By Bimbola Oyesola and Merit Ibe

The recent disbursements of an estimated N165.7 billion to 239 beneficiaries from over 3 million applicants in the pilot phase of the Nigerian Youth Investment Fund (NYIF) by the Federal Government evidently signposts the yawning desire for financial freedom among Nigerian youths and the enormous responsibility ahead of the federal government in creating a secured future for its youth.

With millions of Nigerian youths educated, skilled and unskilled roaming the streets in search of better life in several cities and the hinterlands, many have compared Nigeria’s unemployment menace as a time bomb waiting to explode.

Indeed, the situation got a head recently when the latest NBS economic data showed that the nation’s unemployment rate spiked to 27.1 per cent in second quarter (Q2) of  2020 from 23.1 per cent in the third quarter  (Q3) 2018, with the number of persons in the economically active or working age population (15 – 64 years of age) during the reference period of the survey, Q2, 2020 recorded at 116,871,186.

Moreover, a further breakdown of this statistic indicated that  majority of those in that bracket are youths, the very future of the nation’s bureaucracy that ought to be properly trained, and motivated in preparation for future challenges.

However, leaving these vibrant energies on the streets can only come with catastrophic consequences similar to the #EndSARS protests across the country.

This explains why the approval of the N75billion Nigerian Youth Investment Fund ( NYIF) by the Federal Executive Council (FEC) on July 22, 2020, now being implemented in partnership with the Central Bank of Nigeria (CBN), Federal Ministry of Finance, Budget and National Planning (FMFBNP) has described by some management experts as a step in the right direction.

The Fund is being disbursed through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance Bank (NMFB).

As would be expected, the Central Bank of Nigeria (CBN), as Banker to the government had provided the initial N12.5 billion seed money required for the Fund to operate in the remaining part of 2020.

This came as the Ministry of Finance, Budget and National Planning for its part had committed to providing the next tranche of the fund in the 2021 budget.

According to the managers of the scheme, the Fund would be spread over 3 years to cater to youth-owned businesses and investment needs, since Loans provided under the NYIF, have an interest rate of 5 percent per annum, a tenor of up to 5 years and a moratorium of up to 12 months, with the age bracket of beneficiaries put at between 18 and 35.

A strategic objective of the NYIF is to financially empower the Nigerian youth to generate at least 500,000 jobs between 2020 and 2023.

The N75billion NYIF is akin to setting up a bank where Nigerian youths can access funds when necessary to fund or expand their businesses.

Beneficiaries of the loan must have a business or enterprises domiciled and operational in Nigeria and must not have been convicted of any crime in the last 10 years.

In addition, such beneficiaries must have a valid BVN or Bank verification Number coupled with a Local Government indigene certificate.

Under the initiative also, the government will first train between 500,000 – 1,000,000 youths over the next two years through its DYWF project – Digital Youth Nigeria. This is in addition to Work Experience Program already in place as one of the programs to allow youths gain first-hand experience working in the ministries, departments and agencies of the Federal Government.

However, as laudable as the NYIF appears in concept and objective, some development experts have expressed concerns in quarters over government’s commitment to its implementation and attainment of its set goals.

With several of such initiatives already left to rot years after conception, observers have been asking whether the NYIP would be another flash in the pan or end up an enduring legacy of the Muhammadu Buhari-administration to solve unemployment challenge facing the nation’s youth today.

Commenting on the likely benefits of the NYIF, if adequately implemented, President of the Pharmaceutical Society of Nigeria (PSN), Mazi Sam Ohuabunwa admitted that Nigeria’s unemployment challenge is quite phenomenal. “It’s quite large and there is no single answer to it, but the critical  thing is that the more Nigerian youths are empowered  to create jobs,  to solve problems,  to fulfil needs,  create value,  the better for them and the economy. 

So, the investment is a shot in the dark, it’s a long arm shot (the money) yet It’s better than nothing,” Ohuabunwa said.

According to him, “The critical question is whether the money will get to the targeted youths who have progressive  projects. That is what we must guarantee because we know in Nigeria that money has been provided for farmers and non -farmers got it, the same for industrialists and non-industrialialists go it. That is what we need to avoid, so that it will not be misdirected,” he advised.

Ohuabunwa admitted that the Central Bank of Nigeria under Mr Godwin Emefiele as governor has been trying in device ways to help the economy even beyond what we expected it to do in the past to reflate the economy, adding that he supports what the apex bank was doing to bolster the economy.

The PSN boss said “For the funds to get to the targeted group, the best way is to hand it over to private sector organisations like the Nigeria Economic Summit Group (NESG) and the Organised Private Sector (OPS). Government  can work in concert with them and let it be that the private sector will get to know the businesses and proposals that are credit worthy,  than to put pressure on government.. “For the youths, anyone that has not built a kiosk before may not know what it takes to build a store. So it’s better to use  practitioners.

Even if government cannot  handle that, it can be part of the committee  that will select. And everytime awards are made,  it should be published, so that Nigerians will see that it is for real. It should be given to the private sector to manage so that we get rewards and avoid doubts.”

For skills required to handle the development, you must have what they call the Entrepreneural paradigm.

You must have the entrepreneural mindset,  which is value creation mindset.

You need certain skills. First you must understand how to plan a business, must be accounting and financial literate and have  management knowledge on how to manage human resources starting from yourself, these are basic skills. 

You must have the three Cs… Character, Courage and Competence.  If you don’t  have character, you will misuse the money,  if you don’t have courage,  you will not go far, if you don’t have competence you will also lose the money. 

For the freshers who do not have the skills or experience, they can be trained or given orientation by the private sector.

For his part, CEO, Heritage Capital Markets Ltd, and former president of ICAN, Mr Chidi Ajaegbu, Nigeria is not bereft of policies, but the problem remains implementation and the weakness in the system. 

Because of chronic endemic corruption in the system, all policies seem to fail because  corruption is there challenging the good intentions of the policies. He advocated a system that build entrepreneurship into the youth from the secondary school level to tertiary institutions so that youth can learn wealth creation and financial management before money can be disbursed to them for business.

Until we get it right in terms of getting people to account for the monies and responsibilities given to them, we are not likely to perform. 

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Lack of attempt towards accountability, probity, excellence, is a nullity until we deal with corruption. 

Our education system has to be reformed. 

We cannot progress as a nation when we have a system that is hinged on sorting, special centres and all forms of shenanigans. 

Every economy  that made progress is knowledge driven. 

Except we decide to invest in our education sector, research, our lecturers  and others, we cannot  grow. Our system has collapsed. 

We have the skills imbedded in us, all we need is good leadership and structures in place to be able to bring out the skills. 

We need to include entrepreneurship into our school curriculum from ordinary level (O level), to our tertiary institutions and courses, so that our students have that spirit to generate wealth,create and expand wealth. We need to catch them young, teaching them early to be entrepreneural. We need to allow people think out of the box. The youths, need to know how to own their own businesses, make money ,create employment.

By doing that they are making use of their inbuilt skills. 

DHL, Toyota, Suzuki, Microsoft, all started from a one room apartment office and have blossomed today. It all started from one having an idea. 

We need to empower  the youths who are ready to work and think.

Also speaking, Mr Eke Ubiji, Executive Secretary of National Association of Small Medium Enterprises ( NASME) said the initiative is good but expressed concerns with its implementation. 

He said: “Before empowering youths with finance, the first step would to train them on skills acquisition. There is no doubt that the idea is good to address youth employment, but some of these funds in the past did not get to the right persons, or targets while some received peanuts that could not achieve anything.”

Empowerment requires skills needed to manage the resources, and so authorities  need to identify the business and know how adequate or viable it is do market survey and know how to utilise the money,  so that they don’t see the money as a largesse and waste it. They need training and mentoring. 

If the funds are disbursed to the right persons, it will have a multiplier effect, and  create more jobs. 

You cannot work without statistics, I think government and CBN should work with the National Bureau of Statistics which is a competent body and other relevant bodies to get accurate or near accurate number of unemployed  youths in the country to help them get to the target audience and in the policy implementation planning.

Meanwhile the Lagos Chamber of Commerce and Industry (LCCI) has said the N75 billion Youth Investment Fund will have some positive impact if properly targeted.

Its Director General Dr Muda Yusuf however opined that for better outcomes to be realised from the intervention funds in areas of job creation some other complementary conditions including infrastructures [like power and transportation]; policy consistency; effective regulatory environment to curb smuggling, faking and counterfeiting , ports processes and many more must be standardized and put in place.

“Advancing the frontiers of economic growth is not just about funds, the operating environment and policy context must also be right,” he said. 

He warned that unless this is addressed, default rates of the intervention funds will remain high and the impact will remain marginal.

He said, “For example, one of the biggest beneficiaries of intervention funds is the textile manufacturing sector. Today, the sector is still comatose. Many of the companies could not repay the loans; some are already in receivership. 

“This underscores the point that while funding is important, other factors which impact on competitiveness are equally critical.”

Another key concern about the intervention funds, according to  the LCCI boss, is the guidelines for the management of the fund. 

He stated that for most of the funds, the deposit money banks are expected to provide 100 per cent cover [to the CBN] for the funds disbursed and this should be done with securities such as treasury bills and Federal government bonds. 

Yusuf said the implication is that the banks are made to bear full credit risk for the facility. 

“They would be held fully responsible in the event of default. This is why the banks also impose stringent collateral conditions for granting the loans which invariably creates a major problem of access to the funds, especially by the SMEs,” he said. 

The LCCI said some banks are not even keen about intervention funds for this reason, as the risk and reward metrics are not often favourable. 

For better results, the LCCI boss believed that risk bearing responsibilities of the banks in the funds should be reduced considerably through other forms of guarantees.

He equally said the obsession of policy makers [in the context of interventions funds] for real sector also needs a rethink. 

He stated, “There is a perception that for jobs to be created in the economy, focus of funding should be almost entirely on the real sector. But the integrated character of the economy needs to be understood. 

“The inter sectoral linkages also should be appreciated. The distributors for instance, needs funds to buy the products of the manufacturers for onward transmission to the consumers; the transporter that moves the products to different parts of the country needs funds to buy and maintain trucks; the fashion designers needs funds to buy fabrics from the textile manufacturers; the advertising companies that undertake marketing and promotions of the real sector products needs funds; the ICT Professionals need funding to build capacity to support the real economy, and so on.