World Bank GEM Project: Group wants EFCC to probe alleged diversion of $35mn

Minister of Trade and Investment, Okechukwu Enelamah
Minister of Trade and Investment, Okechukwu Enelamah

A nongovernmental group, Human and Environmental Agenda (HEDA), has asked the Economic and Financial Crimes Commission (EFCC) to probe the Minister of Industry, Trade and Investment, Okechukwu Enelamah, over alleged unlawful diversion of $35 million meant for the Growth and Employment (GEM) Project.

The GEM project is a Federal Government initiative funded by the World Bank International Development Association in conjunction with the United Kingdom Department for International Development, to increase growth and create youth employment in small and medium-scale enterprises in Nigeria.

But, in a petition to the EFCC acting chairman, Ibrahim Magu, HEDA accused the minister of diverting the funds and engaging in a series of abuses the anti-graft agency should look into as a matter of urgency.

The minister, through his spokesperson, Bisi Daniels, has rejected the accusations, describing them as false and misleading.

Details of the petition

In his petition, HEDA executive director, Lanre Suraj, said the project approved by the Senate in 2013 for a lifespan until 2018, was to be financed by a $160 million World Bank loan and £90 million grant from DFID to support about 4,000 SMEs across Nigeria.

Mr Suraj said there were strong suggestions that on assumption of office in 2015, Mr Enalamah made attempts to convert the GEM project financing to an SME fund earmarked to benefit only 25 companies.

He said the minister ignored the project guidelines, which required the coordinator and assistant in charge to be a Director and an Assistant Director from the civil service.

Rather, HEDA said the minister brought his former personal staff, Ugo Ikemba, from his private equity company, African Capital Alliance as coordinator of the project, on contract employment and salary of N5 million a monthly.

According to HEDA, the joint committee of Finance, Commerce, Industry, Loans and Debts of the House of Representatives, following a motion by Mark Gbillah, had investigated the allegations.

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Part of the resolution of the committee, HEDA said, was a directive to the minister to rescind the alleged conversion of the GEM project to an SME fund.

The group said the minister was also asked not to renew the contract of his former employee as coordinator of the project.

Besides, the rights group said the Head of the Civil Service of the Federation was also directed by the lawmakers to immediately post a competent Director and an Assistant Director to the GEM project as Project Coordinator and Assistant Project Coordinator respectively, in line with the GEM project frameworks and guidelines.

HEDA said petitions were sent to the president Muhammadu Buhari, the minister of finance and the World Bank, detailing Mr Enelamah’s contraventions, particularly, the ministry’s refusal to implement the project in accordance with agreed terms.

Following the expiration of the project lifespan in November 2018, HEDA said the World Bank approved a three-month extension for Nigeria until March 2019.

If the extension was not granted, HEDA said a monitoring report on the implementation of the project revealed a balance of over $100 million from the funding would have been returned to the World Bank.

HEDA said the EFCC intervention was expedient to save the project from “the monopoly power and influence of the minister in breach of the legal framework and guidelines for the smooth administration of the project.”

Minister Reacts

However, in a rebuttal sent to PREMIUM TIMES on Sunday, Mr Daniels said contrary to all the allegations against the GEM project, its implementation has been a success story.

“It has contributed to the diversification of the Nigerian economy, by supporting sectors that have high growth potential and create massive employment,” Mr Daniels said.

“The project supports micro, small and medium-sized enterprises (MSMEs) operating in five high potential sectors of the economy, namely ICT, entertainment, tourism, hospitality, light manufacturing, and construction.

It also offers more direct support to firms channelled through the Business Innovation and Growth (BIG) Platform – to provide various training, technical assistance and grant schemes, he added.

He said after three years of operation, the World Bank rated the GEM project “unsatisfactory and underperforming” and considered scrapping it at the end of 2016.

Following reports the project had low deployment and was not meeting its job creation and economic development objectives, he said its implementation had to be restructured.

The project restructuring, the minister’s spokesperson explained, involved the ministry and the World Bank team modifying their existing equity window to an SME investment fund, to “boost growth, create jobs and increase entrepreneurship.”

He said the restructuring was necessary to strengthen the management team to deliver on the promise of the GEM Project and deploy more funds directly to SMEs, as opposed to using intermediaries.

Also, the restructuring was to improve the coordination and partnership with the World Bank and extend the duration of the programme to ensure the results can positively affect and reach more Nigerians.

Minister Lists GEM Achievements

Mr Daniels listed some of the achievements of the project since inception to include over 950 SMEs benefiting from GEM grant so far across the different grant windows, with additional 200 medium and small scale enterprises in the pipeline for the grant before closure date.

Other achievements include about 27 local consulting firms Business Development Service Providers (BDSPs) trained to deliver technical services to MSMEs across the country; 774 MSMEs benefited from the consultancy services provided by the BDSPs, and over 21,000 MSMEs receiving technical assistance, including training by EDC/Lagos Business School.

Besides, he said the project supported the entertainment industry by funding two online music distribution companies, to reduce piracy and improve the income of content developers in the music industry; assisted two innovations hubs to support start-ups and accelerate e-business technology across the country.

“Within the project period, 195 SMEs will benefit from these services; 400 artisans were trained in Video and Sound editing under support to the entertainment industry; 600 youths were trained to promote quality of service and affordable housing development in Nigeria.

“As part of the Cluster Unit activities of the Project, market analysis was conducted to identify market failures that have impeded the growth of SMEs across the 5 GEM intervention Sectors (ICT, Entertainment, Hospitality and Tourism, Construction and Light Manufacturing Including Agro & Allied Processing).

“GEM supported projects, including the You-Win youth entrepreneurs grant scheme; Project ACT (a film industry support project), Nigerian Entrepreneur Development Programme (NEDEP). The project has so far, catalysed the creation over 26,000 jobs in its five intervention sectors,” he said.

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