How FCT’s enterprise agency supports SMEs, disburses CBN funds

It is admissible that a strong Small and Medium Enterprises (SMEs) sector is fundamental to the economic prosperity of any nation, particularly growing economies like Nigeria. SMEs have helped countries in Europe, America and Asia to transform into strong competing economies.

SMES as defined by the National Council of Industries refer to business enterprises whose total costs, beside land, are below N200 million. But Africa in general, and Nigeria in particular, is yet to seriously exploit and support this important sector to grow the economy, despite being a huge contributor to employment and Gross Domestic Product (GDP).

Latest report by ‘’Sustainable Entrepreneurship and Economic Development Initiative (SEEDI) revealed that Nigeria has lost over $1billion to corruption –related Micro, Small and Medium Enterprises (MSMES) programme in the last four years. The report stated that the amount exceeds Nigeria’s capital expenditure on health and education combined for the period covering 2014 to 2018.

The report tittled: ‘’Stolen Dreams: How Corruption Negates Government Assistance to Nigeria’s SMES’’, was produced and launched on May 22, 2019, in Abuja, by the Carnegie Endowment International Peace, in collaboration with the Open Society Initiative for West Africa (OSIWA).

There is no doubt that SMEs in Nigeria has performed below expectations due to a combination of factors, ranging from attitude and habits of operators themselves, environment-related challenges, inadequate government support and inconsistency, difficulty in attracting financial credit or resources and frequent government policy changes. There are also cases of huge funding gaps for the SMEs in the country.

Determined to support this all important sector of the nation’s economy, the Federal Capital Territory (FCT) administration moved ahead to establish the Abuja Enterprises Agency (AEA) in 2005, which was officially commissioned in 2006, to deal with these myriad of problems.

Over 14 years of its establishment, the Agency has focused on the development and promotion of Micro, Small and Medium Enterprises within the FCT, aimed at supporting existing and new entrepreneurs to overcome obstacles through access to finance, proper business planning, developing entrepreneurship skills and suitable work-space for clients.

The AEA Vision and Mission statement is to be the symbol of entrepreneurial development in Africa and to provide excellent support to entrepreneurs by developing relevant programmes and statistics to start and nurture businesses..Its objectives among others includes, championing the awareness of the importance of entrepreneurship within FCT, provide excellent support services to new and existing businesses, encourage and promote ethical business practices amongst the local business community, facilitate or provide workplace for new and growing businesses.

Others are to facilitate access to finance for visible business proposals, support business to overcome barriers imposed by bureaucratic bottlenecks as well as encourage and promote the use of technology.From May 2015, to December 2018, it has trained and empowered 3,141 entrepreneurs in the nation’s capital to venture into businesses of their choices. Also, a total of N2.035 billion was released to support their start-ups.

In a bid to maximize its mandate and take entrepreneurship to every nook and cranny in the FCT, the agency proficiently sets up a liaison office in Gwagwalada Area council. The office is expected to serve the people of Gwagwalada, Kwali, Kuje and Abaji axis with the intension of ensuring that Entrepreneurship Development reaches the grassroots across the territory through its programmes and activities.

The Managing Director of the agency, Arabi Muhammed Tukur, at a graduation ceremony for capenter, in Abuja, said: ‘’This training and indeed many others that were conducted, came out of the administration’s desires and commitment to build the capacity of Abuja residents to start and successfully run their businesses.

“The training programmes covered two important aspects that guarantee a successful business, namely, an entrepreneurial course and skills acquisition course.”He called on job seekers to come forward and grab the opportunities inherent in the agency not only to be self employed but also to become employers of labours.

The agency has similarly approached the International Labour Organization (ILO) for possible entrepreneurial opportunities and collaboration for the promotion of entrepreneur. In a visit by the management team of ILO to project sites of the “One Village –One Product” (OVCP) Shea Butter Processing Centre in Nuku and Rimba Communities in Abaji Area Council, the cassava processing centre in Chukuku Community in Kuje Area Council, as well as in the FCT Micro Finance Bank in Kwali, the group, led by the Country Representative to Nigeria, Denis Zulu, expressed readiness to partner the FCT through the agency to further promote and facilitate technical and social support.

The agency has immediately expressed interest to work with ILO to develop relevant programmes and activities aimed at stimulating and nurturing SMES with provision of excellent support service for existing and new businesses.

The agency has also developed strategies that will minimise funding challenges facing the SMES and therefore, established platforms that can avail Entrepreneurs financial windows to access funds easily for their business.The agency has created several opportunities for the SMES in the territory to access the N2 billion Small and Medium Scale Enterprise facility of the Central Bank of Nigeria (CBN), following the singing of Memorandum of Understanding (MOU) between the apex bank and the FCT.

Already, AEA has vowed to support over 2000 businesses yearly in areas of capacity building, information, sensitisation on best business practices, as well as advocacy.A beneficiary, Bello Rasaki, said the agency’s trainings are not only effective, but efficient and all encompassing, adding that would-be beneficiaries need to put up a very detailed proposal on the business venture they go into before getting their support.

According to him, the agency will not just give people money and leave them to their fate, but would continually visit, mentor and monitor every progress made, as soon as loans are disbursed. Rasaki said he was fortunate to enroll with the agency between 2015 and 2016 through CBN’s Anchor Borrowers Programme, adding: “After undergoing the trainings, I was initially given the sum of N800,000 and my wife N1million for a start-up business. I immediately established “Ochobaye Nigeria Limited”, a company that is into Laundry, Tailoring, Sale of Unisex Materials/ Saloon, Car Wash, Fashion, Transportation’’ with a running office at Garki 2 Market Abuja.

He confirmed that he has 20 staff on ground and another 30 indirect staff on daily payments, stressing: “I have employed a manager and an accountant in my company. After the first disbursement, I went back to the agency in 2018, for another funding of N2million, while my wife equally received N1.5 million. I can beat my chest to say my company today is worth over N100 million.”He maintained that his success story rely mostly on God’s grace, as well as his management skills as a qualified accountant, noting that more importantly, the grace period of six months given by the agency before liquidating the loans played significant roll.

On Challenges, Rasaki said poor electricity supply has forced him to buy a standby generator running with diesel, which has continued to eat deep into the resources of his company.‘’You can imagine buying diesel everyday to power the saloons, car wash and laundry. All these involve money, coupled with the challenge of taxations. I pay different taxes to the three tiers of government in FCT. This is also very worrisome,” he said.

Also narrating his experiences with the agency, Mr. Chibundu Godfrey Emeka told The Guardian that the trainings and financial lifelines have positively affected the lives of several people, especially youths in Abuja.“I am one of the beneficiaries of the agency’s assisted programme in 2016. After my trainings on ‘Mother Care’ business, I was initially assisted with a sum of N500,000. Today, I am a proud owner of Emitobloz Enterprises Limited located here in Abuja.

“I never dreamt of owning a company in my life, but for the agency. As we speak, I have engaged one person, while I equally have several others that are assisting in our distribution chains’’, he said.He listed some of the challenges facing his business to include, breakdown of distribution vehicles due to road networks, while causing delays in reaching suppliers and buyers, as well as high cost of rents.

“AEA has not only helped me to be on my feet, but has assisted me to become employer of labour and my advice to people outside there is to take the advantage available at the agency to improve their lives,” he added.However, a block molder and supplier, Malam Suleiman Abubakar, told The Guardian that he refused to seek assistance from the agency because of the poor business environment across the country.

“My fear to seek the assistance of the agency is quite simple. It will be difficult for me to pay back my loan because the building industry in totality is dead, especially here in Abuja. People have lost their jobs, so they cannot build houses and if houses are not being built, I will not sell. How then, will I pay back my loans?” he queried.