The Federal Government has itemised plans to support small businesses through guaranteed offtake, intervention, and regulatory supports.
The government stated this in a post-COVID-1 9 policy paper seen by SMARTPRENEURS. The document titled, “Bouncing Back: Nigeria Economic Sustainability Plan,” released last week.
The plan is an aftermath of the health and economic emergencies caused by the COVID-19 pandemic as ordered by President Muhammadu Buhari in March 2020.
According to the policy, there are several tracks through which the Government will be supporting micro, small, and medium enterprises to enable them to respond to the economic challenges of COVID-19. These are:
The purpose of the Guaranteed Off-take Scheme for MSMEs is to safeguard 300,000 existing jobs in 100,000 MSMEs (impacting 1,000,000 individuals) and sustain local production.
The scheme will function by the government making arrangements to purchase specific priority products made by MSMEs. To ensure value for money the process for such supplies will be a bidding process.
The scheme will ensure that small businesses do not fail and thus ensure that the jobs in the MSME sector are not lost to the global and national slowdown in economic activity.
Payroll support to designated sectors: The scheme is a conditional grant to support vulnerable SMEs in designated vulnerable sectors in meeting their payroll obligations and safeguard jobs from the shock of COVID-19.
The scheme will seek to support 50,000 SMEs employing a minimum of 10 employees and a maximum of 50 employees each. Designated vulnerable sectors include hotels, creative industries, road transport, tourism, private educational institutions, etc. Interest-free credit to artisans: In addition, a further scheme to support daily-paid and self-employed workers and artisans through the provision of interest-free credit to be disbursed through micro-finance and fin-tech credit providers.
Support to the Road Transport Sector: To cushion the effects of social distancing, further support will be provided to the road transport sector in the form of direct grants to transport workers and businesses to support this sector which enables a significant proportion of commercial activity.
This track is an initiative to be led by the Bank of Industry (BOI) to provide support to key sectors impacted by the pandemic such as Healthcare; Agro-Processing; Creative Industry; Oil & Gas; female-owned businesses. Preliminary engagements have been undertaken with the private sector to identify interventions required.
1. Credit facilities that support their working capital and expansion of existing production facilities
2. Credit remediation support e.g. tenor extension, loan restructuring, moratoriums, etc.
3. Support for working capital facilities and term loans to finance expansion requests. Given its structure, BOI as a fund manager is able to provide tailored lending solutions across the value chains of these affected sectors i.e. to micro, small and medium enterprises as well as large corporates.
This track is a practical and immediate response to micro and small businesses to support resilience and ensure continued local production and cushion the effects of the pandemic.
The measures introduced will reduce product registration and renewal tariffs with the National Agency for Food and Drug Administration and Control (NAFDAC).