GEM Project: Ben­e­fi­cia­ries Cry Out over FG’s De­lay in Funds Dis­burse­ment


A group of small and medium en­ter­prises (SMEs) who are ma­jor ben­e­fi­cia­ries of the Growth and Em­ploy­ment (GEM) project, a World Bank/DFID funded project, su­per­vised by the Fed­eral Min­istry of In­dus­try, Trade and In­vest­ment, have called on the fed­eral gov­ern­ment to re­lease the sec­ond tranche of the pay­ment that was long over­due, to en­able them re­vive their busi­nesses that are on the verge of col­lapse.

The SMEs, num­ber­ing over 300, ex­pressed fears that their in­di­vid­ual busi­nesses, es­tab­lished last year with the sup­port of the Fed­eral Min­istry of Trade and In­vest­ment, may suf­fer to­tal col­lapse, should gov­ern­ment con­tinue to with­hold the sec­ond tranche of funds dis­burse­ment to them.

The fed­eral gov­ern­ment, through the Min­istry of In­dus­try, Trade and In­vest­ment, last year, as­sem­bled a crop of SMEs num­ber­ing over 300 and promised to as­sist them set up cot­tage in­dus­tries by em­pow­er­ing them through the World Bank/DFID funded project for SMEs.

The essence was to pro­vide the SMEs with seed-fund­ing and mon­i­tor their busi­ness growth over a pe­riod of time. The SMEs, which were drawn from the YouWiN project of the Fed­eral Min­istry of Fi­nance, signed agree­ment with the Fed­eral Min­istry In­dus­try, Trade and In­vest­ment in March 2016, in or­der to ben­e­fit from the GEM project. Price­wa­ter­house­Cooper (PwC) was ap­pointed grant ad­min­is­tra­tors and KPMG, the mon­i­tor­ing and con­trol body for the GEM project.

Some SMEs who spoke to THISDAY about their chal­lenges with the GEM project, said the min­istry, in July 2016, paid each SME be­tween 25 per cent and 60 per cent of the to­tal cost of fund­ing their busi­nesses, amount­ing to about N3 mil- lion to N10 mil­lion as the first tranche with a pledge to pay the sec­ond and fi­nal tranche after 90 days from the date of the ini­tial pay­ment.

The SMEs said the sec­ond tranche of the pay­ment was sup­posed to be in Oc­to­ber 2016, but 10 months after, it has not been paid. They ex­pressed con­cern that the de­lay is threat­en­ing their busi­nesses, as they have in­vested huge sums al­ready.

Ac­cord­ing to the SMEs, be­cause of the long de­lay in pay­ment of the sec­ond tranche, over 80 per cent of them bor-

rowed from bank to in­vest in their busi­nesses, pend­ing when the sec­ond tranche would be paid.

Nar­rat­ing their or­deals, they said they were al­ready in­debted, hav­ing in­vested in equip­ment and raw ma­te­ri­als and could not con­tinue with the busi­ness for lack of funds. Some said their rents for their cot­tage in­dus­try space had since ex­pired and the land­lords are threat­en­ing to quit them.

They also ex­plained that they have lost con­tact with the Fed­eral Min­istry of In­dus­try, Trade and In­vest­ment, since their lines of com­mu­ni­ca­tion were no longer go­ing through, de­spite sev­eral tri­als to reach the gov­ern­ment of­fi­cials on phone.

They called on the fed­eral gov­ern­ment to in­ter­vene and com­pel the of­fi­cials of the Fed­eral Min­istry of In­dus­try, Trade and In­vest­ment, to pay them the sec­ond tranche of the funds with­out fur­ther de­lay. “The ma­chines al­ready bought for pro­duc­tion are wast­ing away and we are ow­ing rents and salaries of em­ployed work­ers,” the SMEs told THISDAY.

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