While working with a first generation commercial bank we had a clear policy on lending to political office holders whose tenures were nearing an end, this was largely due to previous experiences where the next officials who take office query such loan advances as it often leaves the incoming administration not only an empty treasure but also due obligations to be repaid.

It is also a Nigerian truism that new administrations hardly ever want to continue projects initiated by previous administrations, as such, lenders and other categories of investors rather would wait for the next government that would have the executive powers to ensure a smooth project initiation and implementation.

I have taken the pain to start my piece with the analogy above to help put in perspective the suspicious nature of the disbursements CBN officials made out to certain State Governments/FCTA last year, this piece is essentially going to discuss the disbursements while the coming series will discuss the infractions on the guideline of the initiative in disbursing to the State Governments/ FCTA.

The 220bn MSMEDF initiative had its guideline amended in July 2014 to allow for State Governments/FCTA to access a maximum of 2bn each (rather funny decision as it places Lagos state in the same strata with Taraba state) for on-lending to MSMEs in the individual states and as at August 2015, twenty four (24) states had accessed a total of thirty nine billon, ninety eight million, one hundred and thirty thousand (N39,098.13), of greater concern to this piece is the following disbursements;

ZAMFARA STATE          MARCH 27^TH 2015 1,964.50BN

DELTA STATE                 MARCH 19^TH 2015  2BN

ABIA STATE                    MARCH 18^TH 2015  2BN

AKWA IBOM STATE      MARCH 10^TH 2015 2BN

CROSS RIVER STATE     ARPIL 10^TH 2015 1.5BN

JIGAWA STATE             MARCH 19^TH 2015 2BN

KADUNA STATE            MARCH 15^TH 2015 1BN

FCTA                               17^TH MARCH 2015 2BN

KOGI STATE                   17^TH MARCH 2015 2BN

PLATEAU STATE           MARCH 17^TH 2015 2BN

Besides Zamfara, Kogi and Kaduna states, all the other governors in the list above where due to vacate office on the 29^th of May 2015, just about two months or less  for some from when CBN officials went ahead to disburse funds to them, in the name of on-lending to MSMEs in their states.

The State Governors having run short of funds to leave offices with, quickly remembered they were still entitled to a certain 2bn each from the CBN for MSMEs and went ahead to catch in on that and our CBN officials who amongst several other responsibilities are supposed to be the watchdog of the banking system and help stop financial fraud could not smell a lassa –like infectious rat on the request of the governors who were already packing to leave the various government houses and ask them to allow the incoming governors/ FCTA minister access the fund after May 29 2015, went ahead to disburse the funds to Governors/FCT Minister who simply added it to their parting share of our national cake, or maybe the CBN officials knew it was not right but looked the other way. 

As for Kogi and Kaduna states, a rational mind would have done an assessment of the political events playing out in the states, and “keep processing the application” until after May 29^th 2015, time at which it would have been clear who would continue to be or elected Governors of the states will be, rather, the CBN officials graciously made 3bn available to both Governors for other uses except for MSMEs in both states. 

The case of Kogi is rather more pathetic, as a political economy post-graduate student I was taught amongst several things that nations/individuals relate with each other based on how they rate each other. The stories that kept emanating out of the state few months into the administration of the then Governor, Capt Wada, were a continuous stream of tales of incompetence, funds mismanagement and a host of other worrisome accusations and yet CBN officials obliged him a 2bn MSME development fund for which as at today neither the CBN officials nor the State Government can point to individuals or groups that benefitted from the funds disbursement. 

As suspicious as the disbursement to these State Governments/FCTA administration are, it is even more worrisome and sad to note that FOI request made out on the 2^nd July 2015 and 22nd SEPTMEBER 2015 have received partial responses from the bank officials while the present FCTA administration has promised to probe that which was disbursed to the it. 

The CBN officials having stalled our FOI requests for over six (6) months funnily wrote to decline our request on the grounds that we do not have rights to know how the funds were disbursed by the State Governments, even though the guideline of the initiative mandates the bank to periodically monitor projects funded by it, authenticate applications as forwarded to it by the states on behalf of MSMEs and do a periodic publication of its findings. The courts will have to help us out on this. 

Our findings indicated that CBN officials did not only contravene the guidelines in the disbursing models it adopted as against that contained in the guideline, it also helped in ensuring that whilst we have a 220bn MSMEDF initiative in principle, in reality what obtained was a 2bn “manna from the glass house to willing and game playing Governors”. 

I will be publishing the part 2 of this series next week and focus will be on the direct infractions on the guidelines of the funds in disbursing to the State Governors. Let me also remember to add that an FOI request to the almighty CBN Governor requesting for details of all funding initiatives targeting MSMEs since 1999 has been ignored even after a reminder was written and delivered.

Now if you want to also know how much CBN officials are entitled to in management expenses for the organisation of this charade called 220bn MSMEDF do come back next week and perhaps we will also see why the FOI ACT has to be amended to state that any government officials that refuses to release information and brings upon his/her MDA a legal action should personally foot the bill of the legal team representing his/her MDA.

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FEDERAL MINISTRY OF INVESTMENT, TRADE AND INDUSTRY AND MSME DEVELOPMENT. (Part 1)

While vigorously campaigning for the candidature of President Muhamadu Buhari before the elections, I held a strong conviction that his ascension to office will help clear the stench and rot oozing out badly from this ministry and some of the agencies under it, namely; Industrial Training Fund (ITF), National Directorate of Employment (NDE) and Small and Medium Enterprises Development agency (SMEDAN).

This conviction was further strengthened when I was privileged to make a presentation to a sub-committee of the then transition committee headed by Boss Mustapha, several heads nodded along in agreement to an urgent to recreate the models presently in use for the development of the MSME sub-sector of the Nigerian economy, I went home to sleep until the mosquitos from ITF, NDE and SMEDAN kept sounding familiar tunes in my ears and it became obvious that whatever insecticides the change administration is using has met a strong resistance at these agencies and am awake now, back to where I was post may 29^th 2015.

Let me give a little background to the problem I have with the ministry and some of its agencies. When then Nigerian President, Goodluck Ebere Jonathan launched the National Enterprise Development Programme (NEDEP) on Febuary 2014, it was an elaborate occasion for which several millions was written off as expense for not only organising the launch but also for consultancy  services for the production of the NEDEP project document and other related expenses.

NEDEP was premised to run on OLOP (one local government one product) model that would have given birth to the production of minimum one product per local government in Nigeria, the idea seemed a novel one until when several months after, SMEDAN that was meant to drive the initiative failed to even link several thousands of Nigerians it had trained and certified fit (several hundreds of millions is spent annually on this)  to start business enterprises  let alone create adequate awareness for it and mobilise applications from MSMEs who desperately needed funds to start-up or expand operations. 

It was however shocking when Olusgeun Aganga, then minister made an open declaration that SMEDAN had been mandated to raise fifty thousand (50,000) applications for NEDEP within 2015, a check then at bank of industry clearly showed that the fund was idle and one then wondered why that was the case, why was it difficult for SMEDAN to go back to those in had trained in all senatorial districts in the country and mobilise them to access the fund or even work with the database at their disposal.

 AND THEN CAME GEM (GROWTH AND EMPLOYEMENT PROJECT)

Having made several calls on the then minister to make NEDEP  a reality beyond just making a proclamation that SMEDAN officials have been mandated to raise fifty thousand (50,000) applications and getting no positive feedback we were then at a loss when GEM was launched by same ministry that had failed to make NEDEP work. 

The common story around town then was that the highly connected and immensely powerful SMEDAN DG hijacked the NEDEP project and took away all the juicy apples on the project and hence the angry “and hungry” guys at the ministry quickly held strategic meetings and came up with GEM which received the blessings of the then minster and today we have a NEDEP managed by SMEDAN and a GEM managed by the ministry, and one wonders what will become of GEM when all the juicy apples attached to it are finished. Will it go the way of NEDEP? 

OUR VARIOUS FOI REQUESTS AND THE MINISTRYS PRESS CONFERENCE

We had written ITF, NDE AND SMEDAN and had the minister copied on each of the separate FOI request, reason simply been that in the last administration, FOI requests relating to the activities of these agencies are simply condemned to the dustbin, SMEDAN leads the pack in doing this.

When ITF and SMEDAN refused to acknowledge and or respond to our FOI requests we were constrained to send reminders and as before, we copied the minster and yet no response in clear contravention of the provisions of the FOI ACT. We are disturbed and worried as to whether either the minister receives the requests and is not interested in having the agencies respond to them or that some people working with him are keeping the requests away from him.

When then we had of the press conference of the ministry in the morning of the day it was to be held with no details as to its venue and no invitation to same meeting, we were left dumbfounded and wondered who the ministry considers stakeholders worthy to be invited for the press conference. If an NGO with FOI request on three of your agencies bothering on their operational model, framework and deliverables is not considered a stakeholder then we wonder who is.

We will return next week with specific details of the FOI request made out to SMADAN,ITF AND NDE and our various concerns with how these agencies are presently been managed. 

OKEKE CELESTINE

INITIATIVE HEAD, MSMES ADVOCACY AND SUPPORT INITIATIVE

@okekecc @advocacy_msme