Intervention fund: Nigeria’s creative industry to provide 300,000 jobs

By Chioma Obinagwam

The Central Bank of Nigeria (CBN) and the banks under the aegis of the Bankers’ Committee, at the weekend disclosed that it is set to create about 300,000 jobs over a five year period, a percieved outcome of the N200 billion intervention fund scheduled for imminent disbursement to the creative industry.

With an all time high of 23.10 percent as at third quarter (Q3) 2018, Nigeria’s rising unemployment rate has become a major subject of debate among top echelons of government, consistently seeking viable ways to address the issue.

Although previous administrations have made concerted attempts at tackling the menace, their efforts have not yeilded the desired results, hence the search for a more effective approach to the issue remains.

Interestingly, Nigeria’s creative industry appears to be one of the many options available to the government, having contributed about N239 billion to the nation’s Gross Domestic Product (GDP) in 2016.

Herbert Wigwe, one of the Committee members who is also the Chief Executive Officer (CEO) of Access Bank stated that the intervention, which will take place in four strata of the creative industry, that is movies, music, IT and fashion is aimed to ensure that the entire value meets world class standards.

“As s starting point, it will lead to about 300,000 employment in terms of number of people who are employed over a five year time span. It will lead to significant accretion as far as Foreign Exchange (Forex) is concerned coming from each of the verticals. It will also lead to significant savings in the textile industry,” he highlighted

He noted that the loans will be disbursed at single-digit interest rate with a maximum tenure of 10 years.

He said, “The loans are for a maximum of 10 years, they are single-digit interest rate loans and reflective of the fact that in these specific industries, what they require is long term financing at single-digit; while we will ask for collateral it will be flexible. I think it is a big initiave to our country.

Although similar interventions have been made in the past, collateral remains a major challenge to accessing such loans.

Nevertheless, Wigwe was quick to allay the fears of prospective beneficiaries of the loans, stating that it would be flexible and hinged on various collateral such as personal guarantees, collateral registry and the assets being financed.

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On the issue of eligibility criteria, the CEO noted that participants will be subjected to thorough screening.

“First of all, it must be the primary business of the person. It is very important. There must be some form of equity. We are taking into consideration the specific circumstances around industry participants.

“… It’s a big catchment area and we believe it’ll create the impetus for longer term fund providers to come in and it will create room for expansion in terms of what this fund is put into,” he noted.

Meanwhile, Nigeria’s Minister of Information and Culture, Lai Mohammed had said that the creative industry is one area where the country has comparative advantage and capacity to deliver the economy from mono-economy and noted the Federal Government’s resolve to incentivise the sector.

Corroborating, Isaac Okorafor, Director of Communications at CBN (Nigeria’s apex bank) noted that the initiative is timely going by the stability recorded across all the macro magnitudes, which would serve as the stimulus for growth in the economy.

Strikingly, Forbes recently reported that Nigeria’s movie industry-Nollywood, also a segment of the creative industry, is now an $800 million industry and the second largest in the world, after Hollywood– even bigger than India’s Bollywood on per-capita basis.

However, with this support from the government and private sector, it is expected not only to boost the employment sector but also shore-up Forex reserves.

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