Lagos Nigeria - November 7, 2016:
It gives me great pleasure to provide this update on the activities of the Lagos State Employment Trust (LSETF). We are aware that since our inauguration in March 2016, Lagos residents have been eagerly awaiting the commencement of our activities, especially during this challenging economic period.
We understand this eagerness and appreciate the patience Lagosians have demonstrated. Since our inauguration on March 5, 2016 the Board has held eight monthly meetings and four extraordinary meetings to deliberate on issues related to strategy, development of the operating guidelines and other matters necessary to ensure the Secretariat is not only fully operational, but also set up in adherence with best-in-class governance principles. These activities have ensured that the Fund is built on a strong foundation to ensure it successfully delivers on its mandate to create jobs for Lagos residents.
The Journey so Far: Update on our Activities
Our mission, “enabling Lagos residents realize their aspirations by providing leverage and access to finance” means we plan to not just provide funding but also support businesses in other areas that will support their success and sustainable job creation. To ensure this vision is properly achieved, the Board of the LSETF carried out the following activities since its inauguration
The Fund commissioned and completed a research study across the 20 Local Government Areas (LGAs) in Lagos State, to specifically identify:
- Challenges faced by Micro, Small and Medium Enterprises (MSMEs) that inhibit growth and job creation;
- Funding challenges faced by MSMEs and factors that inhibit them from raising capital;
- Challenges faced by microfinance and deposit money banks in providing sustainable funding to MSMEs;
- Areas Government can support both MSMEs and financial institutions to deepen access to finance; and
- Policy initiatives that can enhance the overall business environment in Lagos State.
A Board Charter for governing the operations of the Board of Trustees (“the Board”) of Lagos State Employment Trust Fund (“LSETF”) was developed to outline the authority, responsibilities, composition and operations of the Board. It also ensures professionalism, fairness, transparency, accountability and responsibility. In addition to the Charter, the Board constituted four Board Committees to enhance its oversight function. These committees are: Audit & Risk; Governance: Stakeholders; and Credit & Investment.
The Board has also developed a Whistle Blowing Policy to create a work environment where employees, contract workers, vendors and service providers, beneficiaries and other stakeholders are able to report concerns on misconduct, irregularities or malpractice, without fear of harassment and/or victimization and with an assurance that their concerns will be taken seriously, investigated, and appropriate action will be taken.
Since its inauguration, the Board of Trustees embarked on several strategy sessions to define the mission, vision, core values and strategic framework to guide the Fund’s activities. After the completion of the research exercise, the Board working with its appointed consultants, developed a strategic framework articulating the goals of the Board, the key interventions designed to enhance job creation, and the supporting infrastructure needed to deliver the set goals. This exercise has now been concluded and approved by the Lagos State Executive Council.
Finally, in adherence with Section 6 of the Lagos State Employment Trust Fund Law of 2016, the Board has presented the Operating Guidelines outlining the proposed interventions and eligibility criteria for the Lagos State House of Assembly’s consideration. In demonstration of the legislative commitment to the objectives of the Fund, we have been assured these guidelines will be given priority consideration by the House, and approved in the earliest possible time.
Strategic Framework and Targets
In line with the LSETF's vision of creating employment and entrepreneurship opportunities for all Lagos residents, we have a set target of providing financial support to over 100,000 MSMEs within the next 3 years; support the creation of 300,000 direct and 600,000 indirect jobs; and add over 200,000 new taxpayers to the tax register. To also ensure sustainability of the Fund, we will aim to raise a minimum of N25 billon from domestic and international donors, in addition to N25 billion committed by the Lagos State Government.
Our interventions will provide loans to micro, small and medium enterprises at a single digit interest rates per annum; we will also provide training and capacity building support to the business we finance, giving them the necessary technical support to drive growth and job creation. The businesses we support must demonstrate capacity to repay our loans; be owned by Lagos residents duly registered by the Lagos State Residents Registration Agency (LASRRA); show evidence of tax payments to the Lagos Inland Revenue Service (LIRS); and have valid Bank Verification Numbers (BVNs). In addition to our MSME financing schemes, we will also train unemployed residents to either take up identified jobs or run their businesses. The detailed guidelines will be published as soon as we receive House of Assembly approval.
We will support the thriving startup ecosystem by providing work spaces, acceleration support and seed funding to ensure Lagos remains the most attractive pipeline in Africa for investors looking to bet on the next African unicorn.
Finally, though financing MSMEs is at the heart of what we do; it is not all we set out to do. We will constantly develop policy suggestions on how to improve the business environment in Lagos, providing leverage for businesses to grow. We will also promote our beneficiaries, and other businesses operating in Lagos, providing access to new markets, a critical driver of business growth.
To minimize unforeseen hitches at rollout, we will pilot the micro and SME lending and schemes as soon as the House of Assembly approves our Guidelines. The Fund will identify beneficiaries leveraging the experience of acquisition partners, who are recognized organizations that have built credible track record working with MSMEs. These partners include business development organizations like FATE Foundation, trade associations like the National Association of Small Scale Industrialists (NASSI), religious organizations, and other institutions like the Enterprise Development Centre (EDC), House of Tara, Max.ng and Konga; amongst others. In addition, we have appointed PriceWaterHouse Coopers to manage the application and selection process to ensure the necessary governance process is adopted, and beneficiaries are selected in a transparent manner. The Fund will publish the list of beneficiaries selected during the pilot in at least two national newspapers and on our website, www.lsetf.ng.
Once the pilot phase is completed, we will rollout our loan schemes in all 57 LGAs and LCDAs across Lagos State. The full rollout will see us visit all LGAs to hold stakeholder sessions, where our staff will educate applicants on the application process, and the eligibility criteria for our various schemes. We are also in the process of setting up liaison offices in 20 LGAs, to bring the Fund’s activities closer to the people, and increase our points of representation to serve Lagos residents.
In conclusion, we have spent considerable time building this process to maximize the Fund’s impact, in line with the vision of Governor Akinwunmi Ambode. The process of rolling out the Fund is now approaching the finish line, and with support of our legislators, other MDAs and several stakeholders, including the Press, we are confident of delivering a best in class framework to drive wealth and job creation in Lagos State.
Itesiwaju ilu eko, l’oje wa l’ogun.
For further enquiries please contact:
The Lagos State Employment Trust Fund (LSETF)
16, Billings Way, Oregun, Ikeja, Lagos