Ifeanyi Onuba, Abuja
Within a four year period covering 2014 to 2018, over $ 1 bn was lost by the country to Micro, Small and Medium Enterprises- related corruption , a report released on Wednesday in Abuja has revealed .
The report titled “ Stolen dreams: How corruption negates government assistance to Nigeria ’ s small businesses ” was produced by the Carnegie Endowment International Peace in collaboration with the Open Society Initiative for West Africa .
The key findings of the report were presented by the Lead Partner, Sustainable Entrepreneurship and Economic Development Initiative, Mr Celestine Okeke.
Based on the Central Bank of Nigeria ’ s official rate of N 306 to a dollar , the $ 1 bn translates into about N 306 bn .
The report said the N 306 bn lost to MSME - related corruption exceeded Nigeria ’ s capital expenditure on health and education combined for the four year period covering 2014 to 2018.
It said the N 306 bn lost by the country included missing and unaccounted funds disbursed to small businesses through legislators ’ constituency projects , the Cassava Bread Initiative and the various loans schemes such as the Micro , Small and Medium Enterprises Development Fund and the Agriculture Credit Guarantee Scheme .
The report read in part, “ Corruption is endemic within Nigerian government agencies meant to help MSMEs . Relative to their high costs, these agencies ’ programmes appear to help very few actual small people .
“ Instead , they are set up to fail, eroding trust in the government and functioning as conduits for embezzlement , contract fraud, deliberate waste and the distribution of political patronage.
“ Exacerbated by mismanagement and broader policy failures, this form of corruption has disproportionately high multiplier effects . It inflicts lasting damage and opportunity costs on a sector that employs 84 per cent of Nigerian workers and contributes about 50 per cent to Nigeria ’ s Gross Domestic Product.
“ Though difficult to calculate , MSME - related corruption has likely siphoned over $ 1 bn from Nigerian state coffers between 2014 and 2018. ”
Speaking on the report , Okeke stated that the destructive effects of corruption were limiting how much the MSME sector could contribute to the country’ s development .
He said unless the government reformed its programmes, the future potential of small businesses to boost GDP , reduce youth unemployment, generate tax revenue and stabilise post- conflict areas would remain limited.
He said , “ This type of corruption undermines small businesses ’ trust in the government and sows enmity between borrowers and lenders, making public - private assistance programmes less successful with each iteration .
“ Nigerian government agencies need to open up and more closely involve the organised private sector in the planning and implementation of MSME –focussed programmes. ”
The Chairman , Abuja Chapter of the National Association of Small and Medium Enterprises, Abiodun Ihebuzor , said that based on the findings of the report , there was the need for the government to start redefining how its intervention programmes were managed .
He said without redefining the programmes, the country would not feel the desired impact regardless of the amount of financial support to the MSMEs .