FG Mulls Policy to Earmark Procurement Contracts for Women

The Minister of State for Industry, Trade and Investment, Mrs. Mariam Katagum, has said that the federal government is currently working on a policy that will earmark a certain percentage of public procurement for women owned businesses.

She also said all MSME groups and individuals would be granted level playing ground to apply and access government funding initiatives, particularly the MSME Survival Fund.

The minister spoke while she received the executive committee members of the NECA’s Network of Entrepreneurial Women (NNEW) Abuja, led by its
Chairperson, Mrs. Amina Zanna Ibrahim, on a courtesy visit to her over the weekend.

Katagum said: “Disabuse your minds about government contracts. We have this initiative that is going on about procurement processes for women.

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“We are trying to take it at a policy level so that all these procurement processes will at least, try to earmark a certain percentage for women owned businesses.

“But we have to take it at the policy level because the men who are taking all the contracts will not want you to come and compete with them.”

However, the minister assured the women that the proposed framework will ensure that female entrepreneurs get a share of procurement contracts going forward.
She added that already, the Infrastructure Concession Regulatory Commission (ICRC) is currently working to ensure that women are considered in future procurement.

The minister also assured that all government’s funding interventions, particularly the MSME Survival Fund scheme, which was created to ameliorate the impact of the COVID-19 pandemic on small business, will be administered on a level playing ground so all applicants can get equal opportunities.

Katagum added that she will consider it a major, if applicant are able to access the funds on merits and without intermediaries or any kind of influence.

She said: “When we first started this MSME Survival Fund, I told the vice president that I would think I am successful by the number of people that would say, they didn’t know anybody or they heard this on the radio, or their friends told them or they saw it on the TV-and they applied and they got it.

“And we’ve got quite a lot of testimonies of people who even said their friends told them to apply and they said leave me alone; and then suddenly, they saw that their friends got it.”

She however, promised that her ministry will work with the group towards realising a common objective to advance the interest of women owned enterprises at all times.
Earlier, Ibrahim had conveyed the women’s visit to the minister, seeking for better collaboration to better collaboration with the ministry.

To group, among other things, sought to partner with the ministry in the areas of information on government’s interventions that could benefit women as well as capacity building.



When policies conflict with reality

The saying, ‘desperate times call for desperate measures’ isn’t new to most people, including Nigerian policymakers. But a situation where the Nigeria monetary authority, the Central Bank of Nigeria (CBN), seems to imply it has little idea of the ravaging impact of the COVID-19 pandemic on Nigerian economy, leaves a sour taste in the mouth and makes one wonder how it can put desperate measures in place.

Often times, Nigerian policymakers have enacted policies that have conflicted with the country’s reality due to their poor perception or understanding of what the true state of the economy is.

To the surprise of most economists, the CBN stated clearly in a note published on its website that it expects Nigeria’s economic growth to decline by a meagre 1.03 percent. This is at variance with the thinking among analysts, economists, international bodies and even Nigeria’s Ministry of Finance.

The International Monetary Fund (IMF) in June revised further downward to 5.4 percent their economic contraction expectation for Nigeria from 3.4 percent. Zainab Ahmed, Nigeria’s Finance Minister, projected that the country would contract between 4 to 8.9 percent.

This begs the question as to what parameters the CBN’s optimism is based. We cannot but wonder whether the CBN has opted for ‘walk by faith’ rather than ‘by sight’ in what is glaring to all.

CBN’s second quarter outlook of seems to point to an almost certain possibility that Nigeria’s economy is headed for a V-shaped recovery after plunging quarter-on-quarter by 0.64 percent to 1.87 percent in Q1 2020.

This also creates a misleading illusion of Nigeria’s resistance to the COVID-19 pandemic. Hence, the question: Is the CBN insinuating a contraction by 1.03 percent is the worst impact the pandemic has on economic activities in Nigeria?

Given that the negative effects of the pandemic was felt more in the second quarter of this year, the CBN’s outlook is, at best, a wish and not realistic as factors that will support its optimistic stance are missing.

Nigeria’s Purchasing Managers Index (PMI) which is a leading indicator providing valuable insights into the state of the Nigerian economy in general and the manufacturing sector in particular, provides a picture of what the Nigerian reality is.

The PMI reading for Q2 2020 was below 50, signifying manufacturers and non-manufacturers pessimism on the state of the economy and this signals a contraction.

It was no longer business as usual for the Nigerian manufacturing sector which contributes over $30 billion to the GDP. COVID-19 induced disruptions in business supplies, fall in household demands etc, coupled with foreign exchange scarcity, took a toll on manufacturers in the last quarter. Many had to lay off staff while some cut salaries.

Worsened by rising inflation which has caused consistent weakening in households purchasing power amid job losses, many manufacturers and non-manufacturers , especially manufacturers of non-essential commodities, will see sales drop and profit margin shrink.

Also, Nigeria risks another year of underperforming budget as price of oil is yet to recover to levels above $60 witnessed in January 2020. As a result, the FG had to cut down its revenue expectation by 36.4 percent to N5.16 trillion.

Therefore, we employ the Nigerian authorities and policy makers to remain factual and realistic when reviewing and giving outlook for the economy. We hope that this will help drive policies and actions that will suggest the level of work that must be done in line with current reality.

We believe that CBN’s outlook is unrealistic given how its FX demand management activities and reluctance to unify Nigeria’s exchange rates have stifled business operations and driven away foreign investors from our markets.

Nigeria’s journey to recovery calls for desperate measures and we urge the CBN to start this by providing clarity on Nigeria’s FX rate position and how it hopes to clear dollar-demand backlog.