By Amaechi Ogbonna
With Nigeria’s unemployment rate at a whopping 33.3 percent at the last count, no one needs a soothsayer to prophesy to its citizens and government that we are indeed sitting amidst a high caliber time bomb capable of very disasterous consequences if handled with levity.
Even those more knowledgeable in the rudiments of this hydra-headed social malaise are also concerned that the festering contagion already has some nexus with the nation’s rising security challenges given that youth unemployment among Nigerians aged between 15 and 34 years increased to 42.5 per cent from 34.9 per cent while rate of underemployment for the same age group declined to 21.0 per cent from 28.2 per cent, according to figures from the National Bureau of Statistics (NBS).
This is even as some commentators believe the country’s rising unemployment may have been fueling poverty among the populace across the federation, thus pushing many energetic youths into joining vicious criminal gangs currently being linked to banditry, killings and kidnappings.
However, based on the deleterious consequences of the subject matter, more policy analysts have began to acknowledge some of the government’s recent intervention policies including the N500 million Tertiary Institutions Entrepreneurship Scheme (TIES) designed to sharpen the business management skills of young Nigerians in tertiary institutions of learning.
The overall objective of this policy is that rather than having young graduates and undergraduates roam the streets in search of non -existent white collar jobs, they can indeed be supported to become employers of labour if the toolkit of entrepreneurship from the Central Bank of Nigeria (CBN) can be extended to them in good time.
With the negative impact of falling commodity prices already taking its toll on the government’s cashflow, it has become obvious now than ever before that the three tiers of state administration cannot possibly meet the employment needs of millions of jobless citizens that inculcating the spirit of private enterprise into these energetic youngmen and women could be a more plausible approach to addressing the unemployment overhang at this time of severe global economic contraction.
Consequently, the TIES programme, according to the Governor of the Central Bank of Nigeria (CBN) Governor Godwin Emefiele, was developed “in partnership with Nigerian polytechnics and universities to harness the potential of graduate entrepreneurs by creating a paradigm shift from the pursuit of white-collar jobs to a culture of entrepreneurship for economic development and job creation.”
Emefiele said the Central Bank was collaborating with some tertiary institutions to develop entrepreneurship programmes and to support—through provision of access to finance—graduates and undergraduates with bankable ideas.
With the benefit of hindsight drawn from successful economies like China, India, the United States of America and parts of Europe, it is a certainty today, that youth entrepreneurship schemes play significant roles in their economic transformation matrix by contributing to innovation, wealth creation and improving the people’s standards of living.
In this regard however, Nigerian youths have proven to be very resilient and innovative especially in the tech space and other sectors of the economy where they have continually shown outstanding doggedness.
For the nation’s enterprising youth, the launch of CBN’s N500 million Tertiary Institutions Entrepreneurship Scheme (TIES) certainly could be a game changer given the focus and configuration of the special capacity building and financial access intervention programme. From all indications, there is an understanding that at last, the twin challenge of lack of capacity and access to finance which have contributed the most to the untimely death of most Nigerian startups over the years are being frontally addressed by a government agency.
According to Mr Emefiele, this intervention would create an enabling business environment that supports innovation and enable the youth to unleash their entrepreneurial potential, thereby redirecting their focus from seeking white-collar jobs to embracing a culture of entrepreneurship.
TIES targets to create an environment that supports a re-orientation training, and providing financing models that would address the peculiar needs of the various sectors where these individuals ply their businesses.
Emefiele explained at the launch that the intervention consists of three main components that include term loan, equity investment, and development grant.
He then urged government at all levels to evolve policy measures to support entrepreneurial development among the youth across the country as it was particularly crucial considering that about 600,000 students graduate yearly from tertiary institutions without commensurate employment opportunities in both the public and private sectors.
The ceremony also culminated in the inauguration of the Body of Experts (BoE) by the CBN governor with the Group Managing Director/Chief Executive, Sterling Bank Plc, Mr. Abubakar Suleiman as chairman among other professionals who are assigned the responsibility of evaluate and ranking entrepreneurial presentations made by the tertiary institutions under the development (grant) component.
Emefiele explianed that part of their mandate was to recommend projects with high transformational impact for grant awards, stressing that the official launch of the TIES and subsequent inauguration of the BoE for the scheme’s development component was a testimony to the important role the youths play in building new blocks for economic growth, particularly as national growth was highly dependent on strong and competitive businesses.
The CBN boss noted that bridging youth financing gaps and enhancing their access to low-cost credit to drive development of business was a task that could only be addressed by an innovative financing model that correlates with the complexity and dynamics of these small businesses.
While reechoeing his speech at the occasion of the 51st convocation of the University of Lagos, in a July 2021, convocation lecture, titled, ‘National Development and Knowledge Economy in the Digital Age: Leapfrogging SMEs into the 21st Century.’ Emefiele promised that the apex bank would seek fresh collaboration with tertiary institutions to develop entrepreneurship programmes and to support – through the provision of access to finance – graduates and undergraduates who have bankable ideas to bring them to fruition.
This also aligns with its 2019, policy pronouncement and pledge to create 10 million jobs in five years in line with President Muhammadu Buhari’s resolve to lift 100 million Nigerians out of poverty through job creation and economic diversification.
Meanwhile some experts who spoke on Daily Sun on the topic under review said the Tertiary Institutions Entrepreneurship Scheme (TIES) would be a strong enabler to achieve the Federal Government’s dream of mass job opportunities for its teeming young adults.
Already discussions are ongoing between CBN and the management of some of the tertiary institutions to develop a “framework for an innovative financing model that will support entrepreneurship development among our graduates and undergraduates.”
To kickstart the process, CBN said it would expect the authorities of these institutions to provide land from their large real estate assets for potential students beneficiaries to test their entrepreneurial acumen before graduation to help them CBN hone their entrepreneurial spirit.
Emefiele said: “With about 600,000 students graduating yearly from Nigerian tertiary institutions and without commensurate employment opportunities in both public and private sectors, it has become imperative that governments at all levels, put in place policy measures to support entrepreneurial development among our youths. Such measures would create an enabling business ecosystem that supports innovation to enable the youth to unleash their entrepreneurial potential by redirecting their focus from seeking white-collar jobs to a culture of entrepreneurship development.”
That ecosystem should provide support in re-orientating, training, and providing a financing model apt to the peculiarity of the sector within which the businesses operate.With an estimated population of 213 million, two-thirds of which are youths, aged under 35 years, Nigeria, Emefiele said is faced with a historic opportunity, particularly as the demography continues to create clear evidence of their relevance to economic development, as accentuated by the global recognition of Nigerian tech start-ups and continued growth of businesses in the technology space owned by the youth.”
In October, the apex bank released implementation guidelines for TIES and opened the portal for submission of applications.
TIES will bridge the financing gaps that have previously prevented young Nigerians from accessing low-cost credit to drive development of business ideas. The scheme is designed to address three segments:
This component provides direct credit opportunities to graduates of polytechnics and universities of not more than seven years post-graduation.
A successful applicant, will be eligible for a maximum N5 million for an individual, sole-proprietorship or small company; and a maximum N25 million for a partnership or company.
Commenting on how to make the TIES dream come tthrough, Mr Daniel Dickson-Okezie, Chairman, SME Group, Lagos Chamber of Commerce and Industry (LCCI), said “We keep coming up with policies. We have enough policies already on ground, but all we need to do is implement them the right way. The TIES is good like other previous ones.
Actually one of the highest threat or challenge Nigeria has today is unemployment. That is why crime is multiplying and the level of poverty is increasing.
Going by the country’s level of unemployment, how many people will the scheme cover.? The policy can only be impactful if they involve the organised private sector, which includes the NASME,NASSI, LCCI.
Such policies can be implemented through them for a better result, since they have records of small business owners and the experience. They can serve as mentors to those graduates and undergraduate for e better result. The LCCI has a large number of mentors that can play very prominent roles in this whole exercise. So it is important they get involved at some point.
Another issue is funding of the scheme. The policy might be projected to meet a targeted number of business owners, graduates or undergraduates, going by the past experiences we saw that sometimes and at certain stage, there is shortage of funds to meet the demands of the project. They should ensure that there is available funds before putting out any scheme.
Data base is a huge hurdle in the country, as we are not good at accurate data. The CBN needs to know how many graduates or undergraduates of the universities or polytechnics are to be covered. Without data, they might not achieve much. What level of graduates, how young are the graduates the policy is meant for; these things need to be spelt out.
There should be plans in place to ensure the beneficiaries won’t end up misusing the funds which means there should be proper monitoring of potential beneficiaries to avoid a bad debt situation, which could affect the scheme and others who might want to be future beneficiaries. Due diligence should be in place so as to recoup their money when it’s time.
Similarly Anthony Omojola, National Coordinator, Independent Shareholders Association of Nigeria (ISAN) describes the policy as commendable, adding that it’s just that the administration is somehow not encouraging.
In his words, “the most important thing is that at the end of the day, it meets its purpose and everyone can benefit. For a scheme like this, getting the data of the target audience is very important. They don’t know the customers, so as to monitor and keep in touch with them.
That is why at the time of paying back, after the loans must have served the purpose and needed to be returned to meet other customers, most beneficiaries renege when they can’t meet up with loan payment terms.
This could defeat the purpose of the scheme Without data, it might be difficult to monitor accurately those that have collected loans and If loans are disbursed through the money deposit banks that have their data, details and knowledge of the businesses they are into, they will be in a better position to monitor them.
If the beneficiaries are monitored well, they can pay back at the specified time which will enable others get allocations too.
The policy is targeted at reducing unemployment in a way which is good.
For those who are enterpreneural already, the loan can be helpful if put into judicious use. It will help them expand and become employers of labour even while in school and for those leaving school.
But lack of data could be a major setback because the CBN cannot capture all the young graduates or undergraduates in the country. Not withstanding the obstacles, the idea is very good , but how to harness it and get the best of it remains one of the major challenges.
The ability to monitor it and make it effective will determine the success rate.
Therefore, if it’s not effectively implemented, we are also rather destroying the value for money. This is very critical when we realise that when money is doled out and it’s effectively utilised, then it can be sustained. It will create employment and support the unemployed. Every university has a project or venture that generates little income for them to meet some needs, and so their partnership with banks on that ground can also be monitored.
That is why we have consistently advised that educational institutions curriculum be expanded to accommodate entrepreneurship and other business skills that will help us fight youth unemployment.