BY BLAISE UDUNZE
For over a decade, the Nigerian authorities and its {financial} establishments have launched a flurry of intervention funds, all with the promise to empower industries, revive the manufacturing sector, and raise tens of millions of micro, small, and medium enterprises (MSMEs) out of economic drought. From agriculture to aviation, from inventive industries to export promotion, these funds have been designed as catalysts for inclusive development and job creation.
But in the present day, the story reads like a tragic irony. Trillions of naira later, there’s little influence to indicate. Factories stay underutilized, MSMEs wrestle to outlive, and unemployment continues to soar. The rot runs deeply entrenched corruption, politicization, poor monitoring, and widespread mortgage defaults have turned what ought to have been Nigeria’s {economic} lifeline right into a cautionary story of mismanagement and missed alternatives.
The Central Bank of Nigeria (CBN) and the Bank of Industry (BOI) have, over time, spearheaded a number of intervention programmes. In 2013, the N220 billion MSME Development Fund (MSMEDF) was launched to empower small companies, with a particular 60 p.c allocation for ladies. Yet, greater than a decade later, hundreds of real entrepreneurs say they by no means accessed the fund, whereas others query the transparency of disbursement. The Anchor Borrowers’ Programme (ABP), launched in 2015, aimed to hyperlink smallholder farmers to processors and was hailed as a masterstroke for agricultural self-sufficiency. Over N1 trillion reportedly flowed into the scheme. But the dream quickly dimmed with ghost beneficiaries, political interference, and poor mortgage restoration uncovered a programme riddled with abuse.
Similarly, the Agri-Business/Small and Medium Enterprises Investment Scheme (AGSMEIS), a CBN-backed initiative pooling 5 p.c of banks’ revenue after tax, started as a noble effort to stimulate SMEs. However, its later years have been marred by disbursement bottlenecks and allegations of insider favoritism. Commercial banks and a few designated {financial} establishments, as a substitute of appearing as facilitators, grew to become gatekeepers of corruption. Bribes, favoritism, and infinite paperwork grew to become the norm. Funds meant for productive ventures have been typically redirected to political allies or misapplied by the very establishments entrusted with disbursement.
Rather than empowering Nigeria’s actual financial system, intervention loans too typically empowered a community of insiders who noticed the programmes as avenues for rent-seeking. The impenetrability of those schemes made them handy channels for political reward and institutional looting. Once the funds go away authorities coffers, monitoring them turns into an train in futility. There aren’t any dependable public databases exhibiting who acquired what, how a lot was repaid, or what influence was achieved.
The rot just isn’t confined to agriculture. The Creative Industry Financing Initiative (CIFI), launched in 2019 to nurture Nigeria’s leisure and digital sectors, grew to become mired in controversy over opaque choice and restricted attain. The Real Sector Support Facility (RSSF) and the Textile Sector Intervention Fund, meant to spice up manufacturing and revive the textile trade, additionally suffered from weak monitoring and low reimbursement self-discipline. During the pandemic, the N400 billion COVID-19 Targeted Credit Facility (TCF) was touted as a lifeline for households and small companies. Administered by NIRSAL Microfinance Bank, it sparked hope amongst struggling entrepreneurs, however quickly, the acquainted patterns emerged as linked elites acquired the funds, whereas real candidates have been locked out.
Official knowledge reveals that the CBN has disbursed over N10.3 trillion throughout numerous interventions in lower than a decade with an unprecedented scale of funding. When mixed with BOI-managed programmes such because the Government Enterprise and Empowerment Programme (GEEP) and the Export Expansion Facility Programme (EEFP), whole earmarked intervention funds seemingly exceed N12 trillion. Yet, Nigeria’s industrial contribution to GDP stays beneath 10 p.c, and MSMEs with the supposed beneficiaries proceed to wrestle with excessive prices, poor infrastructure, and restricted credit score entry.
Over the years, quite a few intervention funds have been launched to assist industries and MSMEs from the N220 billion MSME Development Fund and N300 billion Real Sector Support Facility to the N200 billion SME Restructuring and Refinancing Fund. However, poor administration, corruption, and diversion have undermined these initiatives. A 2023 report by the Auditor-General revealed that billions of naira from these schemes have been both unaccounted for or misapplied, with funds channeled by business banks that prioritized revenue over influence.
For occasion, the CBN’s N220 billion MSME Development Fund has solely seen about N83 billion disbursed over seven years. The Survival Fund, although lauded in precept, has delivered roughly N67.5 billion to over 1.25 million beneficiaries, together with instances the place mobilisation charges have been collected however items or providers by no means adopted. An N5 billion SME mortgage fund by SMEDAN and Sterling Bank noticed solely N250 million truly attain enterprise house owners. Even in interventions like BOI’s N75 billion Manufacturing Sector Fund, lower than a 3rd had been disbursed to producers, with many purposes nonetheless awaiting approval. These examples converse to not shortage of funds, however to failures in administration, accountability, and entry.
The value of Nigeria’s failed intervention programmes goes past wasted billions; it has crippled the very sectors they have been designed to rescue. Thousands of promising small companies are left stranded with out entry to reasonably priced credit score, whereas producers proceed to wrestle with out of date gear, erratic energy provide, and prohibitive rates of interest. Instead of catalyzing development, these funds have deepened dependency, inspired corruption, and distorted the credit score market.
The result’s a stunted industrial base, the place innovation and growth are sacrificed on the altar of forms and greed. Many entrepreneurs who might have scaled manufacturing or entered export markets have shut down beneath the load of unmet guarantees. Jobs that would have been created stay mere statistics in coverage paperwork, whereas Nigeria’s ambition to diversify its financial system past oil continues to falter.
In the continued investigation into the Central Bank of Nigeria’s actions, information reviews have uncovered that scrutiny could lengthen to Chief Executive Officers and senior administration personnel of assorted banks. The investigation seeks to look at potential discrepancies associated to the administration of intervention funds by deposit cash banks. This revelation follows reviews that the CBN could be compelled to withdraw its launched audited annual {financial} reviews after investigators uncovered irregularities and inconsistencies.
This unfolding probe, led by Special Investigator Jim Obazee, who was appointed by President Bola Tinubu in July 2023 as this mark one of the crucial complete {financial} examinations in Nigeria’s historical past. Obazee’s mandate extends past the CBN to incorporate different Government Business Entities (GBEs), with the aim of plugging {financial} leaks and holding corrupt people accountable. According to the Secretary to the Government of the Federation, George Akume, the forthcoming audit report will make clear governance failures which have lengthy crippled Nigeria’s {financial} system.
One key revelation entails intervention funds totaling N1.27 trillion reportedly held within the accounts of 5 main banks: Access Bank, Fidelity Bank, Guaranty Trust Bank, United Bank for Africa, and Zenith Bank. These funds cowl numerous CBN lending schemes, together with the Commercial Agriculture Credit Scheme, Real Sector Support Facility, and state bailouts. Access Bank alone held about N530 billion in intervention funds, whereas Fidelity Bank retained roughly N310 billion.
Several banks have additionally been discovered to carry undisbursed funds from the CBN earmarked for programmes just like the Anchor Borrowers’ Scheme and the Commercial Agriculture Credit Scheme. As of June 2023, Guaranty Trust Holding Company, Wema Bank, and Sterling Financial Holdings collectively held N114 billion in Anchor Borrowers’ funds, whereas seven banks, together with UBA, Access, Zenith, and Fidelity, retained N94 billion from the agriculture credit score scheme.
As the investigation progresses, {bank} executives have been anticipated to be summoned for questioning. The revelations underscore the depth of systemic dysfunction, the place funds meant for improvement sit idle or are diverted, whereas small companies gasp for credit score.
Amid the turbulence, the newly appointed CBN Governor Olayemi Cardoso known as for a radical shift within the {bank}’s position. During his Senate screening, he emphasised the necessity to refocus the CBN on its core mandate of financial stability slightly than direct improvement finance. Cardoso warned that the CBN’s historic foray into fiscal interventions had blurred institutional boundaries and undermined credibility. His plan is to transition the {bank} towards a extra restricted advisory position, one which helps {economic} development with out entangling itself in politically pushed lending.
This reorientation is well timed. As of October 2022, practically 10 trillion had already been disbursed as intervention funds, a lot of it tied to agriculture and small enterprise assist. Yet controversies over beneficiary choice, reimbursement defaults, and restricted influence persist. Experts have urged a full-scale audit and restructuring of those programmes, recommending that future interventions be channeled by related ministries and companies, not the CBN to make sure correct oversight and influence measurement.
Before the subsequent bailout or restoration initiative is launched, each the CBN and BOI should clear home. This means full public disclosure of all beneficiaries, correct audits of previous disbursements, and the restoration of misapplied or stolen funds. The impenetrability that has shielded corruption for years should give solution to transparency, backed by digital monitoring methods and citizen oversight.
Beyond cleaning their books, these establishments should additionally rethink their method. Development finance ought to not be routed by rent-seeking business banks that revenue with out producing influence. Instead, direct digital lending platforms, strict eligibility verification, and measurable influence monitoring ought to outline the brand new mannequin.
Nigeria’s intervention programmes should endure radical reform anchored on transparency, expertise, and traceability. Every fund ought to have a publicly accessible portal itemizing disbursements, beneficiaries, and reimbursement standing. Periodic audits which can be independently verified have to be necessary, not non-obligatory. Beyond {financial} engineering, Nigeria should repair the enabling surroundings for constant energy provide, logistics, safety, and regulatory stability that makes enterprise development potential.
The surprising rot in Nigeria’s intervention programmes is not only a {financial} scandal; it’s a betrayal of nationwide belief. Trillions have been poured into schemes that promised jobs and prosperity, but delivered little past paperwork and propaganda. Unless Nigeria cleans up the system, imposing accountability and rewarding real productiveness, its intervention funds will proceed to fund failure, not progress.
Blaise, a journalist and PR skilled writes from Lagos, may be reached by way of: [email protected]
