The Nigerian government has announced the launch of a comprehensive N200 billion Presidential Intervention Fund to support Micro, Small and Medium Enterprises (MSMEs) as well as the manufacturing sector across the country.
This landmark initiative is a testament to the government’s commitment to empowering the MSME and manufacturing sectors, which are recognized as the backbone of the Nigerian economy. The fund is strategically divided into three key components, each designed to address the unique needs and challenges faced by these vital business segments.
Presidential Conditional Grant Scheme (PCGS)
The first component of this initiative is the N50 billion Presidential Conditional Grant Scheme (PCGS), which aims to empower eligible nano businesses. Nano businesses are enterprises that have one or two workers and less than an annual turnover of N3 million, according to the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN).
The PCGS will disburse funds to a minimum of 1,000 beneficiaries per local government area (LGA) in the 774 LGAs and 6 council areas in the Federal Capital Territory. The target nano businesses include traders, food vendors, ICT businesses, transporters, artisans, and creatives, with a focus on supporting women and youth (70% of beneficiaries), people with disabilities (10%), and senior citizens (5%). Beneficiaries are not required to repay the grant, but they must meet certain eligibility criteria such as owning a nano business, being willing to register a business name, and engaging at least one additional staff member if their business turnover increases.
FGN MSME Intervention Fund
The second component is the N75 billion FGN MSME Intervention Fund, which will be used to support eligible micro, small and medium enterprises. Each beneficiary can receive up to N1 million, disbursed at an interest rate of 9% per annum with a 3-year tenor for equipment and working capital.
This fund is designed to address the financing challenges faced by MSMEs, which often struggle to access affordable credit due to various factors such as lack of collateral, limited credit history, and perceived high-risk profiles. By providing access to low-interest loans, the government aims to empower these enterprises to invest in equipment, expand their operations, and ultimately contribute to the country’s economic growth and development.
FGN Manufacturing Sector Fund
The third component is the N75 billion FGN Manufacturing Sector Fund, which will support eligible manufacturing companies to help cushion the high and rising costs of production, marketing, and distribution due to infrastructure deficiencies and other factors. Beneficiaries can receive up to N1 billion, disbursed at 9% interest per annum with a 5-year tenor for term loans and 1-year for working capital.
The manufacturing sector plays a crucial role in the Nigerian economy, contributing to job creation, value addition, and export diversification. However, the sector has faced numerous challenges, including high production costs, limited access to finance, and infrastructure bottlenecks. The FGN Manufacturing Sector Fund aims to address these challenges and enable manufacturers to enhance their competitiveness, increase productivity, and drive sustainable growth.
Execution and Oversight
The Bank of Industry (BOI) has been appointed as the executing agency responsible for the day-to-day administration of these three funds. This underscores the government’s confidence in the BOI’s expertise and track record in managing similar interventions.
The government has also put in place robust monitoring and evaluation mechanisms to ensure the effective utilization of the funds and to track the impact on the targeted beneficiaries. Regular progress reports and impact assessments will be conducted to ensure the funds are being deployed efficiently and achieving the desired outcomes.
Significance and Impact
The launch of this comprehensive N200 billion Presidential Intervention Fund demonstrates the government’s unwavering commitment to supporting businesses, fostering economic growth, and driving inclusive development across the country.
By targeting nano businesses, MSMEs, and the manufacturing sector, the government is addressing the diverse needs of the Nigerian business landscape. The combination of grant schemes, low-interest loans, and targeted support for the manufacturing industry is expected to have a transformative impact on the targeted sectors.
The PCGS, in particular, is poised to empower a significant number of nano businesses, many of which are owned by women and youth, providing them with the necessary financial resources to start, grow, and sustain their enterprises. This aligns with the government’s broader efforts to promote entrepreneurship, create jobs, and reduce poverty.
Similarly, the FGN MSME Intervention Fund and the FGN Manufacturing Sector Fund are expected to unlock access to affordable financing, enabling MSMEs and manufacturers to invest in equipment, expand their operations, and enhance their competitiveness. This, in turn, will contribute to the diversification of the Nigerian economy, the creation of new employment opportunities, and the overall improvement of the country’s industrial and economic landscape.