments in variable income instruments (e.g. Quoted Equities, Private Equity, Real Estate, and Infrastructure Fund/Bonds). On the other hand, middle-aged contributors or retirees who are risk averse, would prefer fixed income investments, with more stable streams of income. Consequently, the implementation of the Multi-Fund Structure will result to increase returns due to aggressive investments and, ultimately, growth of the pension funds.

    What does this mean to contributors and retirees?

    A major benefit of the introduction of the Multi-Fund Structure is that the contributions are invested  optimally to achieve enhanced retirement benefits. For example, younger contributors may prefer a pension fund with a higher level of risk and expected return to increase the expected value of their pension at retirement, while older contributors or already retired, may prefer a low risk fund to minimise the likelihood of a reduction in the value of their pension.

    Non-remittance of pensions by the public and private sectors seems to be eroding the objective of PRA 2014. What are you doing to solve  the problem?

    The Commission has adopted the strategy of employing Recovery Agents to recover unremitted contributions, including interest penalty from defaulting employers in the private sector. The activities of the Recovery Agents from inception in 2012 to date has led to the recovery of N14.38 billion made up of N7.42 billion and N6.96 billion as pension contributions and interest penalty.

    There was a cut of over N3 billion from the amount budgeted to offset backlog of pension benefits to retirees under the CPS by the National Assembly. How will this affect the Commission’s plan and what you are doing about it?

    The effect of the budget cut will further compound the payment of outstanding accrued rights benefits due to the retirees of the Treasury Funded Ministries, Departments and Agencies (MDAs). As at today, there is an outstanding arrears for retirees from May 2017. The Commission would continue to engage all the relevant stakeholders, such as the National Assembly, the Presidency, Budget Office as well as the Federal Ministry of Finance to ensure that all the accrued rights and other pension liabilities are paid. We are also aware that efforts are being made to accommodate the outstanding liability in the supplementary budget to bring succour to teeming FGN retirees who are waiting for the payment of their retirement benefits.

    Accrued rights is a major issue hindering pension payment  to the Federal Government’s workers? What are you doing baout it?

    Accrued rights is that part of the pension benefits due to employees who were under any retirement scheme, prior to the adoption of the Contributory Pension Scheme(CPS). The outstanding amount for FGN employees has been communicated to the government and in previous times, what was appropriated was short of the amount advised. This is one of the reasons for the delay. But we are confident that money will be released to defray this liability. Last year, N54 billion was released when there was some intervention by the Federal Government. My appeal is for retirees to bear with us. These are liabilities from the government and government is trying. As mentioned earlier, we are engaging all the relevant stakeholders. The government has the will and it has been shown by the release of the N54 billion. Definitely, we are hopeful that as we mount pressure and there is good intention as already demonstrated, this liability will be cleared soon.

    About 25 state governments are yet to implement the CPS, leaving their pension system in disarray. What are you doing to enforce the PRA 2014?

    You would recall that the Pension Reform Act 2004 did not initially mandate states and socal governments to adopt the Contributory Pension Scheme (CPS). However, with its re-enactment in 2014, state and local governments were mandated to adopt the CPS. Accordingly, the Commission had relentlessly pursued the engagement of states between March 2016 and July 2017 and had engaged key government officials and Labour Unions in all the states. As a result, 26 states and the FCT have made significant efforts towards implementation of the CPS, nine states are at the bill stage of implementation while only one state has not taken any significant step in this direction.  It is, however, imperative to point out that many of the critical stakeholders in the states are yet to grasp the tenets of the CPS and how state governments can achieve full compliance.

    It is worthy to note that individual states are developing at varying phases based on the resources available to them. However, we are of the view that the CPS would be fully implemented in all the states once there is the necessary political will from the governors.

    What are the challenges facing  the Commission in the execution of its oversight function?

    The two major challenges in the implemention of the CPS are one, inadequate funding of retirement benefits.

    The portion of the Federal Government’s total wage bill being set aside for the settlement of accrued pension rights of its employees that migrated to the CPS from the Defined Benefits Scheme remains inadequate. Furthermore, there are delays in the release of funds into the Retirement Benefits Bond Redemption Fund (RBBRF) Account with the Central Bank of Nigeria by the Federal Government. Consequently, FGN retirees are not being paid their retirement benefits promptly. In April 2017, Mr. President approved the release of N54 billion for the payment of part of the outstanding accrued pension rights. There were also subsequent monthly releases of funds for the purpose. However, there are still outstanding payments for retirees from April 2017 to date.

    The second problem is inadequate funding of retirement benefits.

    The rate of pension contribution was increased by Section 4(1) of the PRA 2014 from a minimum of 15 percent to 18 percent, comprising eight percent by the employee and 10 percent by the employer.  However, despite having come into effect since July 2014 when the PRA 2014 was enacted. These enhanced rates of pension contributions are yet to be implemented by the Federal Government for its employees.

    The contribution of Pension Funds to the GDP is five per cent. This is low compared to other countries, particularly South Africa. How can this be improved upon?

    The Contributory Pension Scheme (CPS) has facilitated a pool of pension funds, which have consistently accumulated to over N8trillion as at May 2018. As you  rightly noted, there are enormous potential for growth of the pension funds to account for a significant proportion of the GDP. Indeed, the Commission’s ongoing strategy implementation aims to attain an increase in the ratio of pension funds to GDP to at least 10 per cent by 2019. The specific measures planned to achieve this include, firstly, the expansion of coverage of the CPS to the underserved economic sectors through Micro Pension and renewed enforcement of compliance. Our objective in this direction is to attain at least 20 million contributors by 2019. Secondly, we seek to grow the assets through more investments in variable income instruments that generate higher returns. To achieve this, we commenced implementation of the Multi-Fund Structure in July 2018, which segregates the funds based on the risk profile of contributors and gives them an opportunity to choose subject to age parameters. Furthermore, the increase in contribution rates in the PRA 2014 from a total of 15 per cent to 18 per cent comprising 10 per cent by employer and eight per  cent by the employee would also increase the size of pension funds when fully implemented for Treasury Funded Federal Government of Nigeria MDAs. The Commission has also intensified efforts at ensuring the payment of all outstanding pension liabilities including accrued pension rights and pension increases that are yet to be implemented.

    What are your plans for the industry?

    In addition to the various measures at growing the size of pension fund assets highlighted above, the Commission is leading efforts at attaining excellence in service delivery in the pension industry. The industry is already leveraging information technology to deliver better services to the contributors and retirees. The Pension Fund Administrators have been expanding their branch networks to ease customer interface, while the Commission has been operating its zonal offices in each of the six geo-political zones of the country. We are also intensifying efforts at ensuring the adoption and implementation of the CPS by all the states. Other measures in1clude a wider public enlightenment and education of the CPS to attract more participation.

     

     

  • ‘Cutting N14.5b from EEG, funding for infrastructure disappointing’

    The signing into law of the 2018 Appropriation Bill by President Muhammadu Buhari has elicited mixed reactions from stakeholders. While some urge the executive and legislative arms to sheathe their swords to move the country forward, others say the budget may not fulfil its aspirations as it might be bogged down by politicking, report Lucas Ajanaku, Emeka Ugwuanyi, Chikodi Okereocha, Okwy Iroegbu-Chikezie Collins Nweze, Akinola Ajibade and Toba Agboola.

    Varied reactions have greeted the signing of the 2018 Budget by President Muhammadu Buhari.

    The President, Manufacturer’s Association of Nigeria (MAN), Dr Frank Udemba Jacobs, voiced his reservation as it relates to the cutting of the provisions for Export Expansion Grant (EEG).

    He  described the cutting  of N14.5 billion  from the Special Economic Zones/Industrial Parks, which are key industrialization initiatives  of the current administration as  unfortunate.

    He said: “It’s not only counterproductive and inimical to the economic diversification policy of this administration but suggests that NASS did not fully understand the importance of those items on the growth of manufactured products export or were ill-advised. For many years, MAN had advocated for the reinstatement of the EEG, which was suspended in 2014, because it is critical to enabling manufacturers to produce for export and thus contribute to the foreign exchange earning of the country”.

    According to Mr. President, “the provisions for some nationally/regionally strategic infrastructure projects such as Counter-part funding for the Mambilla Power Plant, Second Niger Bridge/ancillary roads, the East-West Road, Bonny-Bodo Road, Lagos-Ibadan Expressway and Itakpe-Ajaokuta Rail Project were cut by an aggregate of 11.5billion Naira”.

    Jacob said that MAN frowns at the cut in the critical infrastructure provisions at this time when the country is confronted with dearth of basic infrastructure which has rendered our products globally uncompetitive.

    He explained that they had expected more funds to be appropriated and also advocated for public private partnership to augment government appropriations in this regard.

    Generally we are disappointed by the action of the National Assembly specifically as it concerns our observations he added.

    To the Director General, Lagos chamber of Commerce & Industry , Mr. Muda Yusuf the challenges of the budgeting process have become a recurring decimal and quite regrettable.  According to him the story has been the same since 1999, he called for an end to it.

    He said: “We need to put an end to this situation.  First, we need to clarify some constitutional issues with regards to the boundaries of authority and responsibilities of the executive and the national assembly on the budgeting process.  This will require an urgent interpretation of the relevant sections of the constitution.  It is a matter that requires the urgent intervention of the judiciary to clarify.  We need to know for instance whether the National Assembly has the powers to undertake the kind of alterations that was done to the 2018 budget”.

    He also stated that it is difficult to find justifications for the magnitude and character of the changes that was done and the decision to introduce federal character principle into the budgeting process,  noting that this kind of mindset is surely not in the long-term interest of the country and the economy.  According to him strategic projects need to be recognized and accorded the right priority in the budget irrespective of the geopolitical location.  He argued that It is in the overall interest of the national economy to do so.  A national budget is not meant to address micro level issues; it is typically focused on big programmes and projects with impactful systemic effects he added.

    Furthermore, he said that there is a need to improve on the timing of budget preparations, timeframe for the consideration by the national assembly and assent by the President. According to him there should be statutory timelines for this purpose in order to bring some discipline to the process.  He further advised on a better communication between the national Assembly and the Executive.

    National President, the Nigeria Chamber of Commerce, Industry, Mines and Agriculture, Iyalode Alaba Lawson criticized the delay in the  passage of the 2018 budget into law insisting that it is neither good for the economy or our nation’s developmental aspirations for inclusive growth and sustainable development.

    According to her It is particularly not helpful to the Private Sector which government has acknowledged as the engine of growth and development of the economy.

    She said: “While we acknowledge the statutory role of the Legislature in reviewing the budget presented by the Executive, we counsel that these projects be reconsidered for approval as soon as Mr. President presents the supplementary budget to the legislature as promised in his speech. We wish to use this opportunity to reaffirm the need for the Legislature and Executive to devise consultative mechanisms that will ensure quick passage and accent of the yearly budget which is a veritable guide to business operators to plan their yearly activities.

    It is a serious concern for the Organised private Sector (OPS) that critical areas of Health, Security and Infrastructure was tampered by the National Assembly we urge for a quick redress  she added.

    Furthermore, Alaba –Lawson counseled heads of Ministries, Departments and Agencies of Government to swing into action for the implementation of the budget to make up for time already lost in the 2018 budget year.

    The Chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Gbenga Adebayo, said it is good that the budget has been signed after all, saying the inadequacies notwithstanding, ‘the country and economy have to move forward. So I think the president did the right thing’ by assenting to the budget.

    Speaking on the expected impact of the budget on the telecoms sector, Adebayo said the sector operates within the larger economy. By this very fact, he said when there is development on the other sectors of the economy, the telecoms sector would be affected.

    “Provided there is movement in other sectors of the economy our industry by extension will also move forward,” he said.

    Adebayo said since the passage of the budget was unnecessarily delayed, the executive arm of the government must waste no time but move to full implementation so that the economy would breathe fresh air. “My advice to the Federal Government is to move speedily towards budget implementation to achieve the best they can within the short time to year end,” Adebayo said.

    The President, Oil & Gas Trainers’ Association of Nigeria (OGTAN), Dr. MayowaAfe, said: “Nigerians have talked so much about the faulty fiscal planning and budget delays over the years. As a country, we must endeavour to operate a January-to-December budget timeline as obtainable all over the world. To sign the budget for 2018 fiscal year in late June of the same year is absolutely unwholesome. The timeline is very late.

    “The Executive arm of the government should try and submit the budget proposals of each year to the National Assembly in September. For instance, budget proposals for 2019 should be submitted to the National Assembly in September 2018. This will enable the National Assembly enough time to work on it.  Also the National Assembly needs to work harder to ensure the budget is ready before end of December so it would be able to perform its duty as a budget for economic growth.

    “The entire world runs a January-to-December budget and Nigeria’s own must not be an exception. We must run our budget in line with international acceptable standard. The continued passage of budget by end of first half of the year shuts out a lot of investments from the country. How can an investor work with a budget signed in June for operation in the same year?

    “The late signing of budget every year has a lot of negative implication for our image as a country. The outside doesn’t take us serious-minded nation and this perception is taking a grave toll on not just the oil and gas industry but the economy at large.

    “If the budget is to operate from June 2018 to June 2019, the National Assembly should, therefore, call it budget 2018/19 and not 2018 budget.”

    On the increase of budget oil benchmark to $50.5 per barrel, Afe said the increase is in order and sustainable. Buttressing his reason, Afe said the lingering conflict between Iran and the United States, issues in the Middle East, among others will keep oil prices above $60 per barrel. According to him, Iran’s production is rising to three million barrels per day, if US goes ahead to slam sanction on Iran, all American oil companies will cease to operate there and this means drop in supply to the global oil market.

    Minister of Budget and National Planning, Udoma Udo Udoma, said Nigeria’s journey out of the recent economic recession has helped us reset our priorities and to focus more on reforms and activities that have both short- and long-term bearings on sustainable economic growth.

    “In line with the Economic Recovery and Growth Plan (ERGP), we are seeking to optimise derivable benefits from oil by restructuring our equity in JV oil assets while we intensify our efforts at accelerating economic diversification and non-oil revenue generation. Already, diversification efforts are yielding positive results with significant growth in the non-oil sector,” he said.

    Continuing, Udoma, said government will continue to create the enabling environment for private sector to increase their investment and contribute significantly to job creation and economic growth.

    “The goal of the 2018 budget is to consolidate the gains recorded so far by this Administration, and ensure that all Nigerians benefit from the economic progress.

    He said the 2018 budget is designed to consolidate on the achievements of the 2016 budget of change and the 2017 Budget of Recovery & Growth, and advance delivery of the goals of Nigeria’s Economic Recovery and Growth Plan (ERGP) 2017 to 2020.

    Udoma said the 2018 Budget proposal seeks to continue the reflationary policies of the 2016 and 2017 Budgets which helped put the economy back on the path of growth.

    “Thus, we plan to continue to spend more on ongoing infrastructure projects that have potentials for job creation and inclusive growth; We will continue to leverage private capital and counterpart funding for the delivery of infrastructure projects. As with 2016 and 2017 budgets, the 2018 budget has been prepared on the Zero Based Budget (ZBB) Principles,” he said.

    Also speaking, former Central Bank of Nigeria (CBN) Deputy Governor, Kingsley Moghalu, said: “On signing the 2018 appropriation bill into law, yesterday, at the Presidential Villa in Abuja, President Muhammadu Buhari immediately relaunched the blame game that has delayed the budget for six months. President Buhari expressed concerns over the alterations made by the National Assembly to the appropriation bill before passing it. Buhari said the alterations will make the budget difficult to implement”.

    According to Moghalu, the National Assembly alluded to its “constitutional power of appropriation,” which empowers it to alter the budget proposal submitted to it by the President. “The National Assembly also blames the executive for late submission of the 2018 budget and cited the failure of heads of MDAs to defend their budgets before the lawmakers on time. This blame game smack of lack of leadership to make the budgetary process efficient and effective in serving the people of Nigeria,” he said.

    “At the root of Buhari’s complaint is the putative “constitutional power of appropriation” claimed by the National Assembly;we believe the executive should lay the controversy to rest by seeking judicial interpretation of the 1999 Constitution (as amended), on the power of the National Assembly to alter the yearly appropriation bill. If the power is legally valid, then effective collaboration between the executive and the legislature on the yearly budgets becomes imperative,” he added.

     

     

    The Buhari administration has glossed over this judicial solution to, once and for all, solve the perennial problem of “budget padding.” The administration is instead relying on its trusted propaganda machinery, which entails blaming everyone else but itself and leaving Nigerian people un-served or underserved with fiscal policy.

    The 2018 budget has seen the continuation with the longer-term dislocation of fiscal policy by the Buhari administration. In 2016, Buhari launched a streak of expansionary budgeting, fuelled by excessive debt. From a budget of N4.4 trillion in 2015, the budget rose sharply to N6.06 trillion in 2016, N7.4 trillion in 2017, and N9.12 trillion in 2018. On signing the latest budget, the President announced his plan for a supplementary budget in 2018. In just three years, the budget has more than doubled.

    Also reacting to the budget, the President, Association of Telecoms Companies of Nigeria (ATCON), OlusolaTeniola, lamented that the 2018 budget demonstrates the incapability of government to further fund and spend on much the needed infrastructure projects like power and information communication technology (ICT) and other essential items without reducing the recurrent expenditure to a level that reflects greater efficiencies in the way governance is run in the country. It also reflects a reality that the government’s diversification programme is slowing down or in doubt. “The fact that many projects were extracted out and replaced with National Assembly projects demonstrates a problem in what exactly is going to be implemented in 2018 and early 2019 to support this diversification,” he said.

    He said Buhari needs to address his concerns with the legislature and other stakeholders in the polity to ensure that any gaps that exist are rectified in a manner that benefits the citizens of the country. The fact that differences exists is not a problem, he said, adding that area that needs to be really addressed is transparency and relevancy of projects that both sides of the government seek as priority within the remaining term of the administration.

    On the impact of the budget, he lamented that it doesn’t prioritise ICT let alone telecoms.”So this budget will only indirectly impact the telecoms sector, when the government removes the 38 different taxes and levies being applied to the sector to fund government spending. Government also needs to address the leakages in the 2018 budget, as the current taxes contributed by the telecoms sector alone per year is more than N450billion a year and this is not reflected properly in their revenue line – this highlights a problem with accountability within government and short changes the effort that the industry plays in the nation’s economic development,” Teniola said.

    He saidcollaboration is not only key between the executive arm of government but also with legislature, the private sector  and civic society in ensuring that this budget delivers the dividends to each citizen and more importantly that the private sector has the much needed funds that government seeks to deliver on its promises. However, he said this can only be harnessed when government provides an enabling environment and a level of accountability as to how taxes are collected and spent to provide the basics to its citizens. The recurring expenditure is one line item that speaks to that, it needs to be reduced and not increased going forward.

    Former Rivers State Chairman, Trade Union Congress (TUC) of Nigeria, Comrade Chika Onuegbu, said there is no reason to be optimistic that the 2018 budget will impact on the economy and Nigerians.

    Describing the signing of the N9.12 trillion 2018 budget into law by Buhari as belated, Onuegbu said the budget, which came on the eve of the kick off of the political process for the 2019 elections, has cast doubt over the possibility of the budget making any significant impacts.

    The trade unionist, who is also the past National Industrial Officer of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), predicted that with the budget coming nine months to the 2019 elections, the capital expenditure component of the budget may not achieve 40 per cent performance.

    “From the next quarter, primaries will commence for next year elections, so when will the political class seat down to implement the capital aspect of the budget,” Onuegbu asked rhetorically.

    He said what matters is budget performance, which is the percentage of implementation of the budget, not necessarily what is in the budget.

    He regretted that consistently Nigeria’s budgets have been passed very late, making the implementation of its capital component extremely difficult. He blamed this on what he called “governance challenges.”

    This, according to him, was responsible for why the executive and the legislature, despite being under the same ruling All Progressives Congress (APC), were not on the same page in respect of the 2018 budget.

    Nigeria Labour Congress (NLC) has said National Assembly acted in their own interest and not in the interest of the Nigerians.

    Reacting to the allegation by the President that the National Assembly reduced some of the vital project and replaced it with their own, NLC Secretary General, Comrade Peter Oso-Ezon said: “What the lawmakers did is not in the interest of the Nigerians and the people they represents. They acted in their own selfish interest. This is very bad for the nation and the economy. They were put there to serve the interest of their people, but unfortunately, they did not.”

    He said there is nothing wrong for the lawmakers to go through the budget and make amendment, saying that this is their primary assignment.

    “We are not saying that they should not amend the budget. Infact it is their primary assignment . There should be check and balance.However, looking at the budget critically, the amendment they made did not reflect the national interest.

    “The President has grudgingly signed it. This is not good enough. Both the Executive and the lawmakers are supposed to look into it together again, but because of the delay, they could not,” he said.

    The Chief Executive Officer,  Association of Nigerian Electricity Distributors(ANED), AzuObiaya however saidit would be premature for ANED to comment on the budget, that has not been scrutinised or analysed.  However, he prayed that the budget is well implemented by the Federal Government as relates to critical sectors such as oil, power among others, which he said are the barometer s that measurethe performance of the economy.

    He said ANED and other stakeholders in the value chain would be happy to see the budget correcting some misalignments that exist in the electricity value chain.

    He said the available transmission capacity in the industry is not enough to wheel the quantum of power generated by the power generation companies(GenCos), adding that it would be a good thing if there provisions for such activities in the budget.  He said customers, who are at the end of the value chain would be happy when the DisCos are able to share the energy wheeled by the Transmission Company of Nigeria (TCN).

    South-West Chairman, Independent Petroleum Marketers Association of Nigeria (IPMAN), AlhajiDebOAkande,said he is yet to study the 2018 budget. He urged the government to ensure that there is no mismatch in the growth recorded in the nation’s oil industry with that of the global oil industry, arguing that the purpose of consolidating the gains which the industry recorded in 2017 would be defeated, if such things happen

     

     

     

  • AfDB grant: SMEDAN strengthens funding, capacity for MSMEs

    The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has secured a grant from the African Development Bank (AfDB) to conduct feasibility studies on all the 23 Industrial Development Centres (IDCs) preparatory to their upgrade and conversion to Micro, Small and Medium Enterprises (MSMEs) cluster parks. The Bank of Industry (BoI) is also supporting the MSMEs under the SMEDAN coverage with funding to enable operators add benefits to the economy, writes COLLINS NWEZE.

    Capital is one of the most important factors needed to drive sustainable growth of Micro, Small and Medium Enterprises (MSMEs). That explains why Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has secured grant from the African Development Bank (AfDB) to conduct a feasibility study on all the 23 Industrial Development Centres (IDCs) preparatory to their upgrade and conversion to Micro Small and Medium Enterprises (MSMEs) cluster parks.

    The study, which is sponsored by a grant of approximately $600,000 or N183 million, secured from the middle income country technical assistance fund of AfDB, is the first to be granted to the Ministry of Industry, Trade and Investment/SMEDAN to encourage and improve sustainable entrepreneurial development specifically targeted at SMEs in the country.

    The centres were established in the 60s and 70s to provide middle level manpower in woodwork and metalwork to local industries. They were subsequently transferred to the agency for proper attention.

    The underlying objective of the project was to establish Common Infrastructure Facility Centres that would resolve some of the challenges faced by Small and Medium Enterprises (SMEs) with particular regard to accessing work space and common amenities like internet access, water, power, roads among others. The facility is projected to improve the global competiveness of SMEs, by reducing overhead costs and enjoying economies of scale as is usually the case with clusters.

    SMEDAN Director-General, Dikko Radda said the agency has considered turning the industrial Development Centres (IDCs) to industrial clusters to address work space problem for Micro, Small and Medium Enterprises (MSMEs) and promote economics of scale derivable from the agglomeration of critical mass of enterprises.

    So far, SMEDAN has secured a grant from the African Development Bank (AfDB) to conduct a feasibility study on all the 23 IDCs preparatory to their upgrade and conversion to MSMEs cluster parks.

    “Small businesses are spread all over the country and reaching out to them to provide solutions to their needs may be a daunting task to achieve. This is so obvious because services required by them are not provided by one agency. For instance, while skill acquisition is the prerogative of IITF, managerial skill is for SMEDAN whereas finance is the role of institutions like Bank of Industry,” Radda said.

    “To address the problem, a clinic was established, called the MSME clinic. In the team are all the various stakeholders, SMEDAN, Corporate Affairs Commission, Bank of Industry,  Standard Organisation of Nigeria (SON), among others. The clinic is domiciled in the office of the Vice President while SMEDAN provides the secretariat. The team tours the country under the leadership of the Vice President, Yemi Osinbajo, to meet with SMEs and discuss their problems with them. Each member of the team takes its turn to provide solution to the array of challenges confronting the business owners. Problems are diagnosed and solutions proffered,” he added.

    Continuing, he said accreditation is another important pillar in sanitising the MSME sub sector. “Business Development Service Providers (BDSPs) are many and varied in scope. Some BDSPs have national coverage, some regional and some state. One of the most important role they play is loan facilitation and other business development support services. Consequently, institutions such as SMEDAN and BOI have partnered them to provide trainings and loans to MSME. This important role underscores the need to accredit them through a recognised and acceptable institutional framework that will bring credibility to bear on their analysis and recommendations.  SMEDAN has established the accreditation framework for the BDSPs,” he said.

    A Lagos lawyer, Moses Adike,  said “ensuring that BDSPs provide standard service to MSMEs has been on the front burner for some time now”.

    SMEDAN has achieved some milestones in the establishment of the framework for accrediting the BDSPs in partnership with the Department for International Development (DFID). The project has a complementary component – The Credit Information Portal. The portal when deployed, would provide information to MSMEs towards accessing credit. MSMEs can now access reliable information for their credit needs from various financial institutions.

    Radda has recognised the need to boost SMEs operations by putting in place strong measures that confront these challenges facing the sector. From the implementation of the One Local Government, One Product (OLOP) Programme, National Enterprise Development Programme (NEDEP), establishment of the SME Rating Agency of Nigeria, credit information portal, ICT development to implementation of the nationwide MSMEs clinic to mention but a few, SMEDAN is helping the Federal Government to realise its vision of improving the economy and lives of the citizenry.

    To support the agency to carry out these reforms and innovations, Radda is seeking for amendment of the Act that established the agency. The idea is to re-position it to accomplish its mandate.

    The process, which originated as a follow up to resolutions taken at the maiden Management Retreat of the agency since coming to office some two years ago, has scaled through the first and second readings at the National Assembly. When passed into law, it would provide the right ammunition to fight the obstacles in its path to success.

    Radda said SMEDAN will continue to strive for excellence and strategic growth through forming strong partnerships with reputable public and private institutions. This is in order to build an all-inclusive and conducive business-to-business and access to market environment.

     

  • Reps pledge improved funding to tackle human trafficking

    The House of Representatives has pledged to improve funding to the National Agency for the Prohibition of Trafficking in Persons (NAPTIP) to enhance the fight against human trafficking in the country.

    Chairman, House of Representatives Committee on Human Rights, Edward Gyang Pwajok, said this during NAPTIP’s budget defence at the National Assembly.

    The Senate President, Dr Bukola Saraki, had pledged improved funding when he hosted NAPTIP Director-General Julie Okah-Donli.

    Speaking after a presentation by Okah-Donli, who was represented by the Director, Finance and Account, Dr Hassan Ndanusa, the lawmaker said he was impressed with the prudent utilisation of the resources allocated to the Agency in the previous year. He pointed out that the fiscal allocation to the agency was quite inadequate, considering the huge task ahead of it.

    Pwajok, who scored NAPTIP high in awareness creation, rescue and rehabilitation of victims of human trafficking and irregular migration as well as prosecution of traffickers, said NAPTIP as the Federal Government’s agency for counter- trafficking, deserved the government’s support and the private sector, hence, the need for a balanced financial stand and adequate funding of its activities.

    Similarly, the European Union (EU) delegation to Nigeria has lauded the Agency for its roles in the on-going evacuation of stranded Nigerians in Libya and assured the agency of its assistance.

    Meanwhile, Mrs Okah-Donli has advocated a customised rehabilitation package for victims of human trafficking and irregular migration across the world in other to tackle the phenomenon effectively.

    She said this while receiving a delegation from the Norwegian Ministry of Foreign Affairs and Ministry of Justice, who visited her at the NAPTIP headquarters.

    The visit was a follow up to the bilateral talks on migration-related issues, which held during the Federal Government delegation’s visit to Oslo last May.

    According to her, such package, which will be developed with input from victims and focal counter trafficking institutions, such as NAPTIP, would be implemented in accordance with the agreed modalities to ensure that victims are not re-trafficked while at the same time reduce the vulnerability of other segments of the society.

  • Don seeks funding for technical colleges

    The Head of Technical Education Department, Enugu State College of Education (Technical), Mrs. Perpetua Aniofogbu, has enjoined the government to increase the funding of technical colleges.

    She spoke yesterday in an interview with News Agency of Nigeria (NAN) in Enugu.

    Aniofogbu said if more funds were made available for technical colleges, teachers and students would be exposed to modern technologies through training.

    She said: “Our teachers need training for the impartation of knowledge to students, as this will help to acquire knowledge in technical courses.

    “Enough funding will help the colleges to do away with obsolete equipment because technical schools are in need of modern equipment to meet international standard.”

    The lecturer added that training the students in modern technology would make them to be self-employed and employers.

    “Graduates of technical education are not trained to be job seekers, but rather to be self-employed. They are expected to employ others,” she said.

  • Why banks avoid funding start-up businesses

    Why banks avoid funding start-up businesses

    Commercial banks are avoiding funding start-up businesses given the high risk associated with such transactions, Head Trade Finance and Enterprise Banking at Stanbic IBTC Bank, Babatunde Akindele, has said.

    Speaking during Stanbic IBTC Bank SME Capacity Building Series held in Lagos, he explained that private or angel investors should fund such enterprises and grow them to full capacity instead of relying on commercial banks.

    He said: “The Angel Investors are designed to fund start-ups. Banks were not designed to fund start-ups. The best we can do is impart business skills on them to enable them grow and add value to the economy. Stanbic IBTC wants to create employment, stimulate the economy and increase the impact of SMEs on the economy,” he said.

    Akindele said the essence of the capacity building is to impact skills on SMEs and enhance  their capabilities. “SMEs remain the lifeblood of any economy. The better our SMEs, the more growth we will see. The idea is to impart skills on owners of SMEs businesses. We are training SMEs operators that are both new, or have been in the business for long,” he said.

    On why it is still difficult for many SMEs to access credit, he said the operators must comply with set lending criteria.

    “All lending come with criteria. We are here to let them understand the principles of business and letting them to meet those principles. We are happy that Nigeria’s Ease of Doing Business Report released by the World Bank showed an improvement. That alone will help boost foreign direct investment to the economy, which the SMEs will benefit from,” he said.

    “SMEs are the livewire of any economy. So the idea is that the better our SMEs become, the better their impact on the economy and the more growth we will experience.

    “It is a priority and that is why we are training people who are new in the business and those who have been in the business for a while. We have different roles in the economy but impacting business skills on small and medium businesses is something we can do and it’s something we are doing right here today,” he said.

    Akindele added that the Central Bank of Nigeria (CBN) recognises that there was the need to find ways to work on interest rates for SMEs, which have given rise to a number of intervention funds like the SMEs Fund.