The Federal Government and state governments have expressed concerns about the rate of unemployment and depth of hunger in the country. The need to provide alternative measures to contain this unpleasant situation and pursue genuine economic revival is almost becoming a national emergency.
A recent report by the National Bureau of Statistics showed that the country’s unemployment rate jumped from 12.1 per cent in the first quarter of 2016 to 13.3 per cent at the end of the second quarter. The unemployed or underemployed figure, according to the report, also increased from 24.4 million at the end of the first quarter to 26.06 million persons.
Oil, Nigeria’s economic backbone is now quite unreliable as lull in the sector, compounded by consistent fluctuation in the price of the product in the international market have compounded the financial situation of almost all the states. Most of the state governors in the country are now incapable of meeting obligations to their workers, even after several attempts to remove ‘ghost workers’ from their payrolls. Despite the bailouts given by the Federal Government to solve this problem since the inception of the current administration, many states are still struggling to keep afloat.
The Vice President, Prof. Yemi Osinbajo, recently disclosed that about 110 million Nigerians were still living below poverty line. As expected, reactions that followed depicted the depth of policy failure to which the nation may have been subjected by successive governments. Osinbajo however expressed concerns about formulating and implementing policies that will have direct impact on the people
Already, the federal government has fully embraced the diversification option, promoting agriculture, solid minerals and the ICT sectors as alternative candidates. It is therefore imperative for state governments to ride on the platform made available by the operational mandate of the Bank of Industry, BOI, to stimulate the desired economic diversification into these sectors.
The bank’s mandate is to provide financial assistance for the establishment of large, medium and small projects; expansion, diversification and modernization of existing enterprises; and rehabilitation of ailing industries. BOI’s activities include project identification and selection; resource mobilization and financing on long, short and equity terms. It also includes industrial policy formulation, business development, support and advocacy towards improving the effectiveness and efficiency of the local entrepreneurs through reduction in initial set-up costs, taxation, timing and cost of obtaining consent to mortgage as well as obtaining land for business.
In carrying out these mandates, the bank renders support to business that add value to local raw materials on the concept of value chain development, thereby generating employment for the youths and the unemployed; creating wealth and stimulating export.
The bank has collaborated with many local and international development organizations and some states governments towards achieving its mandate.
Presently, 20 out of the 36 states have signed up to boost micro, small and medium enterprises by committing matching funds to enable them benefit from the varieties of services available on the BoI’s template. Katsina and Sokoto have committed N2 billion each. Abia, Anambra, Delta, Kaduna, Ogun, Oyo and Ondo states have earmarked N1 billion each.
Taraba has committed N630 million, followed by Niger with N600 million; Cross River, Edo, Gombe, Kano, Kogi, Kwara and Osun have also staked N500 million as matching fund, while Enugu and Ekiti have thrown in N283.6 million and N200 million respectively.
Between 2014 and March, 2015, the bank provided loans in excess of N18 billion to industrialize the South-West geopolitical zone, out of which over 80 firms and micro enterprises in Oyo state benefitted over N10 billion.
If states are committed to the vision to create jobs and find potent alternatives to the depleting earnings from oil, governors should consider the need to stimulate the small and medium scale enterprises in their states. This is a quicker and sustainable avenue to add value to natural resources, boost entrepreneurship and drastically reduce unemployment, especially among women and the young people. Doing this would engender feasible earnings, less volatility and restiveness through quick economic revival.
Recently, BoI launched a N10 billion Youths Entrepreneurship Support, YES, project to empower youths with loans to start their business. Minister for Industry, Trade and Investment, Dr Okechukwu Enelamah, said more than 40 percent of Nigerian graduates had no jobs from an average of eight million citizens that join the labour job market annually.
The ‘YES’ project of BoI was part of the Federal Government youths’ employment scheme, a platform from which about 36,000 jobs are expected to be created annually. The scheme is exceptionally friendly as participants could access loan up to N10 million with single digit interest rate over three to five years re-payment tenure.
Among many of such interventions, the BoI, in cooperation with the Federal Ministry of Agriculture and Rural Development in 2014, unveiled the N5billion Cottage Agro Processing Fund.