President Bola Tinubu’s N200 billion Intervention Fund Programme is a strategic initiative to boost Nigeria’s real sector, focusing on micro, small, and medium enterprises (MSMEs) and manufacturing. NIYI JACOBS writes that this program is structured into three parts: the Presidential Conditional Grant Scheme, the MSME Intervention Fund, and the Manufacturing Sector Fund. Aimed at enhancing job creation, local production, and economic resilience, this fund provides grants and low-interest loans to businesses across Nigeria. By addressing key challenges in the industrial and agricultural sectors, the initiative seeks to create a more sustainable, inclusive, and resilient economy
Nigeria’s economy, though the largest in Africa, has faced severe challenges over the past decade, frlation and a fluctuating currency to rising unemployment and low industrial output. Despite these issues, the nation boasts a vibrant consumer base and a wealth of natural resources, factors that could underpin significant economic growth if adequately leveraged. Recognizing this potential, President Tinubu’s administration has launched the N200 billion Intervention Fund Programme to address some of the core challenges facing the Nigerian economy by investing directly in the real sector, which includes agriculture, industry, and manufacturing.
The real sector serves as the backbone of any robust economy, providing jobs, stimulating local production, and reducing reliance on imports. By strengthening this sector, Tinubu’s administration aims to foster sustainable economic growth and drive job creation on a national scale.
Overview of Tinubu’s N200 Billion Intervention Fund Programme
The intervention fund is divided into three key programs:
- The Presidential Conditional Grant Scheme (PCGS)
- The FGN MSME Intervention Fund
- The FGN Manufacturing Sector Fund
Each of these initiatives targets a different segment of Nigeria’s economy, from small nano-businesses to large manufacturing enterprises, thereby creating a comprehensive approach to economic stimulus.
- Presidential Conditional Grant Scheme (PCGS): Supporting Nano-Businesses and Youth Employment
The Presidential Conditional Grant Scheme (PCGS) is the cornerstone of the intervention aimed at supporting the smallest businesses in Nigeria—often referred to as nano-businesses. With an allocation of N50 billion, the PCGS seeks to empower one million beneficiaries nationwide, each receiving a grant of N50,000. This program particularly focuses on economically disadvantaged individuals, including women and youth, providing them with the capital necessary to start or sustain their businesses.
Current Progress
As of September/October 2024, N38.8 billion has been disbursed, reaching 774,593 beneficiaries across Nigeria’s 774 Local Government Areas (LGAs) and the Federal Capital Territory. The program administration has called upon state governors to provide additional candidates, with 23 states already responding and nominating focal persons for efficient program execution.
This broad reach helps ensure that resources flow directly to underserved communities, providing vital capital for nano-businesses that typically struggle to access formal credit. The grants help such businesses overcome initial financial barriers, supporting a range of activities from agriculture and crafts to small-scale retail.
Challenges and Potential Solutions
One challenge facing the PCGS is verification. Given the large number of beneficiaries, ensuring that funds reach the intended individuals can be difficult. A more streamlined approach involving local partnerships could improve the accuracy of fund disbursement and increase accountability.
- FGN MSME Intervention Fund: Empowering Micro, Small, and Medium Enterprises
Small and Medium Enterprises (SMEs) are recognized as critical drivers of job creation and innovation. However, Nigerian SMEs face barriers, including limited access to credit, high operating costs, and infrastructure challenges. The FGN MSME Intervention Fund, valued at N75 billion, is structured to address these obstacles by offering loans of up to N1 million at a competitive interest rate of 9 percent, making borrowing more accessible for small business owners.
Progress So Far
The Federal Ministry of Industry, Trade & Investment has transferred a public database of 832,359 MSMEs to the Bank of Industry (BOI). Of these, 211,248 applicants have submitted completed information, and 932 loans have been approved for disbursement. Additionally, the National Association of Small and Medium Enterprises (NASME) and the Nigerian Association of Small-Scale Industrialists (NASSI) are actively engaged in the program to ensure members access the funding.
While the program is moving forward, there are still hurdles related to documentation and loan approval. Many applicants lack the formal documentation needed, such as business registration and financial records, which complicates the BOI’s evaluation process. The BOI has reached out to applicants with incomplete information, encouraging them to complete their applications.
Recommendations for Expanding Access
To make this intervention more effective, local and state government offices could partner with BOI to assist small businesses in gathering required documentation. Additionally, financial literacy programs for MSME owners would enhance their understanding of formal financial processes, thereby increasing the number of qualified applicants.
- FGN Manufacturing Sector Fund: Catalyzing Industrial Growth
Aimed at stimulating large-scale manufacturing, the FGN Manufacturing Sector Fund allocates up to N1 billion per business, supporting companies that can drive productivity in key sectors. With an initial allocation of N75 billion, this fund focuses on companies that have the potential to produce goods for domestic and export markets.
Implementation Update
The program has already approved loans totaling N78.5 billion for 143 manufacturing companies, with disbursements ongoing. As of late September 2024, N6.3 billion had been released to eight companies, while 23 other projects valued at N9.1 billion were in various stages of disbursement. This fund prioritizes manufacturing sectors spread across Nigeria’s regions, including the North Central, North East, North West, South East, South West, and South-South.
By funding manufacturing companies, the program not only generates employment but also strengthens the local supply chain, potentially reducing Nigeria’s reliance on imports. However, some companies still face challenges meeting the prerequisites for loan disbursement, including compliance with tax regulations and proof of production capacity.
Ensuring Accountability and Efficiency
To address these challenges, the BOI has coordinated with the Manufacturers Association of Nigeria (MAN) to verify the legitimacy of each applicant. Such collaboration ensures that funds go to genuine manufacturing operations rather than speculators, which boosts the credibility of the intervention fund.
Broad Economic Impact: Job Creation, Local Production, and Economic Stability
If effectively implemented, the N200 billion intervention fund could help stabilize the Nigerian economy in several ways:
- Job Creation and Youth Employment
With millions of new jobs generated through micro-enterprises, SMEs, and manufacturing, the program is poised to reduce unemployment levels, particularly among youth. - Boosting Local Production and Reducing Imports
Incentivizing manufacturing will enable Nigeria to produce more locally consumed goods, reducing dependency on imports and bolstering the economy by retaining capital within the country. - Promoting Financial Inclusion
Through the conditional grants and low-interest loans, the intervention fund encourages individuals and businesses to participate in the formal economy. By working with the BOI and local banks, more people can be introduced to formal financial services, fostering a more inclusive financial ecosystem.
Conclusion: A Vision for Nigeria’s Economic Revival
President Tinubu’s N200 billion intervention fund represents a significant step toward reviving Nigeria’s real sector. By supporting businesses from nano-enterprises to large manufacturers, the program addresses multiple facets of Nigeria’s economic challenges, from job creation to boosting local production. While challenges remain—such as verifying beneficiaries and ensuring that all eligible applicants meet the funding requirements—the collaborative approach involving local authorities, BOI, NASME, and MAN suggests a strong framework for implementation.
As the program progresses, it will be crucial for the government to maintain transparency, streamline application processes, and provide ongoing support to beneficiaries. With these measures in place, the intervention fund could become a cornerstone of Nigeria’s economic resilience and growth, creating a more productive, self-sufficient economy that better meets the needs of its citizens
