New report casts doubt over future funding for small businesses in Nigeria

Over $1 billion has been lost to Micro, Small, and Medium Enterprises-related corruption in the last five years, a new report has shown. Most of the corruption-prone schemes include constituency projects and the Central Bank of Nigeria (CBN) development fund.

According to the report titled “Stolen Dreams: How Corruption Negates Governments Assistance to Nigeria’s Small Businesses”, it was disclosed that this discovery could negatively impact the government’s support for MSME development in Nigeria.

The report was recently unveiled in Abuja, along with another report titled “State of Youth Unemployment” in Nigeria. The Stolen Dreams report covered MSME activities from 2014 to 2018.

Why this matter: According to the Lead Partner of Sustainable Entrepreneurship and Economic Development Initiative (SEEDi), Mr. Celestine Okeke, the $1 billion that was lost to MSME-related corruption within a four-year period, exceeded Nigeria’s combined capital expenditure on health and education during the same period.

Also, the more capital the Federal Government losses to MSMEs-related corrupt, they more it is discouraged from making further disbursement and prompting conscious funding of the sector. As a result, many legitimate small business owners would be denied access to the fund they need to grow their businesses.

Corruption-prone schemes: The report outlined some corruption-prone Nigerian Government MSME spending, including the N156 billion ($433.3 million) for constituency projects from 2016 to 2018, N39 billion ($236.4 million) CBN development fund for MSMEs, N10 billion ($27.8 million) cassava bread initiative and N153 billion ($4.3 million) NDE programme.

The report was supported by the Open Society Initiative for West Africa (OSIWA)

What is OSIWA? The Group is a West African organisation which promotes democratic values. It works through a unique combination of grantmaking, advocacy, partnership building, and technical assistance. The group supports the production of publications and research studies; run advocacy campaigns.

Today we supported @OpenFundingNG to launched its latest report “Stolen Dreams: How Corruption Negates Governments Assistance to Nigeria’s Small Businesses” published in collaboration with @CarnegieEndow

— OSIWA (@OSIWA1) May 22, 2019

How corrupt individuals succeed: The report stated that Nigerian officials use populist, private sector-friendly rhetoric to justify new MSME assistance programmes, even though such schemes nothing but a drain on public finances. Corruption and mismanagement typically negate the intended impacts of such schemes.

There’s a problem: Okeke stated that the anti-corruption agencies have shown little interest in investigating the increasing rate of corruption. This means that the amount lost so far is likely to increase and individuals like the civil servants, unscrupulous business people, legislators, and some presidential appointees would go on preventing the realisation of dreams; no thanks to their corrupt activities.

According to Okeke, there’s a need for more transparent implementation of these funds in order to actualise the intended objectives for small businesses.

Source: Nairamatrics

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