CSNAC petitions EFCC, seeks investigation into disbursement of Micro, Small and Medium Enterprises Dev. Fund
Posted by News Express | 19 February 2017 | 1,940 times
•CSNAC Chairman Olanrewaju Suraju.
The Civil Society Network Against Corruption (CSNAC) has urged the Economic and Financial Crimes Commission (EFCC) to investigate the Central Bank of Nigeria (CBN) disbursement of N220 billion to the Micro, Small and Medium Enterprises Development Fund (MSMEDF).
In a petition forwarded to the anti-graft agency and signed by the coalition’s chairman, Mr. Olanrewaju Suraju, CSNAC said there are nagging questions as to the performance of loans attached to the funding arrangement.
The petition, a copy of which was made available to News Express on Sunday, reads: “The Central Bank of Nigeria in recognition of the significant contributions of the Micro, Small, Medium Enterprise sub-sector to the country’s economy in 2013 launched the Micro, Small and Medium Enterprises Development Fund (MSMEDF) as part of its developmental functions and mandate of promoting a sound financial system in Nigeria.
The major objective of the fund was to address the huge financing gap which hinders the development of MSMEs in the country. The fund was aimed primarily at providing for the wholesome funding requirements of Micro Finance Banks (MFBs) and Micro Finance Institutions (MFIs).
“On the whole, the fund sought to achieve the channelling of low interest funds to the MSME sub-sector of Nigerian economy through PFIs, so as to, enhance access by MSMEs to financial services, increase the productivity and output of micro enterprises, increase employment and wealth creation and, engender inclusive growth.
“A take off share capital of N220 Billion was to be managed and administered for the fund by the CBN under the terms and conditions defined in the MSMEDF guidelines (as revised in 2014).”
CSNAC, which attached a list of beneficiaries of the fund, further noted: “Initially, about a year after the launch of the fund by the immediate past governor of the CBN, Mallam Sanusi Lamido Sanusi, the bank signed a Memorandum of Understanding with 14 states for the fund’s disbursement under the leadership of Mr. Godwin Emefiele. However, there is still the nagging question as to the performance of loans attached to the funding arrangement.
“Reliable sources have made assertions to the effect that the fund may have been frustrated by State Governors who are sureties of the fund for their respective states, but are prevented from having control or access over disbursements, which is in line with the funding framework so as to ensure that payments are made directly to entrepreneurs and kept out of the reach of the governors.
“The governors are however required to get state assemblies’ approval as well as sign an irrevocable standing payment order to guarantee the repayment of the facility on behalf of their beneficiaries.”
Continuing, the anti-corruption network said: “It is observed with dismay that the State Governors’ defaulting on agreements have cast uncertainty over its disbursement. It was also learnt that by defaulting on counterpart funding agreements, some State Governors frustrated the efforts to provide seed capital and support to micro entrepreneurs and SMEs in their states.
“It has also been revealed that the CBN officials in charge of the said fund may have corruptly compromised in the procedures and requirements provided under the guidelines in the allocation of the fund. This is evident in the fact that some State Governors in the last administration accessed the fund directly by having the fund released directly to the state coffers in clear violation of the MSMEDF guidelines for disbursement of the fund which provides for only direct payments to entrepreneurs.
“Some of the said governors who craftily and fraudulently accessed the fund in collaboration with CBN officials had only a few months prior to the end of their tenures and thus were able to loot and mismanage the accessed fund to the detriment of the proposed beneficiaries.”
The petition reads further: “For example, sometime last year, media reports revealed the discovery by Kogi State Governor; Alhaji Yahaya Bello of a multi billion Naira fraud in the Kogi State Ministry of Commerce and Industry, associated with the Kogi State/CBN MSME fund, which was allegedly diverted by top directors in the ministry, albeit with the complicity of the former Governor of the State.
“The afore-described scenarios and revelations are pointers to the fact that all did not go as envisaged towards achieving the aims and objectives of the fund, especially with reports of breach of the guidelines and frameworks regulating the disbursement of the fund by CBN officials.
“It is in view of the above that we hereby request for an urgent investigation of your Commission into CBN’s fund disbursement and the utilisation of same by state governments who benefitted from the fund, in other to reveal and prosecute those who have corruptly flouted the law.
“We urge you to take prompt action in respect of the aforementioned issues to ensure that the attempts to revamp our industrial sector are not jeopardised and sabotaged to the detriment of our country’s economic development,” the petition read.