Helping The Poor To Help Themselves

Is anyone truly serious about loaning money to micro, small and medium-scale enterprises (MSMEs) in Nigeria? One year after the Central Bank of Nigeria (CBN) announced that it was making available N220billion for sharing among the very poor engaged in small businesses, the actual launch of the programme took place last Tuesday. President Jonathan said the fund would be disbursed through financial institutions and state governments “for onward lending to MSMEs”.

Just as everyone had a good laugh when then CBN governor (now Emir of Kano) Sanusi Sanusi hinted that the fund would operate as “a merit-based, incentive-based system”, the fear persists that none of the actual MSMEs will be able to access the money. The new CBN governor, Mr Godwin Emefiele, may be honest, but he will not be everywhere to supervise the disbursement of the fund.

I can bet that the N220billion has gone astray already. Here are politicians being asked to take good care of direly needed billions in an election year! It’s like asking goats to share yams among hungry children, or asking lions to look after goats. The CBN loan, even at 9 per cent, would be given to those who don’t need it. Eventually, any money made available to the banks would be shared by public “servants” and politicians seeking one office or the other in 2015. Even the microfinance banks that will get the money are likely to be fronts for some serving and retiring civil and public “servants”. We have passed this road several times before and have enough reason to be cynical this time round.

Down through the decades, such seemingly bright ideas have inspired the establishment of NERFUND, Bank of Agriculture, Bank of Industry, SMEDAN, People’s Bank, DFRRI, community, microfinance and mortgage banks. None of these has worked because most of the genuine MSMEs are run by people who cannot walk into a bank to request credit. The few that can get no chance of succeeding until they bring their grandfathers and great-grandmothers back from the dead to sign certain documents.

In the hands of honest leaders, however, N220bn could change the fortunes of millions. In fact, only N22bn could make farmers produce all the food consumed in Nigeria. Had the intention been to jump-start small businesses, the interest rate would not exceed 1 per cent. Elsewhere, such money is given as grant, not loan. In today’s Nigeria, how many genuine businesses can return 9 per cent profit? And if one makes 9 per cent as profit and has to pay the loan, it means one has been working for the banks. I know that, even with the best of intentions, no MFB will loan the fund at less than 18 per cent.

Our people can live better and longer if they could return to the communal life that existed some 50 or 60 years ago – they need to cooperate and not compete. Today, many a young man’s eye is fixed on money acquired by fair or foul means. Morality has declined. But the youth – and our communities – will not get the genuine money that lasts long and brings happiness until they learn to work as a team in productive activities. I am aware that thousands of cooperatives have been formed across Nigeria. However, they have not succeeded because their operators are not honest, especially when politics and public funds are involved.

Through cooperatives, communities would be able to achieve success in agriculture, cottage industries and other small businesses. Where young people can work together, they can be given the necessary training in crop farming and livestock farming. I say “young people” because they are the ones that should now be engaged in agriculture. Members of the older generation are either getting too old or dying out. So let those with university degrees think how they can become successful farmers. It’s of no use waiting for non-existent white-collar jobs. At the moment, it is estimated that fewer than 5 per cent of graduates land jobs five years after their NYSC; the number is sure to keep decreasing until we are forced to come back to our senses.

Only a loony person would keep hoping for a miracle when we see tertiary institutions churning out unemployable graduates and yet the industries that ought to absorb them have folded up. We have not even considered the non-graduates – the 10.5million out-of-school kids in the country, according to UNESCO; those who dropped out from or completed secondary schools; and those struggling with lowly jobs that can barely sustain them.

When we get cooperatives right, good ideas would work. For crop farming, acquisition of fertile land should be considered. The farmers should be encouraged to move to places with fertile land like Uzo-Uwani, Abakaliki, Gboko or Kafanchan. Many parts of the north are very fertile. Wheat, beans, fruit and scores of other crops are needed by small and medium-scale manufacturers. Nigerians also need fish for local consumption, not just for export. Those who are determined to work can make it, so long as seed money won’t be a problem.

A cooperative could comprise farmers interested in planting economic trees that survive easily in particular areas. In my area, palm, cashew, mango, and pear trees do well. Farming in our communities is no longer about planting yams and cocoyams alone; currently our people have discovered that yellow pepper yields more income, just as chicken, rabbit and pig farmers are getting richer than the traditional cow and goat farmers. Fish farming is known to be a money spinner, as is bee-keeping for honey.

Cottage industries would be waiting to benefit from this increased awareness of modern farming. Our people could then be trained in food processing. Palm-kernel oil and palm oil are still demanded in large quantities by producers of creams and drugs. Plantains are used to make the expensive wines imported from Europe. Palm-wine producers are now in short supply; some people can specialise in preserving it or processing it for sale in the cities. In this season of cassava bread, cassava is in high demand. Garri processing has not been abandoned. Rather than allow yams to waste, we can convert them into flour. Processing of fruit like mango, cashew, orange, grape, pineapple and water lemon is a job worth doing. Tomatoes produced in many parts of the north go to waste because nobody is willing to set up cottage industries that can use them.

A small bank formed by people who belong to the same community can loan money to these young farmers so they can hire labourers and buy seeds for cultivation on fertile land, or buy machinery for cottage industry. The best collateral that the banks may demand is each loan seeker’s ancestral land. The loan seekers or their cooperatives would be well known; it won’t be a matter of somebody bolting away with a bank’s money.

My guess is that we are now at the stage Western Europe was about 200 years ago. Forced by necessity, their men and women had to use their brains to transform their society. What followed was the industrial revolution. While our black ancestors were fiddling with charms, fortune-telling and witchcraft, the white people were using their brains to lift their people out of poverty. This hunger for improvement inspired all the inventors we have known: Alexander Bell, the Wright Brothers, Thomas Edison, Steve Jobs, Tim Berners-Lee who founded the worldwide web (www), and hundreds of others.

What have we Africans contributed to world civilisation? We have been great consumers, not producers. As a result, we spend all our resources on phones, cars, refrigerators, radio sets, TV sets, computers, clothing items, cooking pots, sweets and even toothpicks made in Western nations.

But let nobody deceive you: the economy of this country or any other import-dependent nation can never improve so long as the nation produces nothing for export. Crude oil will not develop this country because it is people from the West that extract the oil with equipment made in the West; we export crude and then import refined petroleum products because our refineries do not work. Ajaokuta Steel Mill has remained moribund for 40 years; electricity supply has remained epileptic or lacking.

With jobs disappearing, with the education system dead or dying, with youths getting frustrated in the search for jobs, spouses or the good life, I can predict the near future: they will be forced to return home – to our communities – and embrace any of these models of micro and small enterprises. Many won’t subscribe to this now; but they will, at a time they will have little choice. Textbook training should now be augmented with skills training.

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