Over the last two months, Muyinat Ajibulu, 50, has been utterly distraught with her unsuccessful attempt to access the federal government’s Trader Moni loan.
Ajibulu was enumerated in September and received a message congratulating her that her loan was ready for collection around 3:17pm on October 11 from Aku, a mobile money outlet assigned to manage the disbursement process of the loan.
In the message were instructions on how to get the N10,000. But shockingly, she received another message notifying her of fund transfer to a strange account two hours later and that was the last she saw of the loan.
Ajibulu believes she has missed her share of the recovery from ex Nigerian military dictator Sani Abacha’s loot being shared by the government to help the poor bottom-level people in business like herself.
“Others have received the money and are rejoicing. I want to rejoice as well. With it, I can buy a bag of salt at N3500 and gain almost N2, 000 from it. I don’t plan to return any money. I may when I get the next one,” she explained.
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`Ajibulu is just one of the several market women at Mushin, embittered for being schemed out and shortchanged by agents working with the Bank of Industry to distribute the loan. Owing to their lack of account holdings with banks, some were forced to strike a 50/50 deal with agents to receive N5, 000 while others had to consent to a 70 to 30, 90 to 10 and worse of all 95 to 5 sharing formula.
Non-collateralised loan is what the government says it is but on the market streets of Mushin, Ketu, Abule-Egba and Ikotun among others, the common impression is that the money is free and synonymous with the “stomach infrastructure concept”.
The trend has stirred questions on the modalities intended to be used in recouping the loan when most of the recipients appear to have no formal record or ability to be tracked.
“It is controversial; in light of ongoing politicking,” Rafiq Raji, chief economist at Macroafricaintel told BusinessDay. “Cash-transfer type poverty alleviation programs have worked in Brazil. The problem is that the political connotation is hard to argue against; due to the timing.”
Launched in August through the Bank of Industry (BoI) under the Government Enterprise and Empowerment Programme (GEEP), the ‘Trader Moni’ is a social intervention programme of the President Mohammed Buhari’s administration designed to eliminate the hurdles to accessing financing for the vast majority of Nigeria’s petty traders, Laolu Akande, the spokesman to the Vice-President Yemi Osinbajo told Business Day.
Under the scheme, traders, he said, don’t need any document or property to obtain the N10, 000. They only need to register, get captured and receive the money through their phones. The repayment plan is for six months and beneficiaries are expected to pay a paltry N250 interest on the N10, 000 before qualifying for a higher loan.
According to Akande in a tweet on VP’s visit to Bodija and Oje markets, Ibadan to monitor the progress of the scheme, the loan has been disbursed to over 1 million Nigerians with the target being 2 million by the year end.
He debunked the widespread accounts, saying that the fund is neither a product of Abacha loot nor a strategy for inducing political sympathy towards President Buhari in the 2019 elections.
“The specific Abacha loot is $322 million that was returned from Swiss government to us. But this is targeted at conditional cash transfer. The social intervention of the Buhari administration has four categories and there is the conditional cash transfer where we pay N5,000 per month to the most vulnerable and poorest among us,” he said.
“The Trader Moni comes under the Government Enterprise and Empowerment Programme which is a micro-credit scheme and it is funded by the budget. We have a N500 billion budget that covers the entire social investment programme in the last two to three budget cycles. As to the timing, we conceived it alongside market money under the GEEP in 2016. We have four years to deliver. If you go back to check, these programmes started in 2015 with GEEP.”
However, what transpires between the Trader Moni agents and the traders at the point of collection leaves doubt as to whether the government truly designed the fund as a loan.
Most of the traders who were successful at obtaining the fund, Business Day observed, had similar pattern of actions upon receipt. They addressed first their pressing domestic needs at the period of collection. And given that they have no bank holdings, third party account details were predominantly used for withdrawal, giving room for extortion from agents.
Speaking on how she utilised the loan, Muyinat, a noodles seller at Ojuwoye said: “I received complete N10, 000 and it came at a period when I needed money. In spent it on feeding and transportation because I stay far from the market. I spend N600 daily from Sango to Mushin.”
Nigeria emerged from a devastating recession in 2017 but growth has yet to return to levels seen between 1999 and 2014. The economy expanded by 1.81 percent in the third quarter of 2018 (1.75% for Q1 – Q3), the National Bureau of Statistics (NBS), said on Monday, lower than the annual rate of population growth of about 3 percent.
GDP per capita in Nigeria is forecast by the International Monetary Fund (IMF) to fall for eight straight years (2015-2022), contradicting the government’s expectations for a steady rise from $2,542 in 2017, $2,640 in 2018, $2,731 in 2019 and $2,854 in 2020.
In actual terms, GDP per capita has fallen four years straight, having gone from $3,268 in 2014 to $2,763 in 2015 and $2,207 in 2016. In 2017, income per capita fell by 10.7 per cent to $1,994.
When widowed Idayat Raheem, a steel pots hawker at Oko Oba Market, Abule-Egba received N9, 000 (following a deduction of N1,000 by agents), she was homeless and passed the nights at a nearby mosque. After the demise of her husband, she couldn’t raise rent of the one room apartment she lived in but on receiving the money, she began processing a new one.
Maryann Anyawu, an agent confirmed the commission recipients often pay, saying “they are not supposed to return the money. This is how we do it. We first transfer the money to our own accounts and then withdraw for them. This is because after doing it for them, they promise to pay N1, 000 but fail to redeem their pledge afterwards”.
Unlike others, Tawa Kazeem, a pepper seller at Ketu market feels the initiative is laudable as it has been useful for her business, she only wishes it was more because N10,000 can hardly afford a basket of tomatoes.
“The money can’t buy a basket of tomatoes which is N15,000 and there are times I record losses. People are just managing. There is lack of money. Before, I could make gain of about N16, 000 or N17, 000 from a basket but now, I struggle to even hit N500 profit,” explained the mother of six from Ikire, Osun state.
Atoke Sulaimon, a smoked fish seller at Abule-Egba shares the same sentiment with Kazeem. “There is hardly a huge impact that N10, 000 can make in our business because things are too expensive,” she said.
According to financial and business experts, schemes that throw money at the masses for buying and selling purposes rather than for productive purposes achieve minute or no result in stimulating the economy.
Even while he agrees that the initiative, if well implemented with the right technicalities could boost the economy, Abayomi Obabolujo, a business analyst said the mechanism for disbursement only presents the loan as dividends of democracy.
“When you give N10, 000 to a trader, the question you should ask is that what does the fellow want to do with the money. Let’s assume that the person sells pepper in Nigeria today, what quantity of pepper can the person sell for N10,000 and what is the profit element? The probability is that most of the people that are being given the money will end up spending it at onexpenses. You don’t just start giving people loan. What is the structure that has been built for the business that the money is being given and how long has the person started the business? These are critical questions to really put into consideration,” he said.
Obabolujo suggests that social interventions should target people in the productive sector if Nigeria is determined to lift the economy out of being in excessive reliance on consumption of imported items.
“You see people in Nigeria that are making shoes on their own and these shoes are beautifully designed. These are the people you should empower so that when they are empowered, we don’t need to go to Italy to buy foreign shoes again. And you look at people that are even farmers, fashion designers and people that are producing something,” he said.
Correspondingly, Austin Nweze, a political economist and lecturer at the Pan Atlantic University, believes loans like Trader Moni achieve less impact with necessity entrepreneurs compared with opportunity entrepreneurs.
For him, businesses that are incapable of creating jobs or paying taxes cannot grow the economy. As such, the categories of the businesses targeted by the scheme are motivated mainly the needs of daily survival and hardly contribute meaningfully to the economy.
“Opportunity entrepreneurs are those who conceive ideas, have a plan on how to employ other people, organise their businesses, pay rents and pay government. This way, they are able to really contribute to the economic growth. They have not told us the truth. It is free money. What can you do with it? Even if you buy recharge card to sell, how will it impact you?” Nweze said.
His recommendation further touches on the need for government to intensify the improvement of the ease of doing business in Nigeria. With stable electricity, road infrastructures and creation of industrial estates, big business can be more confident to invest and it will trickle down growth to the lowest in business cadre.
“When I went to South Africa looking at business opportunities, they showed me an industrial area which the government did with water, electricity, roads and all I needed to do was to bring in my equipment and I would not pay tax for 5 years but employ their people. The employees will pay tax. If you improve on the ease of doing business, every body will benefit,” the economist explained.
