Building the economy, one graduate at a time
The unemployment rate in Q4 2016 rose to 14.2% from 13.9% in Q3 2016 and 10.4% in Q4 2015.1 As a result, more people engage in one form of business or the other to keep body and soul together. These businesses are grouped according to their activities and sizes and are referred to as the micro, small and medium (MSME) businesses. According to a McKinsey report, there is a high density of MSMEs in Sub-Saharan Africa totalling about 14 million in number.2 When some of these businesses were analysed, it was found that electricity and access to funding were their most pertinent challenges. Therefore, organizations like the World Bank, Africa Development Bank, Bank of
Industry and many others are providing funding, especially suited to meet the needs of these businesses.
Though small, MSMEs fill a huge void in the Nigerian economy and are perhaps the most important enterprises. Nigeria has a peculiar business terrain where challenges such as difficulty in accessing bank loans and financial aids from other institutions, corruption, and the high cost of doing business abound. Also, due to little exposure to technology and low production capacities, most of the activities of these MSMEs are labour intensive.
To address these issues and malaise in the system, the Bank of Industry (BoI) has set up target funds like the Two billion naira Graduate Entrepreneurship Fund (in partnership with National Youth Service Corps) that focuses on supporting fresh graduates of higher institutions to start up new businesses and expand existing ones. The fund provides access to capital and creates self-employment opportunities for thousands of young graduates in the country.
Olagoke Oladoye, CEO of Ghoges Farm is a graduate of Zoology from Obafemi Awolowo University, Ile Ife who is passionate about livestock – a passion he had developed since childhood while taking care of the birds in his mother’s poultry. In his 2nd/3rd undergraduate year, he was introduced to fish farming and processing and he saw the economic viability of fish farming. He then started his fish farming business solely from funds disbursed from the Graduate Entrepreneurship Fund which he qualified for. Opportunity met preparation as his idea to become a fish farmer was matched by the funds and structure provided by BoI.
He feels the impact provided by the BoI fund is enormous. “Nigeria’s population is huge, and our infrastructure cannot support our growth. We need entrepreneurs to create jobs for other people. Ghoges farms currently sells the cheapest smoked fish in the market. The products are clean, stone-free and delicious. The fish is very cheap, and the orders keep coming in. When there are large orders, we employ ad hoc staff who come to the farm, work for a stated duration and get paid.”
His advice to unemployed graduates is to apply for the fund and with the disbursement, start their business and be committed to making it profitable. “Starting a business begins from having an idea and being passionate about it. Any idea that adds value can be monetized.
The economic impact of the fund in Nigeria reduces the unemployment rate, balances the flow of cash in the system as money flows to the farmers who sell raw materials, and to manufacturers who produce machinery as well as consumers who buy the final product. The income obtained from the farm is used to service the loan at a 9% interest rate”, he added.
However, he feels the interest rate of the graduate entrepreneurship fund should be reduced to 5% because of the harsh economic situation in the country. As more entrepreneurs in different sectors access the funds and grow their businesses, more people are employed, and the economy is impacted for the long term. Oladoye recently acquired five hectares of land for vegetable farming at Iwo, for tomato production and processing. Subsequently, he plans to relocate Goghes farm to Iwo.
It may seem impossible but there are still many unbanked and undocumented micro businesses in Nigeria. The BoI is aggressively changing that situation by building trust in the marketplace through the creation of schemes that are serving these businesses and encouraging growth, scalability, and sustainability.
The Graduate Entrepreneurship Fund is an initiative of the Bank of Industry to empower Nigerian youths to become self-reliant and sufficient upon the completion of the mandatory NYSC scheme.
1 Unemployment Statistics Report, June 2017 courtesy of National Bureau of Statistics (NBS).
2 Study published by IFC and McKinsey & Company in 2010: “Two Trillion and Counting”.
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