Microfinance and the challenge of failing states

The problem of poverty in Nigeria is not abating. At best it is getting worse and at worst it has gone beyond our capacity to manage. And this has nothing to do with the laudable policy of microfinance and its very successful implementation. Nigeria is at critical cross roads of its socio-economic development. The continued organised misgovernance and manipulation of religion and politics by vested interests have ensured that we get into a bind that is hard to break. Today, the poor in many parts of the country are no longer afraid of poverty because something worse than poverty has arrived. They fear for their lives. As things stand, the nation is in such a bad shape that in or out of recession, it makes no difference to the lives of most of the ordinary people. In Nigeria hard facts are risky to share but the man dies…..

There is incontrovertible evidence that most of the 36 states have practically become unable to meet the needs of their people. They exist only because it is politically profitable to some of our political class to continue to maintain this failed structure and leadership style. Not only are the majority of the states insolvent and unable to meet their financial obligations, they are flatly unable to provide safety and security to their people. And this is one of the parts of the Nigerian problem that everyone would like to avoid but the man dies……

Worse still, the institutions endowed with the capacity to secure them have been privatized. The police and, sometimes, the army whose primary duty is to protect the people, have been parcelled out to politicians and the privileged few on guard duty and as orderlies for all manner of people. Few are left for the real calling. As a result, the streets have been occupied by dangerous gangs who make sure that, in some rural areas, farmers no longer farm and traders no longer come to markets. The economic activity of the poor, which is the basis of microfinancing has been victimised and brought to a standstill. In such areas, one begins to wonder how the effectiveness of our microfinance programme can be assessed, as social collapse and insecurity continue to rubbish microfinancing.

A recent Channels Television presentation on the power supply challenges faced by artisans in Nassarawa state was as elixir for this piece. Although it was a rehash of the tale of woes we get from all over the country on the failure of governments to solve the basic problem, which everyone knows is behind the mass poverty in Nigeria–debilitating epilepsy of power supply. In that story, a spray painter and many other artisans, who seek to legitimately earn a living, spend all they make to provide power through generators. This is the same story everywhere and instead of declaring a national emergency on electricity we are busy splitting hair on what an Acting President could sign and not sign.; and following the same spending pattern that brought us to this shameful state – a battle of supremacy between the executive and the legislature, a bloated civil service of many ghost workers the source of whose entry to the service has never been found, translucent security votes and inflated contracts and more.

Following the Nassarawa story I decided to dig deeper on the economic activity of the poor in that area of Nigeria. The results are terrifying. As we sit in Abuja to postulate our shares of the 2017 budget, life has come to a standstill in many parts of the middle belt. At a point one wonders whether some of these states, including Nassarawa and Taraba, are not worse hit by Boko Haram than the North East. I don’t know how many of us are aware that life in many parts of that area, especially outside their state capitals, is a nightmare. How many of us know that there are days reserved for armed robbers to rob the people in some places and that there are days when people in some villages literally dress up and wait to be robbed by armed robbers? The robbers come on certain market days as a matter of appointment, to rob the people in some villages outside Lafia in Nassarawa state. I was told that the robbers come on market days to rob those who sold cattle. It was alleged that the police is aware and feeling inadequate to confront the robbers, often close by 6pm and return to their bases, leaving the people to their own devices.

This further strengthens the argument that Nigeria as presently constituted cannot serve the needs of a modern state. The borders are wide open and trailer loads of strangers, most of whom do not speak any Nigerian language poured into Taraba when Sambisa Forest was attacked, according to the Governors Chief of Staff. The strange visitors entry was turned to a political discourse and nothing happened.

This story of the artisans in Nassarawa is not a unique. It is the story of every part of the country. The absence of electricity, among other tools of economic empowerment, has made it impossible for Nigerians to depend on themselves. They have been deprived of the opportunity to exercise their talents and therefore, poverty has become the destiny of many children yet unborn. Poverty reduces the quality of the human person. The poor often sound incoherent and appear somewhat unintelligent because they have little learning and no time to think outside the box of hunger and destitution. They are forced to focus on the immediate stomach infrastructure challenges to the exclusion of any futuristic engagement. Some governments around the world, including North Korea, have at one point or the other used mass emiseration to elicit loyalty from their people.

Microfinancing cannot succeed in an environment where people have suspended their will and enterprise and resorted to opportunism and dependence on prebendalism. The essence of microfinancing is to tackle poverty by empowering the poor who are economically active. This is what prompted the federal government to launch the National Microfinance Policy, which has gone a long way to tackle the endemic poverty across the country.

Today, microfinance banks, numbering about 1000 have been established and working all over the country. However, while considerable progress has been made in canalizing financial resources to the poor and boosting their economic activities, it does appear that much has not been achieved. As more microfinance institutions get into the fray, more people seem to get into the poverty net. There are more educated beggars today than in 2005. Many are beginning to think that the microfinance sector is failing in reducing poverty. This may be a wrong impression but it is justifiable based on facts outside the control of the microfinance sector.

It is hard to talk about microfinancing without talking about poverty, its raison d’eter. Nor can we discuss poverty in Nigeria without mentioning the rapidly shrinking ability of the state to protect the citizens. How does a microfinance institution deal with the poor in a state where people sleep in churches and mosques most nights? How do people survive in a state where hotel management evacuates guests because an attack was expected? This is what is going on in the villages of Nassarawa state and perhaps, other surrounding states. I hope Boko Haram has not left and changed tactics while we continue to bombardSambisa. Could it be that the robbers are not mere armed robbers? Could it be that Boko Haram has stopped holding territories but makes do with ensuring that the place is destabilised? As I said there are certain topics we do not like to discuss but microfinance fails wherever the state fails.

Emeka Osuji