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May and Baker receives N1bn loan from CBN

Ngozi Amuche
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May and Baker receives N1bn loan from CBN

The Central Bank of Nigeria has extended its N1bn intervention fund for pharmaceutical companies to May and Baker, which spent its 2019 rights issue fund of N1.8bn on debt servicing and dividends payment.

According to its annual report, May and Baker received the intervention fund from the CBN in the first quarter of 2020.

The fund came in timely, as it was just before the Coronavirus Disease broke out across the country causing economic shutdown that has negatively impacted industries across the country.

The fund increased the company’s net loans from N482.5m in December 2019 to N1.7bn in the first quarter of this year.

This is not the first time the company had received intervention fund; in October 2010, it had received a CBN fund for manufacturers to the tune of N920m.

The intervention was particularly important, as just last year, the Nigerian Stock Exchange listed additional 745,234,886 ordinary shares for the company by way of a Rights Issue taking the total issued and fully paid up shares of the company from 980m to 1,725,234,886.

The ordinary shares were 50 kobo each at N2.50 per share and offered on the basis of one new ordinary share for every one ordinary share held as of September 4, 2018.

During the quarter, it reported a 68 per cent drop in earnings per share going from N7.74 per share in the same period last year to N2.48 per share in the first quarter of 2020.

The fall in earnings was a result of an increase in direct cost and overheads in the first quarter of the year. May and Baker earns 99 per cent of its revenue from its Pharmaceutical division. Its beverage division remains a small portion of its business.

The apex bank also announced a N50bn COVID-19 healthcare fund for the healthcare sector, giving the company another unique opportunity to increase its financial muscle.

The company’s share price is up 44 per cent year to date, and is one of the best-performing stocks on the exchange.

In December 2019, the company signed a partnership agreement with the French pharmaceutical giant, Sanofi, to produce four brands of the latter.

The four Sanofi products, which would be manufactured by May and Baker Nigeria, will be sold in West African markets.

AMCON: Taxpayers may bear N5tn debt

Ngozi Amuche
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AMCON: Taxpayers may bear N5tn debt

The Managing Director of Asset Management Corporation of Nigeria, Ahmed Kuru, says if AMCON is unable to recover debts of over N5tn, the debt burden will be passed on to the Federal Government.

Kuru, who spoke at the Borno Hall of the Trancorp Hotel, Abuja at the first seminar for AMCON Receivers/Receiver Managers in General Enforcement, said the implication of that scenario meant that taxpayers would bear the brunt.

The AMCON boss, represented by Aliyu Kalgo, AMCON’s Group Head, Resolution Strategy, called on AMCON partners, especially in the receivership business not to allow debtors to get away with their debts.

He said, “We reiterate, our receivers are very key to the success of AMCON. In order to streamline the functions of our receivers and make them more effective and accountable, we have developed a new Receivership Framework, which will henceforth govern our relationship in terms of management of the assets and accountability.

“We have had cause to disengage some of our receiver managers due to non-performance. We did that because assets are being abandoned without cause or plan to come out of the debt. And at times receiver managers are confused about their responsibilities.

“Therefore, I urge the participants to partake actively in this interactive session and share some of their experiences with one another so that we can all succeed in our collective efforts to recover the over N5trillion from these recalcitrant debtor, which is a national assignment.”

Speaking in the same vein, Dr. Francis Chuka Agbu, Senior Partner, Lexavier Partners and Alheri Nyako, the Chief Executive Officer of Alheri Legal and Allied Services Consulting supported the position of AMCON.

Agbu  described receivership as the most effective debt recovery tool within the current insolvency/debt recovery regime.

He explained, “Receivership, as a debt recovery strategy, is arguably the most effective debt recovery tool within our current insolvency/debt recovery regime.

“This is primarily because of the control, which it gives to the debenture holder/creditor over the assets, or the assets and business of the debtor company.

“By virtue of section 393(4) of CAMA, upon appointment of a receiver and manager, the powers/control of the directors over the debtor company become immediately suspended. Even where the receiver is not empowered to act as manager, he retains executive control over such portion of the company’s assets, which have been charged.”

The fall and fall of the naira

Raheemah Arogundade
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The fall and fall of the naira

Since the wake of the 18th century, the relationship between the naira and foreign currencies, especially the United States dollar, has been sporadic due to various local and international constraints in form of economic instability, fluctuating crude oil prices, inflation among others.

The naira was last devalued in August 2017 as a result of persistent inflation the country had to deal with. Till late 2019, the dollar/naira exchange rate was pegged at N360 to one dollar. The dollar is the most popular foreign currency used in Nigeria since the U.S. is the country’s primary trading partner.

Since the Coronavirus Disease reared its ugly head in December 2019, the Central Bank of Nigeria has been grappling with stabilising the country’s exchange rate as a result of low crude oil prices and the stoppage of economic activities in major sectors and cities. The influence of COVID-19 traverses many sectors, including foreign exchange, domestic and international stock markets and energy, which hit the naira hard.

Since the virus’ first appearance in China late last year, the naira weakened by 1.3 per cent to N366.63 per dollar. However, the currency’s fall was quickly restored in February due to the fall in reserves to over 4.6 per cent.

The fall in the prices of crude oil in the international market negatively impacted Nigeria’s economy, because the effect of the pandemic led to lockdowns. As a result of the downturn in economic activities and the oil price war between Saudi Arabia and Russia, CBN devalued the naira in March 2020 by approximately 15 per cent from N307 per dollar to N360, in an attempt to converge the multiple exchange rates used to stabilise the naira, which relies heavily on crude oil sales. Almost 90 per cent of the foreign exchange earnings come from oil and this has come under pressure as a result of the Saudi/Russia oil price war.

After the initial devaluation, several sources predicted another round of devaluation, as the initial one was unlikely to stabilise the currency. And even after, the naira still remained strained. Some days ago, CBN further devalued the naira by 5.4 per cent at the official market. The devaluation, as expected, increased the exchange rate to N381 per dollar and, as reported, this move is a calculated attempt at unifying the exchange rate as demanded by the International Monetary Fund and World Bank. This consistent depreciation indicates that a supply gap exists in the foreign exchange market. While the demand keeps increasing, there is insufficient supply to stabilise the exchange rate. This move is, however, positive, because it would successfully unify the official and Investors & Exporters exchange rate.

Since Nigeria majorly depends on revenue from oil, the devaluation will result in a boost, although minor to the oil revenue contribution. While the move to devalue the currency is only a part of the whole process towards ensuring a stable naira, there is the concern that the government may not put in the flexibility needed in the I&E window where majority of FX trading occurs. Since the COVID-19 started, liquidity has been low, recording a dropping daily volume of $300m in January to $45m in May.

Although a rise in the I&E window occurred recently bringing the total to N400m, this points to an increase in liquidity. However, this can only be sustained if the government is willing and able to pump more dollars into the market. This has helped the FX reserves stabilise to around $36bn since the beginning of June. But this is only sustainable for a period of time. The reserves will remain under pressure obstructing recovery of oil prices and discouraging foreign investors.

The unification of the exchange rate is a good step towards stabilising the currency and could increase the supply of the dollar locally. The devaluation alone will not bring major benefits unless there is greater flexibility. The FX reserves should be reviewed and reformed, as this adjustment is just insufficient to ensure the stability of the naira.

NGOs: Encouraging vocational training beyond formal education

Ifeoma Okonji
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NGOs: Encouraging vocational training beyond formal education

Much emphasis, over the years, has been given to education in structured settings like schools. The importance of such academic feat has been prominently foregrounded and regarded as significant for the growth of any nation, and even more important for personal development. But recently, vocational education is gaining more grounds and has been included in the Nigerian secondary school educational curriculum.

The primary purpose of vocational education is to prepare persons for employment in recognised occupations. From the foregoing, vocational education could occur either through formal, informal or semi-formal training.

Popularly recognised as Technical and Vocational Education and Training, this training has been regarded as a crucial vehicle for inclusion, social equity and sustainable development. This is because it affords both the literate and the non-literate categories in every society the opportunity to become a professional in certain fields. That is the reason Gazi Abdur Rashid says, “Vocational training is basically life and need-based education, which can convert an unskilled, inexperienced and illiterate population into human resource.”

Vocational training in crucial for developing countries like Nigeria because it is an avenue to enhance the quality of life of its population through work, without or along with formal education. In other words, TVET engenders self-employment and economic productivity of the populace, which makes it easier to fight under-development, poverty and unemployment challenges that more often than not engulf third world nations.

In addition, vocation training for individuals can be instrumental in improving the quality of life and standard of living. It will further give people the opportunity to participate in issues of national development. The application of vocational training in countries like Malaysia, Indonesia and Thailand has proved that its economic benefits are numerous and, if well utilised, would be immensely beneficial towards economic stability.

Through TVET, young and adult illiterates can become employable through the skills gathered from vocational training. It can transform people in such categories into skilled professionals in select fields and provide opportunities for self-employment and gradually help to tackle unemployment in the society.

Vocational training focuses on the acquisition of skills and abilities that would be beneficial for the individual as well as for the society.

While most organisations may focus on learning through formal education, some non-governmental organisations have focused on propagating both formal education and vocational training. Recognising this viable tool for national development and economic growth, NGOs in Nigeria and beyond are exploiting the prospects of vocational training. Such organisations have been actively training people on specific skillset in diverse fields ranging from technology, business to agriculture and a host of others.

Women Economic and Leadership Transformation Initiative, an NGO dedicated to empowering young and adult females, also actively participates in both formal and vocational education through the inclusion of TVET as part of the curriculum in the WELTI academy. For over four years now, WELTI has successfully trained hundreds of women in different Nigerian states and exposed them to opportunities through vocational training. A number of positive feedbacks have been received on the impact of such activities on the individuals, their immediate environment as well as the society they are in.

As individuals, organisations and governments recognise the need for vocational training, there is need to enlighten the populace on the prospects of such training for their personal development and the nation’s development. Vocational training should be seen as an asset that it is for national development and economic growth.

Infrastructure much more than bricks and mortar

Carl Manlan
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Infrastructure much more than bricks and mortar

By Carl Manlan and Michael Mapstone

Often when people speak about the need for infrastructure development in Africa, they are discussing bricks and mortar, improved physical structures such as transportation links, hospitals and schools. But creating a world in which the African continent can truly flourish and provide long term stability and growth for millions of people relies – arguably more heavily – on invisible infrastructure, the hidden strength behind those physical health centres, roads and community hubs.

Five years ago, the Ecobank Foundation collaborated with the Charities Aid Foundation to design a strategy that would help us become the ‘go-to’ partner in Africa in development of improved access to health and education, along with financial inclusion. It has been a rewarding journey.

With a financial institution as our foundation, we needed to explore how we could best deliver on what was, without doubt, an ambitious goal. We wanted to leverage what we already knew how to do in order to deliver the Foundation’s mission to achieve social change, while also helping to battle life-threatening diseases such as Human Immunodeficiency Virus, tuberculosis and malaria.

We have also been guided by CAF’s more recent in-depth research into growing giving in four countries in Africa – Tanzania, Kenya, Uganda, and South Africa. Aiming to capture the size and scope of giving among these countries’ respective emerging middle classes, the reports examined not just individual giving, but also the enabling environment. Recommendations included supporting the development of the invisible infrastructure, which supports civil society. Among them was promoting new ways of safe and secure giving to develop the potential for mass engagement and individual giving.

For the Ecobank Foundation, the need for secure giving translated into using the access given by the Ecobank Mobile App to reach potential donors, be they local or part of the African diaspora, and help them to give across Africa. It meant engaging with our staff to test dedicated fundraising appeals such as World Malaria Day and was used successfully to raise fund for the victims of Cyclone Idai in March 2019 and other initiatives that build on the giving culture of Ubuntu.

To move towards our goals, our foundation has also focused on harnessing the talents of Ecobank employees across 33 countries. In addition to our direct financial support of malaria prevention programmes in Mozambique and Nigeria, we are supporting the Global Fund and its local partners to develop technology-led solutions to finance challenges such as cash management and delivering mobile money support. Another example of this is providing mobile banking services to street children in Togo with a local charity acting as custodian to safeguard their small pockets of savings.

This is a strong example of what we knew from the outset about successful corporate social responsibility – it will only translate into real-world impact, if it is borne out of the local context – you must have a deep understanding of the problem you are hoping to help solve to make the best use of your resources.

For Ecobank Foundation, a cornerstone of this approach was the collaboration with the Ecobank Academy, a corporate university that provides training for finance managers working in health programmes that supported large relief organisations such as GF and the United Nations Population Fund. Drawing on our existing strengths, we were able to create an initiative to bridge the knowledge gap between financial institutions and colleagues working in development on the ground. Leadership and financial management training were also specifically designed for the International Federation of the Red Cross and Red Crescent Africa to support national societies.

From here, they were able to not only improve their individual governance and reporting standards, demonstrate their professionalism and thereby strengthen their relationships with funders, they were also able to connect with colleagues in similar organisations in other regions to share their successes and lessons learned along the way.

Therein lies a crucial piece of that ‘invisible’ knowledge infrastructure that will help to solve the transformation puzzle of development in Africa.

Amid our work in support of those affected by the Coronavirus Disease, our foundation has not lost sight of the battle against malaria, which continues to inhibit African development. We launched the Zero Malaria Business Leadership Initiative and joined with the RBM Partnership and African Union Commission’s Zero Malaria Starts With Me campaign, so that we can continue to work with like-minded institutions.

Despite the current crisis, we have cause to be hopeful. Both Ecobank Foundation and CAF are committed to working together to help create not only those desperately needed basic systems and services, but also the more complex and detailed and ‘invisible’ civil society infrastructure which, done thoughtfully and with a sense of purpose, provide tangible improvement to the lives of millions.

 

Manlan is the Chief Operating Officer, Ecobank Foundation, while Mapstone is the Director of External Affairs and Global Engagement, Charities Aid Foundation.

Factors impacting infrastructure development in Africa

Tonny Tugee
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Factors impacting infrastructure development in Africa

Without a doubt, Africa is one of the world’s fastest-growing economic hubs. Crucial to this rate of development is the ability to meet the demand for key infrastructure. At the end of last year, a World Bank economic update reported that Kenya had seen its Information and Communications Technology sector grow at an average of 10.8 per cent annually since 2016, becoming a significant source of economic development and job creation with spill-over effect in almost every sector of the economy.

While this is hugely encouraging news for Kenyans, it also raises questions about the factors which might impact the ongoing positive trajectory of infrastructure development, both in Kenya and the rest of the continent.

 

Fixed-line networks

In 2019, Kenya invested $59m in the Djibouti Africa Regional Express submarine fibre-optic cable system, which reached the shores of Mombasa in March this year. The others include SEACOM, East African Marine System, Eastern African Submarine Cable System and Lion2 systems. According to the Chairman of Kenya’s Communications Authority, Njoroge Mungai, the investment demonstrates the government’s desire to improve Kenya’s position as a regional IT hub. It is also aimed at guaranteeing both companies and individuals’ access to a faster, more secure, and more reliable internet connection. Revenues generated by the digital economy should reach $23tn by 2025, thanks to investments 6.7 times higher than those in other sectors.

In addition, terrestrial fibre networks have continued to expand, offering more connectivity options and better network redundancy – great news for land-locked countries. However, according to MainOne’s CEO, Funke Opeke, these remain under-utilised due to high prices and a failure to establish an enabling environment.

 

Mobile network coverage

Telecommunications has continued to register positive growth, with increased uptake and usage of mobile phone services. High-bandwidth internet infrastructure has become more widely available, while the roll-out of 4G infrastructure by the Mobile Network Operators has already led to substantial growth in subscriptions to data and internet services. With the expansion of fibre-optic infrastructure across the country, more homes will be connected to better quality, higher speed broadband services, which will be extended to the rural areas.

Consequently, the increase in mobile network coverage has led to a decline in fixed-line networks related to voice calls. Alternative solutions need to be considered to ensure a stable internet connection throughout Kenya to bridge the rural and urban digital development divide.

 

Poor infrastructure

The world is eager to do business with Africa, but finds it difficult to access African markets because of poor infrastructure. Greater economic activity, enhanced efficiency and increased competitiveness are hampered by inadequate transport, communication, water, and power infrastructure. The World Bank economic update, mentioned earlier, highlighted challenges relating to the inadequate power supply, transport networks and communication systems as crucial to ensuring ongoing connectivity, and continental economic development. It found that the poor state of infrastructure in Sub-Saharan Africa reduced national economic growth by two percentage points every year and cut business productivity by as much as 40 per cent.

It is estimated that about$93bn is needed annually over the next decade to overhaul SSA infrastructure. About two-thirds or $60bn of that is needed for entirely new infrastructure and $30bn for the maintenance of existing infrastructure. Only about $25bn annually is being spent on projects, leaving a substantial shortfall that must be financed.

 

Economic potential

The economic climate of Kenya will determine access to the tools needed to build the relevant infrastructure. According to Deloitte’s Corporate Finance Advisory Leader for SSA, André Pottas, this translates into exciting opportunities for global investors who need to look past the traditional western view of Africa as a homogeneous bloc and undertake the detailed research required to understand the nuances and unique opportunities of each region and each individual country.

 

Key to unlocking Kenya

With governments across the continent committing billions of dollars to infrastructure, Africa is at the start of a 20 to 30-year infrastructure development boom. Fortunately, we have access to a global network of exports, which we need to be utilising optimally to ensure a stable infrastructure, both digital and physical.

However, in preparation for the boom, the only way for Africa’s infrastructure backlogs to be cleared and to unlock connectivity and communications in Kenya is through globally-competitive, growth-oriented mobile and digital technology businesses. It is imperative to establish partnerships with trusted private sector players who already cater for the local and international communications market with reliable connectivity solutions.

 

Tugee is MD at SEACOM East Africa.

CBN allots 60% of N220bn MSMEs fund to women

Ngozi Amuche
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CBN allots 60% of N220bn MSMEs fund to women

The Central Bank of Nigeria has reserved 60 per cent of its N220bn Micro, Small and Medium Enterprises Development Fund for women entrepreneurs.

The apex bank added that two per cent of the fund would be given to economically active persons that are living with disabilities, as 10 per cent is meant for start-up businesses.

It disclosed this in the MSMEDF guidelines for non-interest financial institutions.

The Federal Government had last month announced that it would roll out palliatives to assist women-owned MSMEs recover from the impact of the Coronavirus Disease.

Minister of Women Affairs, Mrs. Pauline Tallen, explained that the national survey on the impact of COVID-19 on women-owned businesses in Nigeria captured trends and patterns of the losses caused by the pandemic on women-owned businesses, and would guide the government’s move to revive the affected businesses.

She said, “The impact of the pandemic on Micro, Small and Medium Enterprises has been quite massive, and resulted in unforeseen losses for business owners.”

However, the sub-sector is characterised by huge financing gap, which hinders the development of MSMEs.

“Section 6.10 of the Revised Microfinance Policy, Regulatory and Supervisory Framework for Nigeria stipulates that ‘a Microfinance Development Fund shall be set up, primarily to provide for the wholesale funding requirements of Microfinance Banks/Microfinance Institutions.’

“To fulfil the provisions of Section 4.2 (iv) of the policy, which stipulates that women’s access to financial services should increase by at least 15 per cent yearly to eliminate gender disparity, 60 per cent of the fund has been earmarked for providing financial services to women.”

It added that this informed the decision of the CBN to establish the MSMEDF, which has a take-off seed capital of N220bn.

The fund prescribes 50:50 ratio for on-financing to micro enterprises and SMEs by Participating Financial Institutions.

The commercial component will constitute 90 per cent of the fund, which is to be disbursed in the form of wholesale funding to the PFIs.

Unilever declares N60.487bn turnover

Ngozi Amuche
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Unilever declares N60.487bn turnover

Unilever Nigeria has declared a turnover of N60.5bn for the year ended December 2019, which is 34.9 per cent lower than the N92.89bn it recorded the previous year.

Profit After Tax equally declined from N10.55bn to N7.42bn.

These statistics were announced at the 95th Annual General Meeting of the company, which was held by proxy due to the movement and social restrictions imposed by the Coronavirus Disease.

According to the Chairman of the Board, HRM, Nnaemeka Achebe, the results reflect challenging conditions in which the company has had to operate, as well as the company’s decision to tighten credit terms to address exposure from trade receivables and excess stock in trade to better position for innovation and return to competitive growth.

At the AGM, Achebe commended the stakeholders for their trust and loyalty to the company, and assured of the firm’s commitment to good corporate governance that would in turn drive sustainability and profitability in its operations.

“Although we are not declaring dividend for FY 2019, we are optimistic because our results show that we made progress in some other critical areas of our operations, which speaks to the fact that we are on the right path to growing our business for profitability and better returns on investment for our shareholders.

“Therefore, the task before the board and management is to drive our strategic objectives that would not only keep the business afloat but also ensure it operates efficiently,” Achebe said.

He noted that despite the challenging business environment, which had been further complicated by the COVID-19 pandemic, the management at Unilever Nigeria would remain strategic in their approach to sustaining the company’s operations to revert to profitable and sustainable growth.

Unilever Nigeria, in April, declared its Q1 2020 interim report, showing a 30 per cent decline across its revenues from Food Products, Home and Personal Care divisions.

Revenue fell 19.5 per cent from N9.2bn in the corresponding quarter in 2019 to N7.4bn in Q1 2020.

The company had, in 2018, sold off its spreads business, which includes the household name brand, Blueband Magarine.

New SEC DG vows to attract more retail investors

Ngozi Amuche
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New SEC DG vows to attract more retail investors

The Director General of the Securities and Exchange Commission, Mr. Lamido Yuguda, has pledged the determination of the SEC’s new management to make the capital market more accessible to more investors.

Yuguda, in an interview in Abuja at the weekend, said this would help attract more retail investors to the capital market and ensure steady growth.

“We need to make operations in the capital market as easy as possible; that way, we can attract investments.

“We are aware that some investors have left their money due to the Herculean procedures involved in getting them; hence our desire to ensure that people are able to benefit from investments. With that, we can increase investor confidence.

“We will look at the processes involved and streamline them to ensure that investors are able to get their money without much difficulties. When that happens, people can be motivated to come back to the market. Unless we are able to attract people back, we cannot get the capital market that we can be proud of,” he said.

Stressing that the commission had zero tolerance for sharp practices in the capital market, he urged stakeholders to ensure that they operate according to laid down rules and regulations.

He further stated that investor protection would be at the centre of the initiatives of the new management, warning that any operator that short-changed investors would not go scot-free.

“Retail investors are key to the development of the capital market in Nigeria and we​ want to assure investors that this market is for them. We are ready to do everything to increase investor enlightenment through education, robust regulation and fair dealing.

“We have robust rules and regulations guiding conduct in the capital market. We, therefore, urge operators to obey these rules. But for those that want to defraud investors, there would be no respite because we are ready to fight market manipulation and sharp practices. Anyone that flouts our rules will be made to face the consequences,” he stated.

Urging investors to key into the various initiatives already rolled out by SEC, including e-dividend, regularisation of multiple accounts, Direct Cash Settlement among others in other to have the benefit of their investments, he stated that the commission introduced a forbearance window to enable investors that bought shares with different names to regularise their accounts, to reduce the quantum of unclaimed dividends in the capital market.​

His words, “We have told them that there is no penalty for doing so, as the SEC is not prosecuting anybody. All we want is for them to be able to get the benefits of their investments. However, many people have still not been able to claim their dividends because some of them have forgotten the names they used while others have not been able to prove to their stockbrokers that they are the owners of the shares.

“The SEC has given such shareholders amnesty to go, and claim their shares and as people are claiming those shares, unclaimed dividends number will go down. On our part, we will continue to persuade investors to regularise their accounts to curb the problem of unclaimed dividend.”

FG rolls out N2.3tn survival funds for MSMEs

Ngozi Amuche
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FG rolls out N2.3tn survival funds for MSMEs

The Federal Government has announced plans to roll out a N2.3tn stimulus package and survival fund for Micro Small and Medium Enterprises to stay afloat amid the economic challenges imposed by the pandemic.

The survival fund includes payroll support for three months, and guaranteed off-take scheme among others, all under the National Economic Sustainability Plan.

Vice President Yemi Osinbajo, who heads the Economic Sustainability Committee, disclosed this at the 2020 edition of the Micro MSMEs Awards which held via a video conference.

Speaking during the virtual event, Osinbajo noted that the plan was approved by the Federal Executive Council to help small businesses amid the COVID-19 pandemic.

“In that plan which essentially envisages an overall N2.3tn stimulus package, we made extensive provision for financial support to MSMEs, ranging from a guaranteed off-take scheme to a survival fund that includes a payroll support programme for qualifying businesses.

“The guaranteed off-take scheme seeks to provide support for MSMEs, manufacturing local products by guaranteeing the purchase from them of qualifying products such as face masks, hand sanitisers, Personal Protective Equipment for medical workers among others” he noted.

These products will then be distributed to individuals, institutions, and entities that need them.

He added that the provisions of the recently signed Finance Act also provides for “graduated company income tax rates with zero rates for small companies and a rate reduction for medium-sized companies.”

Criteria
To benefit from the scheme, MSMEs would have to go through a rigorous and painstaking verification process which will be based on certain criteria.

MSMEs that have between 10 to 50 staffs are qualified to receive the fund. The businesses must make their payroll available to the government for verification while applying for the fund. Once qualified, the MSMEs will be eligible to have their staff salary paid directly from the fund for three months.

The target beneficiaries of this scheme, according to Osinbajo, will include private schools, hotels, road transport workers, creative industries and others.

According to Osinbajo, a provision of N200bn would be made available to MSMEs in the priority sectors such as healthcare, agro-processing, creative industries, local oil and gas, aviation among others, in a scheme jointly run by the Bank of Industry and Nigerian Export Import Bank for export expansion.

He added that the Central Bank of Nigeria was also committed to creating a N100bn target credit facility for MSMEs.

The vice president said that the government had similarly focused interventions for MSMEs around the country, such as the tomato paste production plant in Kaduna State, the fashion hub in Lagos State, leather works cluster in Anambra State and the carpentry cluster in the FCT, all of which are scheduled for 2020.

“In 2021, Edo, Ekiti, Katsina, Ogun, Bauchi and Enugu states would commission shared facilities that will bring MSMEs together by cluster and provide shared equipment and resources and business support hub,” he stated.

Osinbajo congratulated the winners of the MSME awards who won cash and car prizes, for their ingenuity in starting and sustaining their businesses.

The CBN had, few weeks ago, rolled out the N50bn targeted credit facility stimulus package to MSMEs and other loan seekers.

The apex bank also warned all loan seekers not to pay any amount as application processing fee as there is no such requirement.

A statement by the bank’s Director, Corporate Communications, Isaac Okorafor, said, “For the avoidance of doubt, there are clearly spelt out procedures for accessing the N50bn TCF stimulus package to support households and Micro, Small and Medium Enterprises affected by the COVID-19 pandemic, which are disbursed through the NIRSAL Microfinance Bank.”

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