CBN to Unveil Scheme to Support One Million Young Graduates in 2016

CBN HQ_16

 

The Central Bank of Nigeria (CBN) has said it is contemplating to unveil a programme through which it would support young graduates that are operators of micro, small and medium scale enterprises (MSMEs) at concessionary pricing in 2016.
This is just as the Minister of Finance, Mrs. Kemi Adeosun, said the federal government would soon go to the debt market to raise fund in order to finance its capital expenditure.
Also, Governor of Lagos State, Mr. Akinwunmi Ambode, said the state would soon create an Employment Trust Fund, through which its youths and entrepreneurs, particularly in the social enterprise sector, would be supported with start-up funds.
He said the government would commit N25 billion in the next three years to the fund, at three per cent interest rate.
CBN Governor, Mr. Godwin Ifeanyi Emefiele, who disclosed in a speech he presented in Lagos, at the opening ceremony of the seventh annual Bankers’ Committee retreat titled: ‘Creating an Enabling Environment for SMEs,’ yesterday, said the initiative would target one million young graduates that are entrepreneurs.
The CBN governor who said the modality for the programme would be unveiled in the next few weeks, stressed the need to tackle youth unemployment.
According to Emefiele, the country needed to get more people engaged positive.
He also called for the support of commercial banks, other financial institutions in order to make the programme successful.
He also clarified that the programme would be completely different from the N220 billion MSMEs development fund that had been launched by the central bank.
The CBN governor explained: “I am saying if you (the banks) refuse to support, your money that we would have released through the cash reserve requirements (CRR), we will take money and lend it through any channel that will give these young graduates jobs. We all need to think together and agree because there is no need to release the money to you (the banks) and all you do with the money is buy treasury bills. That cannot continue! We need to agitate our minds; we need to think about the best ways to diversify this economy away from oil.
“We need to get more and more people to be employed and we would need the support of the banks to begin to see how we can lower our risk acceptance criteria to give support to our young graduates. These are young people, let us not assume that they will take a loan and not pay. We need to develop a scheme that will work where they take a loan and they pay.”
He pointed out that the drop in commodity prices was a major thing that had affected the Nigerian economy, with a significant drop in revenue and serious pressure on the nation’s external reserves. What that does, according to Emefiele, was that as a nation, all stakeholders need come together “and see what we can do to shield ourselves.
“So, we need to do whatever we can to protect the economy,” he added.
The Ministers of Power, Housing and Works; Finance, Planning, Solid Minerals, Agriculture would all be at the meeting to discuss with the bankers on how to lift the economy.
The CBN governor said the nation had entered a phase where it must prioritise MSMEs to growth the economy.
Furthermore, Emefiele said: “I must say that the Nigerian banking sector has not played active part in supporting the SMEs, but this is not without reasons. We had issues in the past where people take loans and don’t pay. SMEs are seen as drivers of growth in any economy.

Nigeria has 37 million MSMEs. The CBN has a N220 billion MSMEs facility. We have used various approaches to stimulate the lending of SMEs through that fund and I must confess that we are not doing enough on that because only less than half of that fund has been disbursed today. There is a reason for that.”
Continuing, Adeosun, who noted that the country’s debt-to-GDP ratio was still low, which gives its some space to run a deficit budget, pointed out that there was need for “some fiscal house-keeping” in the country.
“We need to borrow in order to stimulate the economy. But the significant challenge will have to do with recurrent expenditure. If you look at recurrent it is still high. So, if we continue in that trajectory every penny we borrow will go to recurrent. So a lot of initiatives are all about how we would contain recurrent.
“So, we know where we are going and it is very important to inform you that we are going to borrow and you (the bank CEOs) are the people we are going to get money from. So, I need to let you know that we would be raising money, but we want to make sure that such borrowings go into capital expenditure that would stimulate the economy.
“Never mind, I do believe that Nigeria can overcome its challenges. I am not here to paint a rosy picture, but I believe it is going to be tough and we need to take tough decisions. But I also believe we have the resilience and space to do that,” the finance minister explained.
Speaking further, Governor Ambode, urged the banks to do much more than they are currently doing in terms of giving special attention to the capital requirement of SMEs.
“The Lagos State government is mindful of these challenges and we are taking steps to support young entrepreneurs to create wealth and generate employment. We would soon complete the legislative process of inaugurating our Employment Trust Fund. This is going to be more like an intervention fund for which we believe the interest we are going to charge will not be more than three per cent.
“This is to checkmate the negative effect of the growing youth population in Lagos. We have over 21 million people in Lagos and the population is still rising and two-third of the people that live in Lagos are below the age of 35. The economic indicators for a monolithic economy such as ours appear unpredictable. For us as a government, we see it as a defining moment for diversification and innovation,” the governor added.

(THISDAY)
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s