The long delay in releasing the second tranche of the World Bank Growth and Employment in States, GEMS, project grant was because majority of grantees failed to meet agreed milestones prior to their selection to participate in the scheme, officials have told PREMIUM TIMES.
They also said that the federal government’s decision to restructure the programme by reviewing its design to align with new policies and priorities also contributed to the delay.
However, indications are that the GEMS project office in Abuja is gearing up to commence payment of the second tranche of the grant to grantees who have satisfied the conditions to proceed to the next phase of the programme.
Officials familiar with the programme told PREMIUM TIMES the payment, which would be in batches, would be completed within the next two months.
The GEMS project
The $160 million grant project was approved by the World Bank Board on March 17, 2011 to help increase growth and employment in Kaduna, Kano, Lagos, Jigawa and Cross River States.
The implementation timelines showed the project actually began in July 2013, while mid-term review was for June 15, 2016 and completion dateline for December 30, 2016. A revised schedule showed it actually began on October 15, 2014, with closing for September 7, 2018.
Since October 2016, grantees, mainly small and medium scale entrepreneurs, SMEs, under theYouWiN programme, got the first tranche of the grant, between 25 and 55 percent, capped at about N10 million, to help finance the setting up of various employment generating enterprises.
The release of the second tranche, between 45 to 75 per cent, was dependent on grantees successfully meeting agreed milestones, based on a monitoring and assessment report by KPMG, the project’s independent monitoring and supervision consultants.
Months of delay
But, months after the first tranche, the long delay in releasing the second stirred speculations among anxious grantees about the fate of the project.
Some of the affected grantees said they left their paid jobs to enlist in the programme. Others said they were concerned with either the factory spaces they rented, or equipment they hired for the businesses, which have remained unused and piling debts they hardly anticipated.
But, PREMIUM TIMES investigations at the GEMS office at the Federal Ministry of Industries, Trade and Investment in Abuja revealed only 25 per cent of the grantees were able to meet the agreed milestones.
“It was a sad development when KPMG, our independent monitoring and supervision consultants, came back with its report at the end of its visit to the grantees’ project sites in the company of some World Bank officials,” GEMS monitoring and evaluation specialist, Emmanuel Amile, told PREMIUM TIMES.
“Most of the grantees either collected the first tranche grant and abandoned the scheme, or were not using the funds appropriately to execute the business plan they presented to the programme,” he added.
Project details withheld
The officials were reluctant to give specific details about the current status of the project. The project coordinator, Kofi-Boateng Agyen, did not respond to a mail sent to him by PREMIUM TIMES for confirmation of the information provided by Mr. Amile on his behalf as at press time.
“You can’t come here and expect we give you all information, just because you asked for it. We can also tell you that it’s confidential. We also have to protect the grantees’ confidential information,” one official told our reporter.
But, a June 30, 2017 project Implementation Status Report published on the Nigerian section of the World Bank website by the project coordinator, Kofi-Boateng Aqyen, showed a total of 274 grants were disbursed to SMEs, 225 new grants signed, with over 600 business plans under review for further financing.
Other achievements included 65,535 enterprises captured on the BIG platform, out of which 48,167 completed registration, while 5,674 entrepreneurs trained under YouWin programme.
About 2,195 SMEs were offered various interventions in consulting services, training, subsidies to hire accountant or marketer, grants to pay for accountancy or marketing firm services and small grants capped at $40,000, and training for 40 local consulting firms.
Mr. Amile said there was no room for any laxity by grantees under the project. He blamed the delay in releasing the second tranche grant to the time it took to properly scrutinize and audit the projects, to find out what the first tranche funds were spent on.
“We are putting pressure on the grantees right now. We have told the monitors, if all the milestones are not met, we may not be able to process the second tranche payment.
“Within the next two months, we should be in a position to complete the process to pay all those who met the milestones. The payment is going to be in batches. We are not going to wait till everybody has finished,” he said.
Further investigations revealed the delay to release the second tranche of grant followed the project restructuring by implementing agencies, namely the Federal Ministries of Industries Trade and Investment as well as Finance.
Although the GEMS project was aimed at increasing growth and employment in participating states, it was learnt that the government requested its restructuring, by reviewing the design, to realign with its new policies and employment initiatives to be funded by the loan.
In addition, the Finance Ministry also asked for the project to be adjusted, to support government’s ‘Agricultural Transformation Agenda’, and theYouWin business plan competition.
A Project restructuring proposal published on the World Bank website on August 3, 2017 also indicated the level-two restructuring would allow for adjustments project components and costs as well as grant special drawing rights, SDR.
The first component, focused on improved investment climate, previously funded 100 percent by UK Department for International Development, DFID, would now benefit from $5 million funding from International Development Association, IDA, a World Bank agency.
Under the new arrangement, the SDR for improved investment climate, SMEs investment fund, non-consulting services, consultant services, training, workshops, study tours and operating costs would be reallocated.
Also, revised indicators would be modified to make them more realistic, measurable, and in line with the project activities.
Closing date extended
To speed up implementation and allow the new SME investment fund to be functional and achieve results, the project closing date would be extended by 12 months and 23 days, from September 7, 2018 to September 30, 2019.
The implementation status report showed that since mid-November 2015, the project encountered problems, due to serious implementation challenges, which resulted in “very low disbursements and declining likelihood of realizing its objectives.”
The report showed that as at July 19, 2017, four years after its implementation, only 39.04 percent of the total $160 million allocation for the project was disbursed.
Substantial operational risks
The World Bank risk assessment report found “substantial risks” in many of the project’s categories, including political and governance, macroeconomic, technical design, institutional capacity for implementation and sustainability.
The assessment described as “moderate” risks associated with sector strategies and policies as well as environment and social issues.
Despite overall risk rating currently adjusted from “moderately unsatisfactory” to “substantial” on both development objective achievement and implementation progress, GEMS officials insist the project was on course.