• Friday, March 29, 2024
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How Nigeria loses billions to MSME intervention programmes

MSMES

Recent report by the Sustainable Entrepreneurship and Economic Development Initiative (SEEDi) shows that Nigeria has lost over $1 billion (N306 billion) to corruption in MSME intervention programmes within the last four years.

The report entitled, ‘Stolen Dreams: How Corruption Negates Government Assistance to Nigeria’s Small Businesses’ states that money lost over the four-year period exceeds the country’s capital expenditure on health and education combined within the same period.

“MSME-related corruption has siphoned over $1 billion from Nigerian state coffers between 2014 and 2018,” Celestine Okeke, lead partner SEEDi, said during the presentation of the key findings of the report in Abuja recently.

“Corruption is endemic within the Nigerian government agencies meant to help MSMEs. Relative to their high cost, these agencies programmes appear to help very few actual small businesses.

“The agencies are set up to fail – eroding trust in government and functioning as conduits for embezzlement, contact fraud, deliberate waste and distribution of patronage,” Okeke, who is also a co-author of the report, said.

He stated that mismanagement within the various agencies to help MSMEs is inflicting a lasting damage and the opportunity cost on the sector that employs 84 percent of the Nigerian workforce and contributes 50 percent to GDP is high.

He called on the Federal Government to redefine how it provided support for MSMEs, noting that if the government fails to do this, money budgeted to grow entrepreneurship will continue to go down the drain without any reasonable results.

“The government needs to look for ways to improve the youths and create opportunities for them to create jobs for themselves,” he further said.

He called on the government to invest such funds in providing key infrastructural such as roads, rail and adequate power supply as well as address issues of overregulation’s to make it easier for struggling businesses to stay afloat.

The report, which was funded by the Carnegie Endowment for International Peace and Open Society Initiative for West Africa (OSIWA), gave a case study, citing South Africa and called on the Nigerian government to learn from it.

“Unlike Nigeria, the South African government programmes set up to assist MSMEs do not appear to have been captured by kleptocratic political elites intent of using them as mechanism for enriching themselves and distributing patronage,” the report states.

Joseph Amenaghawon, programme coordinator of OSIWA, while speaking on the corruption within the MSMEs sector, said that there are incidents of corruption in the schemes government have created to support small business operators in the country.

Amenaghawon called on the government to make use of the report as a spotlight to investigate further if the corruption cases with the agencies are true

“In the report an investigation was carried out in the Trader Moni as Wuse Market in Abuja and it was discovered that only very few beneficiaries were actually traders while the larger population where either civil servants or people who were not traders,” he said.

Abiodun Ihebuzor, chairman, Nigerian Association of Small and Medium Enterprises (NASME), Abuja chapter, said that the operating systems and institutions are corrupt while calling for the need of a paradigm shift in the sector.

 

Josephine Okojie