About a year ago, at the 7th annual Micro, Small and Medium Enterprises finance conference and D-8 workshop on micro-finance in Abuja, the Central Bank of Nigeria (CBN) formally launched the much awaited MSME Development Fund, which would disburse N200 billion, at interest rate of no more than nine per cent per annum, to microfinance banks for on-lending to the micro, small and "mum and dad" businesses in the country.
Disbursement could not start, we were made to understand, because the all-powerful finance and economy minister insisted she was not "properly briefed". Perhaps because elections are just round the corner, or because the new CBN governor is better at "briefing" Okonjo-Iweala, things seem to have been resolved. Mid-last month, President Jonathan started disbursement. "The enormity of the task ahead demands immediate and dedicated action, that is why I am starting today the disbursement of the N220billion MSME development fund to participating financial institutions and state governments for onward lending to MSMEs across the country" he said, as he went ahead to start with his favourite part of the country by presenting cheques of, first, N500 million to Governor Emmanuel Uduaghan of Delta, then N260 million to his Akwa Ibom counterpart, Godswill Akpabio, as their states' share of the fund. The Managing Director of LAPO Microfinance Bank Limited of Benin, Mr Godwin Ehigiamusoe, got N100 million while one woman, wrapped up in opaque hijab and said to be a representative of Grassroots Micro-Finance Limited, got N9.9 million. I guess the rest of the country would get their share when they are ready, or after voting for the "winning" party.
That the whole show was a PDP affair was obvious from the absence of people like Rotimi Amaechi, Babatunde Fashola, Rabi'u Kwankwaso and others from states with a sizeable number of micro-finance outfits. Maybe, they did not qualify to get a kobo. Babangida Aliyu of Niger State was there, but he came back empty, despite his long-winded supportive speech in which he praised the president for giving the nation a CBN governor that not only "leaves politics to politicians" but one whom, in addition, does not lecture them on inflation. According to Aliyu, we now have "a people's governor" at the CBN; as if any central banker can even claim to be one if he ignores the danger of inflation! How can any banker survive if he or she lends money at single digit and gets back money worth less than the value of what was loaned out if inflation gets higher than, or equals, the interest rates charged?
More to the point: are these amounts given out really in accordance with laid out procedures and guidelines? Unless there are new guidelines that we are privy to, the existing ones state that if you are a "unit" micro-finance outfit, your authorized share capital is N20 million. If you have a state-wide license, it is N100 million. For those with a nation-wide license, it is N1 billion. You can borrow up to 50 percent of this paid-up equity from the fund. Even if LAPO has a license covering the whole of Edo State, it should only be entitled to not more than N50 million. In any case, why give some specific states hundreds of millions, and ignore others? Did they beat all others in making bankable submissions or do they have more MFBs? Should the CBN not disburse what it intends to allocate to states through existing banks, as per the original plan? Is this money, given directly to states, going to be disbursed from "Government House"? Are we not falling into the same trap of attempting to "alleviate" poverty or create jobs through dolling out money only to political thugs and party supporters?
Sanusi Lamido Sanusi was "too political", we are told, because he spoke out too much and too often. Now, he is an Emir and may not have the freedom to embarrass the government or get too "political." But, is politicizing a national programme to enable SMEs get proper funding less of a political "crime"? The new CBN governor should beware of crude, partisan adventures and leave the politics to politicians. They will use him and dump him. By all means he should be a "development" focused central banker. But then, so was SLS. But he should not ignore inflation; high inflation could push interest and exchange rates up, whether anybody likes it or not. Clearly, the funding of 2015 elections promises to test the CBN to the limit on this matter.
Incidentally, at no time during the whole ceremony, or in any of the speeches or vote of thanks was the name of the former CBN governor even mentioned. Not even a passing acknowledgement, despite helping to give birth to the whole scheme. Not even by CBN, obviously Oga would not have found it funny. Surely this is a lesson for the new helmsmen, if they care to reflect.
MasterCard branded "national" e-ID Card, for everything?
Last Thursday, President Jonathan launched the National Electronic Identification Card. This must be the umpteenth time that a National ID document is being launched or introduced, and we hope it would be the last. To my mind, the real achievement was launching of the National Identification Number, last October. Like the US Social Security Number this should provide a single reference for managing and authenticating our identity as envisaged by NIMC Act No. 23, of 2007. A National e-ID card, if properly handled, could be an important milestone in the rollout of the National Identity Management System. My fear is that too much could be loaded onto it such that it is crippled before it even takes off. The card now being handed out is said to be not only a means of certifying one's identity, but also a personal database repository and, according to the officials, an ATM and payment card as well! One report even claims that it is to replace voter's card, driving license, and what not.
This over-ambitious intent risks jeopardizing everything. We should learn to walk before we enrol for a pentathlon. There are enough problems with our ATM and payment systems as they exist now. We also need to separate driving license from other types of cards. (Don't we have to pass a test anymore?) What is important is that all cards should also carry a person's National Identification Number as an integral part. As we build a National Database along with the communication infrastructure to check and authenticate these, we can then move forward appropriately. But then this is a time of hyper claims and exaggerated notions of our management capabilities, and I doubt anybody will listen. One thing bothers me most, however: why is the card branded by Master Card? Do we need some foreign company to authenticate that we are who we say we are? So every time we give birth to another child we have to pay some foreign company royalties for using its' logo to authenticate that he or she is really a Nigerian? Have we really sunk this low?