…where did N2.5 Billion counterpart fund go?
By Ukpong UKPONG
When Pastor AkpanI., vacatedhis office at industrial complex, Agbor Hill, Aba, Abia State in 2012, he did so convinced that relocating toAkwaIbom State hasa better prospect especially as his state government was taking definite steps toward industrializing the state, pledging to provide low interest loans to small, medium and large scale entrepreneurs.
Akpan, opened shop in the Technology Incubation Centre, IbesikpoAsutan and registered witha cooperative society as well aswiththe state chapter of National Association of Small Scale Industrialists, NASSI, expecting that funds will soon be made available to expand his small scale household reagents and cosmetic industry.
Unfortunately, after almost four yearsof dwindling cash flow and several failed attempts to access BOI loan, he is wondering whether he made the right decision coming back.Meanwhile, he is struggling to shore up funds to meet orders for his products, includingone for 250 cartons of hair shampoo and conditioner from costumers in Niger Republic.
Many SMEs in the state, like Akpan, are coming to terms with the sad reality that after the furry of activities, which greeted former GovernorGodswillAkpabio’spolicy pronouncementto build at least 31 cottage industries across the local government areas and assist small, medium and large scale investors take root in the state, there is apparently a complete change in approach towards achieving industrialization by his successor, GovernorUdom Emmanuel.
While nothing has been said about the fate of AkwaIbom Investment Corporation, AKICORP,which drove the industrialization policy thenor the Memorandum of Understanding, MoU, signed between state government and Bank of Industries, BOI, another entity called AkwaIbom Entrepreneurship and Employment Scheme, AKEES, is currently trending.
However, going throughAKICORP’s “AkwaIbom Industrialization Road Map”,shows the Corporationhad gone quite far in attracting funding for industrialization up to the level of collaborating with Bank of Industry (BOI) to take advantage of Federal Government Matching Grant Policy for onward lending to entrepreneurs with factories located in AkwaIbom State.
The said fund would provide soft loans to entrepreneurs at a single digit interest rate upon registration with cooperative society or manufacturing associations and payment into an Escrow Account with the Bank of Industry or any approved commercial bank, the equivalent of 20% of the total project cost, which amount would be used as working capital.
Subsequently, former GovernorGodswillAkpabio, on behalf of state government, signed anMoU withthe Managing Director of Bank of Industry, Ms. Evelyn Oputu, which required government to deposit the sum ofN2.5billion while the BOI would match it with another N2.5billion, pooling a total sum ofN5billion.
State government took pains to incorporate its investment agency,produced a fantastic ‘road map to industrialization’, rolled out the processes of mobilizing and registering SMEs across the state, undertook collation of data, set up training workshops andcreatedpartnership among entrepreneurs as requisite to accessing Industrial fund.
Then, it suddenly stalled at paying its share of the counterpart fund. More curiously, that same year (2013),the state increased its budgetary allocation for ‘industrialization’ almost twofold. So, what happened to the fund captured in the 2013 budget for that purpose?
Inquiry, at the zonal office of the Bank of Industry, BOI, in Enugu, confirmed that AkwaIbom state government did not pay its N2.5 billion counterpart fund. An officer of the bank, who requested that his name should not be mentioned, disclosed that the bank is still interfacing with state government on the issue.
“We are convinced that SMEs,in AkwaIbom like other states, stand to gain much from our single digit loan and technical support, which may not be available anywhere else”, he said.
Further investigation corroborated earlier findings that thecounterpart fundwasappropriated in the 2013 budget. The 2013 budget tagged “Budget of Consolidation and Industrialization”, indicated a 150% increase in industrialization funds, from N2 billion in 2012,to N5 billion.
In that same year, which the MoU was signed, the then Finance Commissioner, Mr. Bassey Albert,defended the remarkable increase in industrial fund, sayingit was to assist genuine entrepreneurs in the state to expand their industrial concerns. Eventually, the state appropriation bill for that year was passed into law by the state legislature without a hitch.
The question is whether that fund was misappropriated. This is a puzzle, which the then Chairman, AkwaIbom State House of Assembly Committee on Finance and Appropriation, now the Speaker, BarristerOnofiok Luke, shouldexplain. It was his job to perform an oversight to ascertain whether this money was paid or not.
Unfortunately, the Speaker could not be reached and his Chief Press Secretary, Mr. KufreOkon, refused calls to his mobile phone and text messages sent to his phone, seeking clarification on the matter.
Another twist in the story is thatgovernment would do nothing about the apparent cover up and as far as the present administration is concernedinformation about such transaction is missing.
Furthermore, justas many programmes and projects of the last administration arebeing probed silently, the MoU with BOI is being reviewed to ascertain how much it offers AkwaIbom SMEs or whether the state needs such partnership at all.
The current Commissioner for Finance, Mr.AkanOkon, while interacting with Independent Newspapers Publishers Association, INPA, in his office recently, revealed that although government is presently disbursing the CBN loan for SMEs, the issue of counterpart funding with Bank of Industries, is ‘being looked into’to ascertain if it meets the financial needs of SMEsin the state.
“It can’t be that our need is N1million and we pay counterpart funding of N100million or that we pay N50million”.Okon also pointed out that loan from BOI, is meant to assist viable businesses that can pay back and is limited by a ceiling unlike the CBN programme.
As it stands, Pastor Akpan and other SMEs are left with two options, either theylet go ofthe MoU with BOI, get themselves acquainted with the ‘new’ industrialization policy of the present administration and begin the process of seeking government finance all over again or face the harsh prospect of struggling to float an industry alone.