Why The COVID-19 Stimulus Package May Not Get To The Intended Beneficiaries- APC Youth Member in Kaduna
A young politician and a member of the ruling All Progressive Congress (APC), Alh. Musaddiq Mustapha while speaking to Universal Reporters on the CBN COVID-19 stimulus package said the package may not get to its intended beneficiaries considering the strict conditions laid by the Central Bank of Nigeria before anyone can access the fund.
Musaddiq said the 50 billion naira CBN COVID-19 intervention fund currently being disbursed through NIRSAL micro finance bank is a laudable intervention program, but for the informal sector to have access to the fund there’s need for the federal government to create awareness for easy access to the package and facilitate the process so as to reach the real targets.
He said targeted credit facility is designed to support households and Micro, Small and Medium Enterprises (MSMEs) affected by the COVID-19 pandemic.
According to Musaddiq, here is an intervention program conceived with the best of intentions, yet may not reach its target population, looking at the MSMEs intervention, it is designed to target existing enterprises with verifiable evidence of business activities adversely affected as a result of the COVID-19 pandemic. It has 3 products:
1- Mini SME (3-10 million)
2- SME (10-15 million)
3- SME plus (15-25 million)
The Nigerian Informal Sector is a major contributor to the Nigerian economy, accounting for a significant portion of employment and national GDP.
In Nigeria most of our economic activities happen in the informal sector and at a micro level, they are conducted with little or no access to financial institutions, hence the lack of information and data about these activities. According to the IMF, the Nigerian informal sector accounted for 65% of Nigeria’s 2017 GDP. These multi sectoral economic agents are expected to be worst hit by the pandemic said Musaddiq Mustapha.
He therefore, it’s Sad that, the targets may not benefit from the 50 billion naira stimulus package to support households and Micro, Small and Medium Enterprises (MSMEs) affected by the COVID-19 pandemic.
These economic agents do not fall under any of the three categories of products doled out by CBN neither do they meet the stringent criteria for accessing the targeted credit facilities.
They also lack basic ICT skills, which will surely hinder them from accessing the facility since you have to apply through the NIRSAL micro finance bank website.
I am of the opinion that NIRSAL micro finance bank should roll out a Micro SME product (1-3million) under its targeted credit facilities for COVID-19, specifically for the informal sector and simplify the terms, conditions and eligibility criteria.
This will ensure a bottom-up approach for a COVID-19 stimulus package that will cover the entire economy.