Manufacturers fault N275bn palliative loan delay

There are mounting concerns over a purported delay in the disbursement of the N275bn palliative loan promised to manufacturers and Micro, Small, and Medium-sized enterprises in the country.

It was gathered that the fears were due to a lack of communication from supervising agencies on the status of the programme, a development that has fuelled concerns the programme might have been cornered politicians and their cronies in government.

The PUNCH reports that while other palliatives to the state government and other groups are being distributed, the manufacturing sector is yet to enjoy the palliative scheduled to end in six months (July 2024).

The development came four months after President Bola Tinubu, in a nationwide address, promised to ease the hardships faced by businesses.

In the address, the president said he was determined to strengthen the manufacturing sector, increase its capacity to expand, and create good-paying jobs.

“We are going to spend N75bn between July 2023 and March 2024. Our objective is to fund 75 enterprises with great potential to kick-start sustainable economic growth, accelerate structural transformation, and improve productivity.

"Each of the 75 manufacturing enterprises will be able to access N1bn credit at 9 per cent per annum with a maximum of 60 months repayment for long-term loans and 12 months for working capital,” Tinubu said.

Unveiling other palliatives, Tinubu added, ‘’Our administration recognises the importance of micro, small, and medium-sized enterprises and the informal sector as drivers of growth. We are going to energise this very important sector with N125bn.

“In like manner, we will fund 100,000 MSMEs and start-ups with N75bn. Under this scheme, each enterprise promoter will be able to get between N500,000 to N1million at 9 per cent interest per annum and a repayment period of 36 months.’’

However, four months after the promise, prospective beneficiaries in separate interviews said they were in the dark about the reasons the funds had yet to be disbursed.

They also said they did know the current state of the programme and expected date of its commencement.

The President of the Association of Small Business Owners, Femi Egbesola, on Friday decried the slow pace data collation by the supervising agencies, alleging that genuine businesses were being deliberately discouraged from accessing the loans.

He said, “Well, I don’t know why it has not been disbursed. Immediately the announcement was made by the president at the national address about four months ago, we were all excited thinking succor had come somehow, somewhere. We were extremely hopeful but at the moment we have been disenfranchised because we have waited and there is no hope.

“We expected that even if the money has not been disbursed, communication should have been made to stakeholders, letting us know reasons why it hasn’t been disbursed, the current state and progress made, and the expected date to commence.

“But such information hasn’t been passed across to us. The unfortunate side of it is that when a person is sick, you need to administer drugs but if you don’t do it at the required time the person eventually dies. What would be the usefulness of the drugs yet to be administered?

“Currently, businesses are closing down and their owners are left with no means of livelihood. This is bad. We expected that this palliative should have come even before now. We are confused currently and handicapped.”

Asked if he suspected the programme had been cornered by politicians or their cronies, Egbesola said this could not be confirmed but stressed that such move could send negative signal to foreign investors and the MSMEs.

He stated, “Anything can happen but it would be too bad if a new government starts on that note. The population of the MSMEs is huge and the government should not take them for a ride.

“That would be too bad and it will send a negative signal to foreign investors about MSMEs in Nigeria and our government.”

On his part, the Director-General of the Manufacturers Association of Nigeria, Segun Kadir, indicated the loan facility is a recognition by the government of the evident gap in the credit space for manufacturing companies in Nigeria.

The DG, in a telephone interview, expressed hope that the application process would be completed soon and deserving manufacturers would benefit from the programme.

He said, “I am aware that the Government is consulting relevant stakeholders, working out the modalities for identifying the deserving sectors and effective disbursement.

“We are hopeful that the process will be concluded soon and deserving companies will get the facility, disbursed by a credible financial institution, like the Bank of Industry.”

Kadir who hinted that offers to be part of the implementation process were rebuffed, said they had no reason to indicate possible hijack by politicians.

“We have no reason to believe that it will be hijacked by politicians. We have actually offered to be part of the implementation process. We trust that the Government will demonstrate good faith and redeem the pervading government deficit trust.”

Meanwhile, the Small and Medium Enterprises Development Agency of Nigeria has constituted an assessment team to give s list out eligible applicants and pre-qualify them for the next stage.

The Director of Press for the agency said this had delayed the commencement of the programme for the SME’s.

He said, “Nothing has commenced. We are presently gathering the data of the MSMEs who may require the funds, an assessment team will look at the list of applicants to sort them and prequalify those who will go to the next stage.”