November 22, 2016


        This microfinance article is an excerpt from my upcoming book , AFROCENTRISM WORLD DEVELOPMENT IDEOLOGY AND AGE OF MICROFINANCE
The principal problem associated with development is the issue of capacity .By building  adequate capacity  development can not only be created but also sustained in the long run .Investing in capacity building is equivalent to nation building in the long run which depends on the enterprise of capacity to sustain polity and then nationhood by creating national wealth that outlived its times as the legacy of posterity  .A thorough adoption of this simple formula is a tested roadmap and a reliable  transition towards the end of poverty in the society of man .Developing adequate capacity  or sustainable capacity building is  a  foremost criteria to capital development .
As we earlier emphasized in the second chapter development is about  people and development means people . Jeffrey Sachs in his famous book The End Of Poverty …… to make it happen in our time observed that poor countries lack six major kinds of capital :
1.Human capital :this includes health  skills and competence needed to  make each citizen or influence economically productive .person ;
2. Business capital : facilities machinery and transport infrastructure needed in agriculture services and industry ;
 3. Infrastructure : Roads , rail water power  , telecom . , airports and seaports which are elementary outputs of basic development to promote mass development  and business productivity ;
 4 . knowledge capital :scientific and technological knowledge which can grow mass productivity is highly underdeveloped .This should  be nurtured for the promotion of production physical and natural capital ;
 5. Public institutional capital : Bureaucratic bottleneck and  distortion is a major bane . Commercial law , judicial systems , public sector services  and effective control that could ensure peaceful and   progressive division of labour  must be put in place to promote  mass development ;
 6 . Natural capital : arable land fertile ecosystems , rich soils and biodiversity. This provides ecological services needed by humanity for earthly sustainable living .
As we noted investment in people can take care of this responsibility and effectively manages these enormous assets for national development .That is the only challenge facing  the under developing nations  .The burden that this region has come to face is how to create wealth .In the World Bank report [‘where is the wealth of nations ? measuring capital for the 21st century ’]  , it showed that intangible capital is near to zero in the major oil countries like Nigeria ,Algeria and Venezuela   and often negative . The classic ‘resource  curse ’as noted by Auty and Gylfason [2001]  was also documented .
When Richard M. Auty first used the term resource curse in 1993 he used it to describe the recklessness of  oil rich territories and their failure to use their resources to benefit their economies and boost wealth generation and counter-intuitively had lower growth rate than countries without abundance of natural assets or natural resources  .Studies by Jeffrey Sachs Mark Warner among numerous literature have shown link between natural resource abundance and poor economic growth .
Empirical evidences abound . In the Opec  territory between 1965—98 per capital in this region decreased on average by 1.3 % whereas in the developing world grew by 2.2 percent on the average  [Akinjide:2006] .
 The World bank further find out that  What is the most important component of wealth creation across nations ? It also interrogates whether natural wealth increased or decreased as countries develop . O f course it does decrease as long as flaccidity matures or develops .Then it noted the top 10 wealthiest states such as Switzerland , Denmark –the food basket of Europe , Sweden , oil rich Norway , Luxembourg –Belgium , Austria ,France , United States and  Germany .Except for Norway none of this depended on natural capital or resource for national development since they utilized effectively the Sach’s golden formula [SGF/SAGOF] which has taken them half a millennium to nurture . Even for Norway where natural resources including oil and gas from the North Sea  constitute negligible 12 % of total wealth , her mainstay is  SAGOF  .
Whereas the bottom countries  such as Chad Madagascar , Guinea –Bissau , Nepal, Niger , Congo , Burundi , ,Mozambique Ethiopia and Nigeria which scored second to the last with Congo the percentage was noted to be horrible  .  For instance  in   a monocultural nation like Nigeria crude oil accounts for  over 70% of  its earnings  and 95 % of  export  receipts in a  country in which 98 percent are poor
Likewise in his book The Origin Of Wealth  Eric Beinhocker  also admitted what is generally accepted by all economists  that wealth is the product of  human efforts and labour using the sweat from our brows and the knowledge in our brains for cultivation and accumulation .In other words it is not investment in natural resources land geography and building  that is vital for national development per say   but in people .This investment in strategy and technology that boost growth  which can only be successful for the umpteempth  time by starting from  the grassroot empowering our people and opening up our communities for mass development . And that of all markets  in the country  human resource  or  labour market is the most maligned and abused  market .

We have repeated this several times that it is somehow baffling that virtually everything that comes out from developed world are consumed and imbibed  hook line and sinker without remorse and without  reflection  or shame by the developing world including its  form of government we have adopted today which as claimed is symptomatic of development .Whereas democracy as they claimed being the best form of government is easily contended on the ground that it is  not a foolproof or  an arbiter  that represent mass  development in the longer term. These are the two poles entirely  clashing each other .Normally democracy is meant to promote development if not it should be abrogated for a better alternative . How can we make democracy work ? Does it seem an alternative not workable or exist ? Let us first look briefly at the politics  and  antecedence of democracy in the developing world .
The Greek writer Aristotle in the  4th century B.C. , noticed these types of government :-- where power is held by one man is called monarchy ; where power is held by a few is called Aristocracy ;where power is held by the mass of the people ,this  is democracy .These forms according to Martha Stewart in The British Approach To Politics are described as mere  appearances rather realities and these types in order of sequence could be fronted for by the following : tyranny ,oligarchy and ochlocracy . Infact oligarchy or ochlocracy brazenly  fronts  for democracy in virtually in every developing society while the capital  ‘word’ lives in limbo . Every form of government can be  good and can be  bad it all depends on the human system which will drive the governance system and  chains . When the power belongs to the mass of the people they called it democracy but oligarchy in the same polity has conned the good aims of democracy if any and hence retards development that democracy is supposed to promote. Hence democracy in the 3rd world must scraped or revamped for it to be effective . If not a good alternative should be  found . . 

A media writer once argued the latter  position that democracy retards development .I  think the truth  is the most profound around .Definitely it is . He argued the thesis that the developing  region needed development rather than democracy was a brainchild of the  post war period waxed strong in the 70s when the cold was at its peak .Samuel Huntington  and a group of American political scientists argued volumes that democracy or undesirability of democracy for a country that have not  reached a particular level of   economic development .On the other hand they also argued what developing countries needed was good governance backing it up with appropriate data and historical instances . Writing in democracy and development Sola Fasure at defunct Comet [now The Nation ]  commented ‘ when the cold war ended the argument changed ’and the consensus was that democracy is good for every body .. But he bungled a good argument that ‘the lies and propaganda of the past will simply not go away ’ .Were they truly lies or propaganda because democracy did fail to promote absolute development .
We assess democracy by  global appeal  spread  and impact . The growth of democratic institutions that started in mid-70s spreading wildly over the  next  two decades  into Latin America former Soviet region and the SSA region in its third wave as coined by Huntington suddenly grounded to a halt .According to freedom house a democracy watchdog there were 118 electoral democracies in 1996 around the world .Almost a decade later they  were 117 in relative proportions rated free partly free or not free were static since the 90s
Usually in the 3rd world the impact vs. development is close to zero because structure to make democracy  effective if at all indeed vital to development is grossly missing .The democratic interest had persisted but development in this region had stalled and  the grand hopes have not been realized  .Several years ago the former soviet had gone from frontier land of democracy to waste land  within a decade The south American experiencing crisis of democracy from weak state institutions to corrupted political elites  .Some reports argued 15 -20 years after the gains of political freedom personal security economic well fare were not better than in the previous period .
Africa is still the basket  case of democracy unworkability in which authoritarian democracies have failed . This is working perfectly in the former soviet block-mainly Russia  and especially East Asia  and including China North Korea , Vietnam , Laos  and Singapore . These are some of the world fastest growing economies . Majority of African countries have slumped further into poverty and gross underdevelopment in which every form of government has failed . The human system or institution  is the major problem. 
There is no doubt that  western Democracy foisted on the developing region has grossly under-performed and heavily retarded development as they failed to invest in their people ballooning mass poverty .We need not be deceived  . This is simple .In 1992 before an audience in Philippines  .Singapore ’ s Lee kuan Yew  remarked ‘I do not believe  that western democracy  leads to development . I believe that what a  country needs to develop is discipline more than democracy ’ .And good governance is a function of the relative stability of political discipline that is mature enough to curb the excesses of democracy that disrupts the flow of development to the people .He observed  ‘the exuberance of democracy leads to indiscipline and disorderly  conduct which are inimical to development ’.
It is no longer news that this belief transformed Singapore preaching new ideology  and consolidating this fact that each  nation must determine the nature of development model and pattern that suits its economic climate and demographic institutions .The belief in the superiority of governance in the case of India –the world largest democracy and the Asian tigers .The three authoritarian democratic states between 1960---1987 , grew at astonishing rate of 6.4 % per capital whereas the liberal democracy in spite of its highly educated and  committed leadership still  recorded a paltry 1.9 percent per capital and western style democracy has dampened the possibility of  radical changes in favor of the poor  .
Radical changes made in favour of the poor and efforts at land reforms were stressful and frustrated by powerful landed elites  in brazil and Venezuela prior to the election of left wing government in this region to effect reform in the new century. Development is a turbulent process which involves distribution of resources   mobilizing every available resource to dominate forces of nature and ensure that every stakeholder in the society is affected .It should be noted that institutions that have supported and sustained western democracies were evolved  over the last 400 years .The  British parliamentary institutions  the oldest was developed over the course of a millennium .
Political scientists and media scholars have contended this could  be strenuous for late comers to development which need to adopt home grown institutions to quicken their pace of  rapid development or else may not catch up with the rest of the world .
The  decadence of democratic institutions permeates every part of the developing countries .We shall use the basket case of  Nigeria as the case study at this point .The deputy editor at Business Day Charles Ike-Okoh and the fellow Journalist Badejo Ademuyiwa  in the research report entitled  ‘ National Assembly : World ’ s  Biggest Democracy Cost Centre [ 2] ’[10 Tuesday 10 February 2009 ] .In the intro , they affirmed ‘ Since June 2007 the house of representatives  has not passed 10 bills because most of their time is spent sharing money .’ According to a former legislator  ‘‘It is hard to determine what the lawmakers take home monthly .Nobody knows it except  an insider . It has been  done in a  way that nobody  can  discover it. Only the banks can tell the exact amount a federal legislator collects monthly ’’.He called for removal of secrecy through the order of the CBN  and the backing of government . This he believed would not be possible and can even be politicized by CBN .
The report shows that the national  Assembly  member ’s  monthly salaries in the early part of Yaradua vs. Good luck regime earned 4.5million exactly the size of a local government  allocation from federation accounts in 1999  while the speaker collects 33 million naira . From January  2008 onward each collects 10.7 million naira and Speaker collects between 75 million to 100million naira .  The senator earned 44million naira  monthly and  528million naira  annually and 128 million naira annually for the reps .. What only needs to know much president and ministers are earning to understand the gravity .Even then let us make comparison to 1983 .President musa Shagari was earning 25 thousand naira per annum and Lagos state governor like other 18 governors were earning 20,000 naira compared to today  . Every budget year they bring up several projects and then huge money allocated to recurrent expenditure is eventually shared among themselves after passage of fraudulent bills plus huge  constituency funds, Which do not also reach the grass root  .
To worsen the case nobody audits their accounts  because the auditor general  of the federation which ordinarily audits the National Assembly and public account committees with supervisory powers in both houses   are easily being  bought over .National Accounting Standard Board [NASB]is also being  compromised and sanctioning for erring auditors and  professional accountants  are common .Selfless service is very hard to come by and corruption to borrow Stewart ’s  ‘has turned  a  bad habit into a mortal disease’ .Every institution is consumed by this intrigue and moral decadence .Consequently less than a quarter of  1%  of national population controls more than two-thirds or 80-90 % of national budget and more than 1 percent controls 80 percent nation’s  wealth  in a country in which more than 3 million join labour market every year .And one can imagine the kind of impact that  a house that is often divided itself will have and where fight , exchanging of blows and rancor had persisted among members like primary school pupils will have .
These people are just sharing money living no legacy  for posterity and the dignity of their children .At a town hall meeting organized by Nigerian Reunion Cooperation in Las Vegas the speaker of the house of Representatives Dimeji Bankole alleged that about of  65percent of federal government allocated funds unaccounted .He noted that the inquiry  by house of representatives  discovered  30 percent of federal budget allocated to  construction of roads across the country was channeled to projects already paid for and executed .Within a band of five years[2004-09] a local newspapers Business Hallmark found out that  about 31 .4trillion naira was shared in the country .A whooping $217 billion in a country that is confronted with limitless challenges and growing deindustrialization .Government indeed is  too costly and mismanagement and corruption is a central bane  . Take a look at the grim statistics :
-----In a review of 2008 human development report by United Nation development  programme a very depressing nature of Nigeria was  painted . The country has a long way to go as noted in the fact and figures [ human development index ]  presented in the authoritative report entitled  :fighting climate change : human solidarity in a divided world ’.Even among nations grouped under  low human development so many nations fared better than Nigeria mainly Eritrea and Senegal .In a group of 177 nations we stood at 158 .Many more grim data abound from other sources :
---- under five mortality rate is close to 200percent per 1,000 live births and maternal mortality rate is 800 per 100,000 live births .Whereas Ghana is one of the  leaders in this category on the continent along with South Africa and Kenya .Her under five mortality is between 110 –120 per a thousand live deaths while other sources put Nigeria figure to be as much as  200 deaths .
----Only 30 percent of Nigerian population have access to electricity and less than 20 percent of rural areas have some form of electricity .Per capital consumption is about 100 kwh
-----Only 25percent have access to decent housing living in befitting places not slum motor parks or  on the streets and housing deficit of 16 million is expected to cost 42 trillion naira 
.----40 percent of Nigerians are illiterate and more than 50 percent are unemployed .
-------70 percent of the industries have collapsed and virtually every sector of the economy has collapsed  due to decline in poor capacity building .This speaks volume indeed :
  [ 1.] manufacturing sector contribution to the GDP IS ROUGHLY FOUR OR FIVE PERCENT and has the capacity to employ a large number of people like heavily neglected agriculture  but its return is low .
   [ 2.] The hydrocarbon industry constitutes 95% of foreign exchange earnings 85 percent of federal revenues and 65 percent of budgetary revenues and contributes 40 percent to the GDP but hardly employ half a million workforce .And every year 60 percent of annual earnings from oil are siphoned back to western countries ,the capital flight is 95 percent of every dollar  spent in the industry economy  creating jobs for foreigners at the expense of her people .
   [  3.] About 1.5million tons of  oil has been spilled since commercial production of oil started in the country on the average of more than 300 spills annually .The condition of life in the world leading   wetland a 70, region with the world  largest number  of rivers and waterways  is the same in its more than 1,000 communities where spillages have pillaged farmland watercourses shortening life expectancy making condition of life unbearable for its people  .
In its 2009 report Petroleum pollution and poverty  amnesty international observed that independent environmental and oil experts estimated between nine and thirteen million barrels had leaked since the nation’s independence .It also admitted during this period or over the last half century the Niger delta people have experienced oil spills at par with Exxon Valdez tanker disaster every year .Between 1976 –2001 close to 7,000 or 6,800 spills occurred .[UN.figures ] .60percent of 31million people in this region depended on environments  [United Nations Development Program ]. British petroleum was slammed with 10billion dollars lawsuit for leaking toxic chemicals from its Texas city refinery but what would be price of similar scenario for the Niger delta  and various occurrences over  the last 50 years ?  Why the fine or heavy slam ? Simply because they can’t farm .According Iyayi[2008] in the study by European Union found out that the microcredit scheme for farmers  they were involved with in the Niger delta had collapsed . Besides being small say 20,000-30,000 naira per farmer didn’t produce any result or seeds failed to germinate  because soils have been heavily polluted .
 [ 4.]      Where oil was discovered at Oloibiri now regarded as fossil town instead of being a national monument now a national embarrassment where close to 70 percent of youths do not have jobs .Since production began more than 600billion dollars has been earned from commercial crude receipt yet 70 percent of  the wealth were stashed out in foreign land.
     [  5.] 90percent of oil and gas industry equipments were owned by foreigners and 90 percent of  the industry is controlled by foreigners . If 90 percent of the nation’s economy is controlled by foreigners as it is presently    is it not shameful for the so called giant of Africa ? Nigeria is the only country in the world in that produces oil and  yet has no tanker fleet .Foreign operators dominate everything apart from tax and royalty moneys we have no stake in this business from production to selling and the Cabot age scheme  to fill the missing link was later heavily sabotaged crashed like defunct national ship building and acquisition  fund  and made irrelevant to the needs of local shipping tycoons and industry operators  .We should not fail to remember that after over 50 years in the business indigenous oil producers still do not control up 3percent of the industry production outputs .The 24 marginal fields with minuscular potential that could dry up in few years time or within 5 to 7 years of production have a mere capacity of 5.7 million proven reserves  ;not very profitable in real terms considering the cost of production  were leased to local operators while foreigners controlled the richest offshore  fields
    [ 6.] The world largest contribution to global greenhouse gases is  the Niger delta which is the world largest single  industrial  complex flaring more gas  than the whole of other sources existing in the SSA region put together which has the capacity to supply gas to the whole of Africa not just West AFRICA  .
    7.] 90 percent of the nation’s consumable goods are imported and capital flight crisis and capacity building problems have never been abated . These are the reason behind high unemployment and  growing rate and escalating dimension of deindustrialization .What the nation needs is capital flight bill not local content bill really which encapsulates every problem linked with capital volatility and Braindrain
----Also two thirds of working adult were unemployed or underemployed  and not more than one third of Nigerians that should be in school were receiving any education .The national bureau of statistics also complemented this sources that more than 80 percent of Nigerian youths are jobless where only 10 percent of graduates are employed.
----- While Tanzania-the fourth poorest country on earth alongside South Africa and Malawi have attained 90 percent success as far as universal primary education is concerned the definite blueprint to develop an average child stop street hawking and child abuse is still common  let alone a concerted to get all children into school .Rwanda tormented by genocidal fraction represents a great motivation for poorly performing nations like ours especially in the promotion of gender inequality and empowerment .The gender parity there is 98percent and a force to be reckoned with in the same league like Malawi Lesotho and Uganda . It is also leading in women political empowerment in which 49 percent of parliamentary seat are occupied by its women [source :Dfd] . These are nations that looked up to Nigeria as big brother Africa .
------ General education level especially the tertiary education is perennially declining and the certificate of average Nigerian graduates does not more than the paper on which it is printed .The period between 1960—1990 was not only the golden age of the university education but was also widely in the international community . According to national universities commission and the national academic staff union of Nigeria that in terms of quality and research out local varsities were the best in the whole of Sub-Saharan Africa [ Karani : 1997 Okebukola :2002 and Ibeneche : 2009 ]. This was confirmed by association of Indian universities when comparison was made between Nigeria and India during the 1981 period .That beside Nigeria no other country experienced such a phenomenal surge of 13-14 percent growth per year .
Today the golden age was lost due to declining capacity caused by poor vision and lack of clear cut strategy at sustaining earlier capacity generated .IT was confirmed that no Nigerian university is listed among the top 1000 in the world .In the 2007 ranking by THES  --QS World university rankings only the university of cape town is glaringly rated or found .Even  in African ranking apart from South Africa they trailed lesser endowed territories like Ghana and Kenya having only four universities in the top 100 [OAU:44TH ; UNI.of Ibadan : 66th ; UNIBEN : 79th ; and UNI.of LAGOS :90TH .] .
Educational quality is so retarded  that 80 percent of Nigerian graduates are unemployable and more than 50 percent of Nigerian universities are glorified public schools  .Cultism and prostitution rackets are prominent in one way or the other .The students  in the universities  took to examination malpratices simply because  fear of adequacy capacity for success   .They do not have facilities for research and no money for foreign travel .The certificate  are so worthless to say the fact  even doctorate degrees are presently suffering the same fate and many hardly can defend their certificates . The university dons are aging .Gone are the days of Soyinka ’ s Osuntokun , Dike etc which requires a new generation to fill but young people are not joining ASSU . What will become  the fate of these varsities when these dons are no more ?Now let’s go textile industry

.Virtually almost every textile company in Nigeria had closed shop. MAN put it succinctly that between1995 to 2005 the industry shrank by 64percent and is endangered by illegal smuggling of textile materials through the nation’s porous borders making the nation a dumping ground for textile materials from India China Malaysia and Hong Kong .About 4.6 trillion worth of illegal materials enter the nation ‘s borders in this way .She imports more than 80 percent of her textile needs .Here is an industry which was formerly the largest in Africa and the highest employer of labour in Nigeria after Government which has the capacity to employ more than 300 ,000 workers with multiplier running into millions of jobs indirectly  .
 Trade policies are resistant to local climate .Nobody is against liberalization but total liberalization without protecting anything unlike India and China is what we are guiding against .Even advanced countries they do not liberalise every thing  .The experience in their steel industry at the beginning of this decade in America and Europe leading to integration is a warning to unrepented advocate of free trade  . There is no way local producer can compete against foreign manufacturers . The issue here is the quality of cotton and the cost of production that availed against local companies .These people have been developing the cotton and more conscious about its quality .
According to a local expert the Nigerian cotton so far gives one perhaps about  6 meters of fabrics per kilograms  .One gets to the middle on knitting  when the yarn is spanned one gets 6 meters but in the case of foreign  textile producers   in most cases that dump their fabrics in Nigeria the cotton they buy or produce in their territory  is of high quality and very highly elastic and one gets about 18-20 meters  per same kilo. This  made Nigerian cotton and textile automatically  uncompetitive and which means local farmers are also left behind  because they are the primary producers for the industry .
It was found out that government deliberately decided not to fund this industry especially the agricultural sector  which could produce quality cotton by refusing to fund research for future development of quality outputs .WHEN PETROLEUM TRUST FUND [PTF] started funding research in this direction prior to  1993 and was giving Nigerian farmers  cottonseeds; they were adjudged and assumed to  the best the nation ever had .It was yielding result as it produced over two times the local seeds per same hectare .This intention was discarded by successive because it was not interest of world bank and IMF presuming that PTF seeds as opposed to normal local seeds  could be their great undoing and make us self sufficient and so productive . With the coming of the civilian they succeeded in scrapping PTF using the government of the day citing mismanagent and corruption .Since then no institution has a good intention for agriculture prior to the 200 billion naira recently set aside by Yaradua vs. Good luck regime .but dumping persisted unabated and the efforts of antidumping committee set up several years ago couldn’t do anything about it .
The solution is improving capacity growing more cotton and getting out quality and high yield   per hectare will make cotton easily  more available and prices affordable to enable manufacturers produce quality materials enough for the markets .The textile industry we noted is extremely important due its ability to employ greater number of people .Different technologies are disposed in the market that covers 10  different types  of  textile industries .Unfortunately government perhaps recognizes only one . For instance the production of blankets sing lets and underwear is not the same with carpets .The entire industry is not limited to production of wrapper as many speculated .If the threat to jobs security and the growing rate of unemployment is to be resolved the plight of the textile mills must be given top priority

-----Why do we have these problems ? Beside corruption , mismanagement and growing deindustrialization ,we have noted that the major factor behind perpetual  economic decline is poor capacity and  the issue of  capacity which we noted is the author of development .A society that suffers moral decline  is suffering from this malaise. The paralysis is common in every sector to reverse decline a nation must build sustainable capacity .A shortfall in national capacity encourages underdevelopment and corruption . The question is :how many skilled labour do we have in this country ? How many scientists  doctors lawyers accountants and vital industry vi-s-vis the demand of the economy and the conducive nature of the environment required professionals welfare ? That is the great challenge  Let us observed some sectors of the economy …For instance in the aviation sector ,out of thousands of pilots on its [NCAA] register ,Nigeria according to Harold Demuren  can boasts of only  800 active pilots some  of whom are  aged between 50 –55 years of age and then 60—65 years at this age  you can ’t  fly again  …Imagine 800 active pilots for a country as big as Nigeria ! ……So many inadequacies abound in virtually every sector of the economy .IF this could happen to Nigeria how much worse in many African countries .
Almost every airline had collapsed like shangshangi, Bell view ,slok air ,sosoliso,  Eagle air , Albarka  etc .Those that are surviving are heavily indebted like Arik air and even Air Nigeria until recently  .Infact the environment is not conducive. Gone are the days when Nigerian airways was the best in Africa with passengers as high as 600 000 passengers  annually --the biggest in Africa .Now it is dead with  all 36 planes forgotten to the relics of history  as we repeat the same old story over and over again  and the industry  cannot  compete even  in its local market talk less of international market .
In the maritime industry , Nigeria has 100 mariners for  140 million people .That is an international embarrassment. And close to half of these are active mariners and it took 20 years to produce each mariner .Moreover ,  do we have a  national shipping vessel? of course , this is popular and it is known that the death of  NNSL  was a long story formerly  with 26 shipping vessels left behind by the military government   in 1978 and now the rest is history having been sold as a scrap and not even a single vessel is left functioning .The fishing trawlers in the country were 260 but now about150  trawlers remain and this business is controlled by foreigners . Piracy has caused a lot of hardship too.  Our territorial waters is 90 percent controlled by foreigners and unattractive ports costs the nation 20billion dollars annually. Some sources put the losses  at 25.5billion dollars and that Lagos state alone has 33 unregistered jetties that harbour  illegal bunkering  activities   .Another media sources also estimated that about 56billion dollars is being lost annually from bunkering alone. That 70 percent of 200,000 tanker vessels that pass through  the territorial waters annually due to unattractive ports do not berth for bunkering in the country and prefer going to neighboring ports .This is a huge amount of money more than the size of nation’s GDP in 2001  
In the insurance industry insurable interest being lost annually to foreign land is about 105 billion approximately 11trillion naira due to poor local insurance capacity in addition to poor skilled labour .We lamented also the situation in the domestic construction industry in which foreign contractors had cornered the best and the richest contract in the industry is also appalling  …Besides inhibitive factors in the industry  inadequate finance , high cost of fund , inadequate and poor quality  building materials , availability of lands caused by restrictive nature of Land use act decree ,poor skilled labour and  poorly performing institutions ……….contd.
By all ramification policies and institutions that are supposed to promote development are inimical to growth and development .Policy summersault and succession crises are prominent in place of sustainable  capacity building ,encouraging development arbitraging   and development holocaust  in the long run in addition to poor effect of reforms and reforms workability .Since independence  no policy and reforms by strategic impact have been sustainable  and development holocaust happens or occurs every decade in the country since 1950s  .Take a look at the banking industry for instance every decade since 1950 financial institutions especially banks crashes have become a household fatality .
During the period , two thirds of banks operating in the economy crashed—an unusual or inordinate phenomenon  which has persisted till the last   decade of recapitalization when 13 thirteen banks finally closed shop to wind up reforms , following Savannah bank crash in 2002 .The era of commercial banks and merchant banks had gone riddled by  bitter  politics in the marketplace  and then came the era of   universal banking  in 2001 which removed dichotomy between the two types of banking and many merchant banks previously  been persecuted or marginalized from juicy commercial banks market or probably owing  to lack of access to the clearing house were allowed to be converted into commercial banks .
The era of settlement banking also took over prior to the era of consolidation or  recapitalization in 2004 which scrapped the era of universal banks .It is unfortunate now that there is a planned policy summersault again  returning back to the first of era of commercial banks and merchant banks bitter rivalry  probably after the sacking of banks managing directors to the detriment of one of them who was formerly a merchant banker while other 11 executives were left untouched .Universal banking had also been sacked recently  . Policies and institutions were made to blackmail , witch hunt and capitalize underdevelopment not just in the banking industry  even with the rise of democracy  in the entire sectors of the economy , policies were not sustainable and those vague  were used to benefit the very few or buttress the pie of vested interest   .Moreover there are no blueprints supporting the disbursement of  500billion naira set  aside for power and SMEs credit guarantee scheme  according to Renaisance professionals .Is Nigeria a nation or a contraption ? There is no direction at all even with make believe improvement in governance since renaissance of democracy .
Democratic structure is costly where recurrent expenditure consumed 80 –90 Per cent of the budget and nothing is left remaining for capital expenditure truly shows that the future of the country is mortgaged and  no planning for coming generation .Infact the budget is not more than the paper upon which it is printed and hardly gets implemented by more than 50 percent .Where are we heading to in this country ?..With the assumption of democracy the glooming  picture has degenerated from bad to worse .We use Nigeria as a case study at this point   .....
The question is : Is democracy promotive of development , decadence or corruption ?Are we at this stage fit for adoption ? The military had not helped either even though the best development and the worst corruption era were perpetrated through them .The nation’s hands are  tied . .What can we do ?  It is the same story across AFRICA  in which 150billon dollars  is siphoned  annually  by corruption  and corruptocrats .This is unfortunate according to Revive Africa -a book written by Gbolahan Laniyan   in a region that accounts for more than 10 percent of world hydrocarbon reserves :controls 54 percent of world gold reserves ,  99 o f chrome reserves ;85 percent of world platinum ’. Infact it contains 40 percent of world total strategic minerals and Congo basin alone controls roughly half of that .Bitumen deposit in Nigeria is the world largest and Nigeria gas commands the best authority and the biggest deposit among world leading gas nations like Russia AND Iran .Natural resource had been a curse as noted rather than a blessing   .Whereas development had been remarkable spreading from Asian tigers ,southeast Asia to some Arab territories
It is a bitter truth to swallow that we do not need western style democracy that Lee Kuan Yew  believed is an abettor of indiscipline and  corruption. But Nigerian had failed woefully to learn from him despite being fond of him  .For instance , in one of its articles Eddie Iroh –a prominent media  luminary lamented 19 0f the nation’s 36 governors had  visited Singapore and read his book and still yet the quagmire never receded .
 The solution proffered in this book  also take care of new form of government that is responsive to developing territories like Nigeria .Above all it preaches capital development and egalitarian investment in people .and first and foremost its peculiar financial system model must first  evolve prior  to  its adoption  using DUCAPOT rule to touch the grass root .Therefore the importance of microenterpreneurs and SMEs cannot be underestimated which is the arrow of development in every of clime .

Professor Alexander Geshenkron  in  a  comparative study conducted
‘Economic Backwardness In Historical Perspective ; A Book Of Essays [1962] England ‘ . He noted the success of industrial revolution in England  rested largely on the success of SMEs which requires little capital to operate in  addition to founder’s specialized entrepreneurship . As  an  economy categorized as moderately developing , Germany also flourished during the period through them and  depended  heavily  on the Banking sector for their success .
Likewise , the quantum leap by  Japanese economy during the similar period  , presented a more remarkable picture of the power of these wealth machines to support her  phenomenal  development  prior to World war 11 .The secret behind this economic miracle  according to Professor  Yamamuva  was simply  cultivated  by phenomenal growth in commercial lending to micro enterprises .This was made possible through the  great Zaibatsu – an equivalent of  modern development banking model . Today the world sole super power the United States followed similar universal pattern of mass development .For instance Banks in Louisiana were noted to have relied heavily on SMEs as engine of growth and so heavily financed them for purposes of economic welfare  of the Nation ’s citizens . It is the same logic everywhere .The developing countries  also after independence had pursued   and implemented  similar policies  to no avail owing to socio psychological self imposed barriers and the unceremonious truncation that came later through external aggression .We should not fail to remember that China and India are both 2nd and 5th largest economies on earth .Their strength rest largely on SMEs in addition to micro enterprises .
The American brutal civil war finally came to an end  on April 9,1865 when General Robert E. Lee surrendered to the north country .The Americans came to discover the magnitude of the social and economic damage was far inestimable especially for a nation already in its glorious path to industrial stardom .They were confronted with the big question of how to rebuild the war-torn   economy .Their challenge was to build the world most  powerful industrial superpower  and building the  largest  economic powerhouse means unseating the British economy into distant obscurity .And so they turned to entrepreneurship as a sport in the reconstruction effort and took this challenge farther than any other nation in the mortal history  .
There is no doubt that during the post war reconstruction effort some American entrepreneurs actually stood out with unmatched record and indelible profile in their generation  for all time .These four barons can be regarded as the most ferocious players during the period charting away out of economic horrors with  the  most aggressive entrepreneurial and selfless disposition never seen in the world prior to the period . Andrew Carnegie did not waste time transforming the American steel industry into most competitive mass market worldwide while cutting down the monopolists .In the oil industry, the strategic impact  of  John D.Rockefeller   was extensively  felt and a phenomenon until this day with a stroke of master strategy transformed  the under developing nature  of the then industry into world behemoth today making America to consolidate its leading status .He not only displaced the monopolists but extended his distribution channels across the world mainly in China and Japan .
Particularly of note  John Pierpont Morgan holding history by the neck rewrote the pages of American entrepreneurship from the backwoods and backwaters of  history into world leading economy .He shoved aside competition to become defacto world  central banker and America central banker even before the coming of the Fed. .He was also a foremost venture capital single handedly acting as intermediary par excellence  and midwiving  crucial capital flows into American SMEs risking even his   private capital to save his country from the gold panic of 1893—95 and the successive stock market panic of 1907 .Like his colleagues no deep seated patriotism can be better than this earning an unrivaled place for themselves in the annals of American antecedence .
Starting from the grass root they rose beyond their borders to become the envy of the world giving back to the communities, most of  the wealth they had generated  donating varsities schools  , charities hospitals and libraries ,creating a conducive environment for new generation of SMEs to thrive .
America as a result of these barons was able to dominate the world using the economic power of SMEs  to engineer her political power supremacy. .Microsoft ,Dell ,Wal-Mart , Compaq , Hp, Home Depot , Intel ,MacDonald’s , IBM , Gateway , Oracle , Apple and  Cisco etc all started as SMEs before transcending borders to become household names all over the world .With one of the highest per capital income in the world it is also the major source of private skilled workforce .
                 SMES   AS   THE  ENGINE  OF  THE  ECONOMY
In the U.K. . as well as the European union SMEs contribute 99 percent and 98 percent of private workforce .A total  of  3.7 million business in the former and controlling 65 % of business turnover in the latter . In most countries of the world according to ILO SMEs accounted for over 60 percent of non formal sector employment .Most of the new jobs created over the last 10 or 20 years  in Europe and  America  for example have come from SMEs .SMEs accounted for over 80 percent of enterprises  in virtually all countries of the world .They also contributed 15—20 percent  of the GDP in most countries . In the European union it comprised of 98 percent of all enterprises .The 2001 ILO figures that over 150 million youths are employed and over 80 percent living below 1 and 2 dollar a day can easily be taken care as SMEs develop robustness vital to sustainable economic growth .
Coming down home to Nigeria , the federal bureau of statistics  shows that  97 percent of businesses employed  less than 50 people . It produces 60 percent of  employment and output . They control the informal sector  which in turn controls 70 percent  of the economy . Unfortunately SMEs mortality ratio is said to be 80 percent in the first five years of operation . If indeed it is recognized that it accounts for  80 percent of  entire workforce  in most countries of the world , why then do the lips service continue in succession  for 5o years since independence ..
 Now ,we shall examine briefly the challenges facing SMEs and Micro entrepreneurs in Nigeria  .
                                  THE FATE  OF   SMES  IN  NIGERIA
Nigeria as a nation , quite unfortunate , quite uncharitable and quite lackadaisical and super--irrational  has been struggling persistently to revive the fortune of SMEs since independence . Although we did a review of this later  but here cursorily also  or in a cameo we appraise the failure of industrial development centre established since 1962 among other similar initiatives is still a national stigma till date in a country where policy summersault and succession crisis is a way of life .
The first industrial development centre established during the period by the then  eastern government in   Owerri  was taken over by federal government in 1970 .Subsequently ,other IDCs were founded in  Zaria , Uyo ,  Kano Osogbo,  Benin city  , Ikorodu , Bauchi , Maiduguri, Port Harcourt , Akure and Ilorin .Just like the DFIs , the politicization that came later deceitfully truncated  this good initiative. The merger that came also later in 2001 hardly survived and the bank of industry  struggled to take off after years of wobbling and vain restructurings .
The SMEs bankers private sector initiative took off  during the merger at the instance of bankers committee to invest 10% of PBT according to the guidelines into SMEs .It also reminded us of similar or earlier ilk’s in the industry . The guidelines regulating the scheme being  highly insensitive to the yearnings of industry did not help matter .It defines SMEs as any enterprise with a maximum asset base of  500 million naira excluding land  and working capital . We could be talking of total asset value at 1 billion naira  . Imagine for a start up company !  Nevertheless the scheme was approved in 1999 .This sounds unbelievable .Is this way SMEs are classified in advanced countries ?
The investible fund  is  for equity investment   annually in both ordinary and zero coupon non cumulative  preference shares . It is the industry contribution  to federal government attempt at stimulating the economy evolving local technology and employment generation .It also includes  10 percent minimum credit to the micro enterprises . The CBN empowered them to invest up to 200million in  a viable enterprises through fund managers excluding trading and financial service business . This direct patronage should not exceed 40 percent of the equity structure of such emerging enterprises  and has a duration in the form of venture capital .Whether by investment syndication or ;loan consortium participation in large projects   should not exceed the benchmark .
To make matters worse in the following  review besides interest rates put at 9 percent the amount investible in a project was increased from 200m to 500 million naira while the asset base rose to 1.5 billion naira from 500million  naira . This puzzles industrialist entrepreneurs and needy businesses especially the inability to secure  70 % of funding not to talk of 100 percent financing .And upon dilution of ownership holdings still expect capital appreciation above money market rates annually .Institutional apathy was aggravated even in the post consolidation era .According to Nigeria export promotion council [NEPC] only blue chip companies still enjoyed unbridled access to credit lines with reduced interest rates and not SMEs despite increased liquidity in the system after consolidation .Going by this historical and technical background the scheme is an elitist one and not one for the masses and the interest rates for SMEs are in double digits as opposed to single digits for prime borrowers in the economy .
On a more serious note ,  how do they classify or define SMEs in the OECD  region . The Small Business Administration in the United States defines it as ‘independently owned ’entity   and ‘operated for profit but is not dominant in its area of operation ’ . In the same vein companies in Britain are controlled by company  act 1948-1981. The 1981 act stipulates and designates certain companies small and medium .The former having a turnover of more  than 1million pounds or 1.4 million pounds p.a., asset less than 700,000 pounds with less than 50 people under employ .These companies are independently owned  like in America and are mandated not to reveal turnover and profit to the public .In the same way with the  Medium companies which have turnover less than 5.75 million pounds ,assets less than  2.8 million pounds and employ less than 250 people . No outside interest is in involved .This liberal lending policy encourages their economy to grow .Today there are approximately  23 million of such businesses  in America  jointly employing more than 80 percent of national private  workforce contributing more than half to the GDP . Infact according to Economist in 2006 , 99 percent of the 26 million businesses it reported employ not less than 500 workers and were agreed loans with no ownership dilution shareholding . This is what makes American economy thick rather than the bulge bracket companies that we do focus upon .SMEs are the secrets to her wealth as a dominant  force in the international community.
It is a common knowledge that this policies lack grass root sensitivity . In the capital market the objectives of 2nd tier capital market could not  be achieved and the 3rd tier exchange  that came later followed similar fate .The recent launch of new alternative investment market [AIM/PRIPEX] with insensitive and  inadequate structure in  a  bad system is bound to follow the same vomit .
This is also evident in another new initiative to revive the conduct of SMEs in the country . The federal government pumped 500billion to the Bank of INDUSTRY to develop real sector and another 200billion naira to develop agriculture and manufacturing  managed by elitist  banks .Infact like we earlier admitted the requirement is too stringent majority of SMEs and the lower cadres will still be left behind and not catered for  .They do not have direction and the policies are not broad based reinforces the propensity of development arbitraging –that is only very few will be benefited , leaving majority of SMEs behind . The requirement for accessing loans with NERFUND , BOI ,the stock market and the insurance sector or any DFIs are elitist . The latest 200billion SME credit guarantee scheme [SMECGS] to promote credit access to SMEs and manufacturers  which would be funded 100% and managed by CBN is to begin Nigeria ’s quest towards industrialization .The fund is 80 percent guaranteed by CBN .Good ! But what about the requirement  ? The manufacturing and agricultural value chain and SMEs assets shall not exceed more than 300million naira employing between 11-300 persons . Good !
Certainly , sustainability will be a great future challenge and the  domestication of the initiative in the language of the grass root  must  be considered .The investment prejudice  and  self centered parochialism  of the local banks might stalled the beautiful initiative .Moreso  MFBs as the right institutions are being bypassed .This could have been solely managed by them  in a separate financial system with ancillary grass root oriented  institutions .
We STILL find it  hard to apprehend that for every incentive provided by federal government to banks to lend to   SMEs  has often met brick wall . They not only demonstrated a discernible degree of reluctance against SMEs but also dubbed them  as ‘HIGH RISK ’ . Hence a no go area . The CBN credit guidelines  for banks as earlier emphasized to lend a given proportion of their loans and advances   to SMEs especially  agriculture started in 1979 .It was also 10 percent then and was subsequently raised to 16 % .Similarly in 1982 ,1983, 1984 and 1985 ,loans and advances  to SMEs stood at  206.7million naira ,  351.30 m, 345.3 million naira and  977.2 naira respectively in a percentage allocation of  2.0 , 3.1 and 7.9%.
Some of the problems faced by banks in advancing loans to SMEs include the high mortality rate in the sector . According to a research reports  by industrial research unit of OAU revealed lack of integrity in operation of such loans  and Since they are dubbed  a high risk  enterprise , loans to SMEs  are accorded low priorities in the lending scheme . The problem  of adequately trained personnel is another bone of contention . Inadequate skilled lab our and the owners are people with little specialized skill or expertise neither do they  have capacity or finances to hire expert to manage the business either part time or full time .The consequence is that they are used to producing faulty and insufficient  records  .About 50 % of  SMEs keep profit and loss account and appropriate balance sheet on a regular basis ..The media research shows that these lack of records or inadequacy in record keeping  ordinarily influences lack of  financial assistance from banks .The inability to survive competition and the resultant low efficiency can be deduced as natural consequence of poor book keeping or inadequate record .keeping leading to mortality  .
Although mismanagement is another problem,  the above factor can also be regarded as part of mismanagement , since information is  the livewire  and blood system of an enterprise . Lack of adequate planning ,  in that case they are mentally represented and poor administration are common management problems . Poor marketing policies with no adequate strategies and inadequate information can be waterloo to business continuity and especially at death of the original owner ,  perpetuation of business becomes practically impossible due to lack of previous documentation that could be instrumental to business continuity  .
Cash and stock are taken away at ease and for aggrandizement .These are not recorded if taken as loans not refunded .No transparency no accountability .Rather than paying themselves salaries from their businesses  or return missing goods and cash the exuberance indulgence of the day truncate a potential business that could have changed their  communities and touch many lives . It is a usual thing to mix their personal money with their business wealth and then in the long run , the trade experiences liquidity problems  . Funny enough , most of these businesses are not registered business and doing  business with unregistered businesses  is illegal .
Besides the problem of loan misapplication common among SMEs ,  the problem of loan repayment as a result of accumulation of arrears is another  teething lending disincentive . Loans are sometimes not repaid at all even where business is generating sufficient funds  to liquidate the amount borrowed or not repaid on a scheduled basis .  The misuse and the  misappropriation of funds and the failure to repay the principal let the alone the interest  reduced the capacity of lenders to  go round another classes of people reducing banks confidence for a prospective loans.
Most SMEs are highly undercapitalized and suffered from inadequacy of capital and unable to raise money from capital market as a result of their  inability to meet the stringent requirement of the exchange .
The loan recovery disability and inherent threats above all is the leading factor in the business hardship  . Banks could hardly  monitor loans let alone  recover fund after lending  .They are interested  only  in  their  money  and hardly interested in personal advice to clients relegating  SMEs welfare to the backburner .A banker is only interested in loan legal action when matters have degenerated . Without cooperation with the SMEs , the safety of the loans may  be in doubt. Credit risk management  expertise is grossly lacking in Nigerian banks and a major bane in this dilemma .There is no doubt lack of innovation was noted as  the central predicament in the Nigerian banking system and policy makers  must apprehend this fact that the pace at which SMEs grow determines the pace at which the economy grow .
Unfortunately the outlook for the sector is bleak across the board .As the country prepares to join the top 20 biggest  economies by 2020 and planning to grow by 13—15 percent  SMEs sector is omitted and not factored in the project .Serious attention to it is recommended if we are to attain the perennially elusive development goals of  SMEs project since 60s .MASAP projects resolved this hurdle as it does for micro enterprises .
Micro enterprises  in most economies constitute the  major plank of the informal productive  sector and  vital empowerment sources of a nation . When neglected most economies fail to grow . They  operate in the urban areas  and the rural communities  at a very small scale [Drake and Otterro :1992]   .    Majority of the new  workforce in the urban centers  were consumed  by micro enterprises  . It is seen as the last line of defense  in the economy the first and the last hedges  of  employment sources and ultimate bridge between the formal sector and the economy . 
While  micro enterprises accounted  for half the labour  force in Lagos alone ,it represented  30 %  in Kenya in  the 70s  and the 80s ( Sethuraman :1981),it is as high as  50% in some African  countries  .   It is generally proven that every morning  600 million people go to work for themselves  . and often consist of a larger workforce in the developing countries [UNDP:1997; 2] . Most job losses in the informal sector were provided by this self propelling forces for sustainable economic growth .It was provided to have provided  close to 14million jobs between 1992—2000 [Halverson Quevedo : 1992; 9 ]  .As noted by Lubell and Zarour [1990:395] in the study of Senegalese formal sector  that due to government harsh measures rose to become the saving grace indeed of the country ’s formal sector  job losses .
Writing in the book Microfinance and Economic Activity , Emeka Osuji concluded ‘many economies  are not growing at all .At best ,they are static if not contracting .Various policy experiments in countries like Nigeria are taking toll on formal sector employment’  .What would have been   the fate of this people loosing their  jobs  on a daily basis ?To grow their activity is to grow the economic prosperity in the long run creating friendly marketing incentives to appropriately price development into sustainability .   This corroborated Napoleon Bonaparte  ’ s that the true worth of the state consists in the number of its  inhabitants   in their toils and lab our .and industry.’ 
In Nigeria today , there are approximately 90 million micro entrepreneurs and being  greatly marginalized  by mainstream  banks or financial institutions meant a dampener on economic growth .  Moreover , according to Okinmadewa [1997] and  reappraised by  Adeola [2001] in the schematic segmentation of poorer classes in the country classified them into three classes mainly :  entrepreneurial poor  ,Laboring poor  , self employed poor and vulnerable poor . The first class and type  include   the upper low and the  middle income earners  who were forced to operate micro an small business due to harsh due to harsh economic climate ; mechanic shops hairdressing salons , displaced workers , artisans , and unemployed graduates .
 The self employed poor are dependent on the first class for their survival or livelihood  .  They include street hawkers vendors , petty traders  , shoe blackers or polishers  and mechanics .The third class constitutes the  largest category and population of the poor in the country including security men ,gardeners ,household workers , conductors and street hawkers  . They are manual daily paid workers in the rural and urban areas .The least being the vulnerable poor who actually are those  that demand social support programme designated with safety nets . From the invalids to the women and children fall into this class .At this category the female headed household are a potential micro entrepreneurial resources and may demand for creditor loans like other classes for set up and for expansion .
The author affirmed in the piece Microfinance , Micro enterprises and the economy a postscript in National Mirror [Jan.11,2008 ] that apart from entrepreneurial poor, with a bit of attention ,none of the poorer classes are well catered and adequately represented  …..especially even with the coming  of microfinance banks in Nigeria. He concluded the lending policy being illiberal lacks grass root content .Again, ‘Micro enterprises’ according to Osuji [2006] ‘are often full time activities which provide  the primary source of employment and income for the operator and the dependents . These business units have been described as the economic activities of the poor because of the predominance of the poor in running them’ . And due increasing retrenchment in the formal sector the people are now taken their fate in their hands finding relief on the other  end of the spectrum most ignored by elitist policy makers and politicians ..This insensitivity had been  a major factor behind prevalence of poverty in the country .
 Today approximately 15 million Nigerian graduates roamed the streets with no jobs no skills and no means of survival in a country in which 90 % are poor should we use UNDP poverty profile concept . This is no giant of Africa and funny enough  according to one man is indeed  ‘a cockroach of Africa’ .The mainstream market is elitist do not cater for them and they need to find their bearing with appropriate system  .
                                MSMEs REGULATORY  BOTTLENECKS
As we earlier emphasized the development of small medium enterprises scheme popularly known as Small and Medium Industries Equity Investment Scheme [SMIEIS ] is a product launched in partnership with CBN in 2001 for acceleration of development in the sector .Each participating bank is expected to monitor guide and nurture the enterprises and for ease of administration and each institution shall  have small scale industries unit with responsibility to appraise and recommend relevant SSI proposal . To also monitor compliance other criteria required are :
1.Rendition of quarterly returns ;
 2. Rendition of full particulars of acquisitions any SSI shareholdings in any SMEs .; [Note: the acquisition mentality here and non-liberal lending policies is a major defect in the scheme contrary to free loans with no dilution attachment in developed region .]
3. This must be undertaken within 21 days of the acquisition  .
In collaboration with United Nations Development Programme [UNDP]  the national policy for the development of  MSMEs took off in 2007 .subject to approval by federal executive council [FEC] on may 9 ,2007 .  Prior to take off attempts at entrepreneurial development were haphazardly implemented and was meant to be a widely accepted policy document to develop the sector .What had earlier started as a scheme was later formed  and transformed into an institution with the coming of  SMEDAN to provide direction and  fill existing vacuum  . The earlier scheme according to media reports by 2006 had created some 500,000 jobs and invested the sum of 18.1 billion naira or 47 .3 percent of the total amount of  40 billion naira that covered in 258 projects which cut across 24 states of the federation including FCT with the real sector and tourism consuming larger chunk of the money .Though this had been  worthwhile but nevertheless paled into insignificance the escalating demand for loan that financial standard a local publication estimated at 438billion naira [March 1,2004 ] .More so as the stringent requirement  during the period for accessing the loan or cheap finance had stalled the lofty goals behind the scheme which was meant to be temporary pending  the maturity of microfinance banks  .Only few fund managers distributed a reasonable percentage to the needy sectors investing in trading and merchandising contrary to requirement ..
The coming of  SMEDAN with its broad strategic policies touched key  programmes’ issues  .In the study by Obajaja [2008] this included land use planning ,contract enforcement ,property rights, tax administration and dispute resolution . While second area or sector touches  research and development and technology the third covers extension services and support services .Infrastructure , marketing and finance fall in the last section .Micro food processing , arts and crafts in the cottage level ,textile and clothing , metal fabrication ,basic metal, electronic, InfoTech, leather and leather products  , construction ,physically challenged people , HIV/AIDS, Furniture and solid minerals etc are classified as quick win situation under special target enterprises [STE] . These are the  legal ,  institutional and regulatory framework covered under the SMEDAN national policy document .
Policy analysts such as Obajaja among others have contended Inadequacies in the legal and  regulatory framework that persisted with the emergence of SMEDAN inhibiting the growth of this sector  .inadequacy in property rights ,poor bankruptcy laws and leasing contracts , incompetence judicial system such as inadequate enforcement of prevailing laws and commercial contracts .This is regarded as legal instability common all over the world , increasing corruption  and  lack of commercial law . To redeem collateral may take one year or two .The challenges facing government at this stage include :
1.     inadequate capacity building
2.     poor coordination between various forms of government
3.     World bank MSMEs efforts towards intergration of tax and business registration procedures , reducing corporate registration transaction costs , improvement of  leasing regulatory framework  and development of alternative dispute resolution mechanisms etc put together is grossly inadequate without a direction and a  national  financial system  to complement mainstream market in redistributionist multiple financial system  . The micro financial system should cater for the poor and the highly underserved grass root market and informal sector economy with its unique  political , legal social and economical complexes
4.     Above all ,  what started as a scheme later into an institution [SMEDAN]  can now metamorphose  with allied institutions and regulatory agencies and subsidiaries into a national micro financial system .One for the poor and the other elitist for the rich with different rules since their thinking nature  and orientation are vastly different which could also engage in cross border domestic investment for national development .This would also guide against the gross deceit and vast immobilization of the grassroot wealth to the service of the rich without leaving them empty and making them  poorer .The poor man’s money must work for him.
As a result of this unrealizable proportion , the inadequacies in the legal ,  institutional and regulatory framework had persisted for a long time and not supportive of MSMEs and can never be supportive of the sector and sustainable economic growth .. .There is no appropriate legal and regulatory frame work that can be created unless this challenge is surmounted .Laws , regulation ,  access to finance,  growth incentives with  basic legal protection and investors confidence can easily be protected .
This is vital for Nigeria and the rest of developing territories when taken into consideration the peculiar characteristics and the kind of development impediment  facing these  territories in the global markets . Effective  use of capital mobilized into SMEs will be based on the nature of  unique development system . There is no need to  replicate foreign regulatory environment here in NIGERIA or an attempt to agree with international best practice that at best were found to be inimical long term growth in the country   . This system will determine the nature of laws and regulation s and institutions that will stimulate SMEs and Micro enterprises  needy access to cheap finance .. The entire laws guiding the sector must be reviewed and introducing new ones tailored to the needs of the grassroots through which  they were designed .The aims of the system includes;
1.Make every willing economically active Nigerian self sustain ant and  a micro capitalist.
 2. Abolish  prevalence of  mass poverty .
 3. Make government activity felt in the grass root ;
 4.Develop informal sector market economy with distinctive model;
 5.  Above  all, ensure universal prosperity for the people and not capitalist prosperity for the few  .
                        SMEDAN  AT  A    CROSSROAD
 Smedan did recognize the importance of  MSMEs in an economy especially its clime in which the marginalized  MSMEs do not have access  to finance even though it contributes 70 percent  of working population and 50 percent of GDP  .Given the fact that it has a better structure is  still inadequate  to tackle myriad of challenges in the industry  To make the matters worse  ,definitely it does  not even   have a broad strategy to reach out to them ,even though it claimed to do so  .According to the Director general  Muhammad Naadari the strategy to touch the sector rested largely in its partnership with NERFUND and  MFBs .These are institutions that are already near comatose and  dead entities  among others  to execute the plan of going round these classes .Reorganizing Smedan with similar allied bodies and instutions into a coherent  system is a panacea to the brewing  storm . It will take care of 90million microenterpreneurs left unattended to by the latest SMECGS and even salvaged the sinking ship of formal financial system . A system that caters for all answers all .
With this ideology and adoption of neo Marxist free market economy as the most inclusive free market model [new generation—dual band ] ever contrived by man  with its peculiar Para --macroeconomic models  is a foolproof for every willing Nigerian to become a capitalist and a salvation crusade especially for the developing region. The GDP can grow  conservatively on the average 10 times to more than 20 trillion  prior to maturity of  Vision 2020 rather than the lethargic projection of  900 billion dollars in a period in which China alone if adopted this model could  grow  or be far bigger than  the present size of  world GDP .Our leaders are blind .They hardly  see nor can distinguish between black  and  white .That is their glory –a great ignorance and they cherish it  shamefully fighting in the house.
 This rough calculation does not include other markets noted in Nigeria nor even a full analysis of  microfinance vs. population market but noted briefly  the spread in government activities over the informal sector while allowing informal sector to retain its clumsy nature helping to refine and polish it  and being guided with relevant rules suitable to development of the grass root and orientation of the poor  .It means in a decade or within 20 years the nation can catch up with America .Economists and myopic policy makers may ask : Are you crazy ?  But that is the gospel .It means in a decade based on the seriousness of political capital or state will  the Nigeria could become a world leader but we are perpetually such an unserious nation .In  a  decade period , the U. S. GDP can never be more than 30 trillion let alone  40 trillion based on the rate at which it is growing and the  available macroeconomic  model being used which is outdated or has outlived its model utility  curve would not augur well to salvage her  sinking ship  .We are doomed if we keep endorsing international best practice and neoliberalism  that could not prevent the meltdown in America .
More so as it has reached a saturation level or its peak .In the next 50 years whether the model is adopted or not none of the advanced countries will be among the world  leading economies even with their weapon of mass destruction  .It will be worse for the world should this solution not  adopted .
Nigeria has potential to shoot even higher if we include all other identified markets and we carefully embrace local content , indigenization policy of 70s  and extremely domesticate local capital and nurture community and sovereign wealth funds around the world .Take a look at Lagos or Delta unarguably the richest states in the country , they should be  able control GDP  of say  1.5 or 1 trillion dollars  . Lagos does not need an introduction anymore as a popular state with a GDP of less than 4 trillion naira or 2.5 trillion  .But  the natural gas in Delta  state alone  contains over 40 trillion scf . which is far higher than similar wealth . in the United States put together .At least we can a feel it ,  how richer it could be if  tapped or exploited . Unfortunately by 2006 it was reported Nigeria had lost over 100 billion dollars since commercial production started in Oloibiri in 1960s –more than 12trillion naira at conservative prices .Nigeria is loosing trillion of dollars [not naira-get it right ] due to ongoing  capital flight crisis and highly retarded capacity building endeavor  since independence .Such model can also make the nation sensitive to this missing link .
This is NIGERIA time to  SHINE as late comers to development like elsewhere in the developing countries   .Let us forget sentiment and adopt this model .We are  building economy without tears or economy made easy for all irrespective of social status , tribes , races and diverse culture and nationalities is a unifier and especially explores the nation ’ s unique demography  . It banishes social ,  political and economic instability , eradicate crisis ,  eliminate armed robbery and  social inequality to  resolve every social disease and make the nation safer to live and secure to  abode . What else again do we want or are we waiting for  ?

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