Project description

Title: Pro-poor Growth and Employment Promotion in Nigeria (SEDIN)
Commissioned by: German Federal Ministry for Economic Cooperation and Development (BMZ)
Country: Nigeria
Lead executing agency: National Planning Commission
Overall term: 2011 to 2014 (first phase)

Context

Nigeria’s regulatory and institutional framework is not conducive for micro, small and medium-sized enterprises (MSMEs), and such enterprises do not have adequate access to financial services. The GIZ programme of support for sustainable economic development in Nigeria therefore facilitates key state actors as well as members of the financial and business sectors in effecting reforms of the business and investment climate and to enhance access to financial services for MSMEs. This is in line with Nigeria’s national development strategy, the ‘Vision 20:2020’, and the Financial System Strategy 2020 (FSS 2020).

Objective

Micro, small and medium-sized enterprises enjoy improved access to financial services and employ an increasing number of people.

Approach

The target groups of the programme are the owners and employees of MSMEs, as well as members of other economically active, low-income households. Federal level support is intended to have an impact throughout the country, while at the same time, a range of measures is also being planned for the state and local levels in Niger and Plateau States, as well as a third state which is still to be selected. The programme is divided into the following three components:

Financial sector reform – This involves support for implementation of the FSS 2020, a review of the microfinance policy, regulation and certification of microfinance banks, and the introduction of micro-insurance and value chain financing.

Enabling environment for business – Support will be provided for reforms at federal, state and local levels that improve the enabling environment for MSMEs. Examples include improvements to land and company registration, the taxation system, and value-chain specific issues.

Support for Nigeria’s regional economic integration in the West African sub-region (ECOWAS) – Here, the programme will foster the implementation of ECOWAS protocols, for example for the facilitation of trade and harmonisation of taxes, and encourage improved regulation of the financial sector in West Africa.

The promotion of specific agricultural and non-agricultural value chains will help to diversify the economy. At the same time, it will also allow the programme to gauge the effects of the reforms being promoted in all three components, and to design new reforms appropriate to the needs of the target group and the prevailing conditions.

In its activities, the programme will integrate capacity development measures for public, private and financial sector actors. Wherever possible, the experiences gained from promoting the selected value chains will be transferred for the benefit of other supply chains, especially where they are relevant to financial system development and the regulatory framework.

Even at the outset, plans exist for the later scaling up of programme measures in order to extend their effectiveness and sustainability. The measures supported in individual states will be seen as pilot projects, and the results will be shared with other states in a process of peer-learning.