Former CBN Deputy Governor Kingsley Moghalu advises against the Central Bank of Nigeria directly funding SMEs and MSMEs, suggesting alternative support mechanisms.
The Central Bank of Nigeria’s (CBN) practice of directly funding Small and Medium Enterprises (SMEs) as well as Micro, Small and Medium Enterprises (MSMEs) has been criticized by Kingsley Moghalu, an economist who previously ran for President.
Moghalu contended in a statement released on Saturday through X that microfinance banks would be better suited to receive pipeline capital.
He additionally condemned Africa’s focus on increasing Gross Domestic Product, noting it as an erroneous form of veneration.
A more comprehensive approach to development was advocated by Moghalu, who identified five crucial pillars required for Africa’s progress.
He believes that Africa’s attention should be on converting scientific breakthroughs into profitable products capable of propelling economic expansion.
To promote the development of Africa, the primary focus should be on cultivating a native perspective or worldview towards growth and progress. Secondly, an effective approach to alleviate poverty must involve providing quality education and training in productive skills. Lastly, it is crucial to guarantee access to power infrastructure for sustainable advancement.
“Next, a plan to combat poverty based on proficient education and skills. Certain individuals are meant to generate riches, while others excel in generating ideas or providing entertainment. There are also those who lead and serve their communities. Some may achieve fame, whereas some remain anonymous; nonetheless, the most valuable gift is finding happiness and satisfaction with the ability to support oneself as well as one’s family.”
“Make sure that the electric power infrastructure is readily available.”
As per his viewpoint, the fourth fundamental element entails directing scientific discoveries and advancements towards commercialization by means of extensive manufacturing.
“Fourthly,” he suggested, “we should direct scientific advancements and innovations towards the market by means of mass production.”
The fifth step is to secure entry to “pipeline capital” for small and medium-sized enterprises (SMEs), micro, small, and medium-sized enterprises (MSMEs) at cost-effective interest rates via microfinance institutions. This task rests with central banks; however, it does not involve direct funding by the central bank itself.
