Entrepreneurs in Nigeria face a multitude of challenges with starting up and doing business. Access to finance, high costs and administrative burdens associated with registering a business hinder small entrepreneurs from entering the formal economy.
Growth and Employment in States (GEMS) is an employment project supported by Nigeria’s Federal Ministry of Trade and Investment (FMTI) and funded by the World Bank and the United Kingdom’s Department for International Development (DFID). The project is aimed at job creation and increased non-oil growth in specific high potential value chain sectors. DFID is providing a grant of £90 million and the World Bank a concessionary loan of $160 million. GEMS will achieve an overall internal rate of return of 48%. A key target is the creation of at least 100,000 jobs directly in the selected sectors. The program targets at least six economic sectors and aims to support small- and medium-sized enterprises (SMEs).
Based on a Growth and Employment study, six industries were identified for intervention in order to improve the value chain, create wealth and reduce poverty. The six industries are Information and Communication Technology (ICT), Entertainment, Wholesale and Retail, Construction and Real Estate, Hospitality and Tourism, and Meat and Leather. The project is flexible, and will adapt to market changes and new opportunities for growth potential.
The target impact of GEMS 1 is “to increase growth, income and employment, especially for poor men and women, in meat and leather markets in selected states and nationally”. The target outcome is to “improve the performance and inclusiveness of meat and leather sector market systems that are important for poor people. A common GEMS1 strategy for the red meat and leather industries is support to Business Membership Organizations (BMOs) and Advocacy involving the development/upgrading of regional BMO and national association capacity for: (1) advocacy for business environment reforms to underpin meat and leather industry competitiveness; (2) the provision or facilitation of demand-driven services for BMO members; and, (3) the introduction of improved practices aligned with systemic economic development.
GEMS2 promoted the growth of Nigeria’s construction and real estate sector, in order to increase incomes and employment opportunities of those working in the sector.
GEMS3 works with private and public stakeholders at National, State and LGA levels to build and deliver a systematic framework that will make it easier to do business in Nigeria, leading to lasting improvements in economic opportunities for the poor, especially women. GEMS3 seeks to achieve this by implementing interventions to generate change, using a Business Environment Improvement Framework (BEIF). This BEIF is currently being applied in eight states; Kano, Kaduna, Lagos, Cross River, Kogi, Jigawa, Zamfara and Katsina States. GEMS3 Implementation Strategy is to systematically implement a Business Environment Improvement Framework to make it easier to do business in Nigeria. This Framework was tested in Kano, Kaduna, Lagos and Cross River. Upon validation of the key assumptions lying at the heart of the Framework, it was then scaled up to 4 more states (Kogi, Jigawa, Zamfara and Katsina) from July 2013.
The Framework envisages interventions pertaining to the investments, land and tax systems and is sufficiently flexible to allow for intervening in key sectors of economic growth in Nigeria to increase the overall impact of GEMS3.
By 2017, GEMS3 will have helped reduce the cost, time, and number of procedures for starting a business in Nigeria, and promoted the key benefits of business registration, including improved access to finance and business development services.
At the federal level and in Lagos State, GEMS3 will have facilitated the development of a Nigerian Policy Framework for Investment toolkit (based on the OECD model). This toolkit will encourage and enable joined up investment policy making at both federal and state level to identify and remove blockages.
GEMS 4 seeks to improve income and employment opportunities within Nigeria’s wholesale and retail sector, particularly for the poorest and most vulnerable.
The project aims to create and sustain 10,000 full time equivalent jobs and increase incomes for 500,000 people. While Nigeria’s wholesale and retail sector is growing quickly, inefficiencies within the distribution chain have resulted in lower prices for producers, lower wages for employers, lower profits for businesses and a higher cost of living for consumers. GEMS 4 seeks to tackle the underlying inefficiencies in the system and work towards promoting pro-poor growth in the sector.
The project is working with business associations, service providers, producers, retailers, wholesalers and other actors involved in the market, linking them so they work together and serve each other better. Additionally, the project is building local capacity and changing market incentives so the sector better meets the long-term needs of the poor. GEMS4 is currently working in Lagos state and will ultimately span Kano, Kaduna and Cross River states.
The GEMS suite of projects are based on the Making Markets Work for the Poor (M4P) approach. This methodology targets sustainable improvements in market outcomes by altering the incentives that the market as a system provides to participants. It addresses major government and market failures in the system, thus bringing about systemic change. Improving the incomes of the poor, especially women and the young, is an explicit goal of M4P programmes.