Pastor Bassey James is the founder of South Atlantic Polytechnic, Uyo, Akwa Ibom State and the Senior Pastor of Royal House of Faith International Ministries, Lekki, Lagos. As the President of Southern Youths Development Forum, he is passionately concerned about the welfare of Nigerian youths and engaged in advocacy aimed at improving their lot, have had the grace of being early starter (when he was 20 years) in the quest for personal economic advancement. He recently turned 50 and took a brief moment to share his thoughts about the state of youth in Nigeria today.
You just turned 50. How do you feel about the state of the nation?
Generally, I feel okay and fulfilled. I feel that we are moving in the right direction, but there are things that still need to be corrected. We have great need to create employment for our teeming population, especially for the youths. We have to create an enabling environment for business to grow.
The biggest issue we have today is that Nigerian youths are frustrated by the state of the economy. I have said at several times that Nigerian commercial banks are not doing what they should do to assist the growth of micro, small and medium scale enterprises (MSMEs). They have abandoned this major responsibility, unlike their counterparts in other countries. Instead, they are busy chasing fat accounts of government agencies. It is heartwarming that the FG led by President Muhammadu Buhari implemented the Treasury Single Account (TSA) initiative in the first term of his administration. If not, I wonder where the country would have been today, in terms of management of federal government revenue. That singular move removed a huge amount from the control of banks.
I think we need to go further, to implement TSA at the state level, so that Nigerian banks will begin to do real banking, by pursuing private sector deposits and extend loans to the private sector. A situation whereby the banks give huge and unreasonable loans to the government using their statutory allocations as security is the reason the private sector is not being funded. As at today, 90 per cent of the banks in the country are not designing affordable credit facilities, and that is why micro-enterprises are not thriving, despite the fact that individuals have creative ideas for commercial ventures that can create employment opportunities. The banks are busy seeking to connect with state governors, ministers and other politicians, from who they get cheap funds. Every year they declare huge profits earned from doing nothing tangible to support micro, small and medium enterprises, which are the real engine of growth in any economy and create millions of employment opportunities.
But banks are not supposed to be Father Christmas. Are they supposed to lend money to people without collateral security, without being sure that the borrower will be able to repay?
Nobody is saying that the banks should be Father Christmas. What I’m saying is that banks are not doing creative banking that enables the establishment of MSMEs for our qualified youths. Take me as an example: I have been engaged in projects and enterprises in the last 20 to 25 years, yet, I cannot access funds to support what I’m doing. I have built an educational institution in Uyo, which has been commissioned and will take in the first set of students this year. I have put down massive infrastructure in the place and we are building more structures required for the effective operation of the institution, in ways that reflect global best practices. Already, we have an alliance with Microsoft Digital Academy, to train youths in various aspects of the information technology value chain. We are opening associated small-to-medium scale enterprises that would provide practical training and hands-on experience to students of the polytechnic, in the areas of shoe-making, other leather wors, garment production, computer engineering and electrical engineering. When we needed funds to bring certain equipment, we did not get support from banks. They were not interested. But as soon as we finished building and we were about to take off, the same bank executives that did not help us came back to ask for deposits. Can you imagine that kind situation? The physical structures of the polytechnic at the time we were still building were worth a whole lot, and more than enough to encourage any bank to give loans, but still they did not help us.
The Buhari administration cannot singlehandedly create jobs. From the Obasanjo to Jonathan administrations, and anywhere else in the world, there is no government that singlehandedly create jobs for the people. Even the communist nations like Russia and China failed when they tried it. But when they opened their economies to private sector participation, they began to grow. Under Deng Xiaoping as the national leader, China changed to private sector driven socialist economy, which resulted in massive MSMEs, where the government provided very powerful and cheap long-term loans, guaranteed by the government. This attracted foreign corporations and banks to invest in manufacturing and other industrial enterprises. Within a short time, China became the Number -1 contract manufacturer to the world. It surpassed Japan and became the second-largest economy in the world after the United States, which it is even trying to dethrone by 2050. It is now global economic and military power that is now able to strongly challenge America and other countries around the world, in all spheres of life. It was visionary leadership that made it possible for China to emerge as a global power.
When Indians and other Asians come into Nigeria with just their briefcase and a business proposal, they are able to get loans from banks to finance their ideas, but Nigerians do not find it easy to do same.
There is nothing special that the Indians or Asians do that we cannot do. Most of them do not have ten per cent of the assests I have on ground. They come in with nothing. Today, they have massive buildings and factories in key urban areas and the banks are giving them loans.
Is it that banks have a trust issue with Nigerian MSMEs?
There is nothing like trust issue involved. The fact is that banks do not want to help Nigerian MSMEs. That is a simple truth.
What is the way forward?
I said earlier that the federal government should declare a national emergency on unemployment and put in a placement scheme for job creation that would be driven by the private sector. Then funds will be provided to the Bank of Industry to fund the MSMEs through the banks. Each bank will create a special window for qualified MSMEs to access the funds at a very low-interest rate. It must be a deliberate well-thought-out program designed to succeed. And which must serve as a form of political patronage.
Secondly, the state governors must liberalise the process of securing Certificate of Occupancy or Governor’s Consent. With either of these two documents, it will be easier for building entrepreneurs to access bank credit. Look at what Babatunde Fashola did when he was Lagos State governor. He acquired large expanse of agricultural land in Epe, Badagry and other parts of Lagos. Then he got young farmers trained under the agricultural program of the state to form cooperatives. Each member of the cooperative was then given land to lease with title within the area previously acquired by the government, which holds the certificate of occupancy. The title enables the leaseholder to access credit and source necessary equipment on affordable lease arrangements under the guarantee of the state. Again, state governments can work with other credible and established entrepreneurs to create clusters of micro-entreprises around the country. For instance, Slot is now training young people on how to fix phones and computers in its academy. By the time they complete the training, it will be easier to provide the ex-trainees with start-up funds. Again, the lady mechanic initiative has turned out successful and produced a growing number of lady mechanics. At South Atlantic Polytechnic, we have a similar scheme for young people who earn stipends while undergoing training. So by the time they graduate from the program they would have saved enough money to enable them to take off. I believe that the private sector can create linkages like these instances I have mentioned, whereby banks can come in to facilitate these initiatives, in ways that are beneficial to the society.