SMEs and window of opportunities

Operators in the small and medium scale segment of the economy would soon be able to heave a sigh of relief.

This is based on the series of networking opportunities that are being provided by different stakeholders in the economy to enhance their capacities.

Even so,, some industry watchers have lamented that the country has not given the sub-sector the necessary attention for it to contribute maximally to the development of the economy.

For instance, the Chairman, African Centre for Business Development Strategy and Innovation, Mazi Sam Ohuabunwa, decried the low contribution of entrepreneurs, most importantly players in the small and medium scale enterprises, to the gross domestic product of the country.

Ohuabunwa, who made this submission at a media parley in Lagos, lamented that most developed economies had thrived based on their efforts at developing entrepreneurial skills among their citizens as well as providing conducive environment for them to operate.

He said there is the urgent need to conscientiously transform the structure of Nigeria’s economy by propelling positive industrial trends through growth in the small and medium scale industrial group, and eventually in the large scale manufacturing sector.

He said the SME sector holds the secret to Nigeria’s economic prosperity, explaining that evidences from different parts of the world, particularly from developing economies highlight the critical importance of SMEs to economic rebirth.  “In broad terms, SMEs contribute to increased economic activities, and provide what the International Labour Office classifies as “decent” jobs.  They also serve as nursery for the larger firms of the future, and as the next important step up for expanding micro enterprises, they contribute directly and often significantly to aggregate savings and investment, and they are involved in the development of appropriate technology,” he said. 

Statistical analysis

Ohuabunwa also cited a World Bank Statistics indicating that as at 2012 Nigeria had a new business density (a measure of the growth of entrepreneurship) of 0.91. Though this represents an appreciable growth from its rating in 2004 when it had new business density of 0.32, the country is still significantly behind such developing economies as Uganda (1.17), Tunisia (1.52), Malaysia (2.28), South Africa (6.54), and Singapore (8.04).

He noted that in the highly industrialized West, economy of the 1970s-2000s characterized by reliance on big business and mass production, has given way to a so-called entrepreneurial economy. “In the emerging countries, most notably the BRICS countries, impressive growth has been driven by a veritable entrepreneurial revolution. Even in the least developed countries, where aid dependency is high, donors have been shifting the emphasis in development cooperation towards private sector development.

Hindrances

Ohuabunwa, who was one of the economic think thanks of the present administration, said it was unfortunate that developments in this sector remain a far cry from the quantity and quality required to effectively fire up the economy.  “Issues of infrastructural inadequacy, weak funding and unaffordable financing, low entrepreneurial capacity, corruption, cheap foreign-made goods that choke locally made goods out of the market, coupled with a barrage of policies that appear insensitive to the existence of these challenges, all combine to mitigate against meaningful progress in this sector in Nigeria,” he said, submitting that there is the urgent need to conscientiously transform the structure of Nigeria’s economy by propelling positive industrial trends through growth in the small and medium scale industrial group, and eventually in the large scale manufacturing sector.

Networking opportunity

Ohuabunwa was optimistic that the 2014 Annual National Summit on Entrepeneurship and Innovation, being put together by his centre and scheduled to hold at Sheraton Hotel, Ikeja, Lagos, on November 20 and 21, would provide the necessary impetus for young entrepreneurs to learn from the bigger ones.

He said the centre has concluded plans to bring well known successful entrepreneurs, such as the president of Dangote Group, Aliko Dangote, the founder of GT Bank Fola Adeola, the founder of United Bank for Africa, (UBA) Mr. Tony Elumelu, and many other local and international successful entrepreneurs to share their stories on how they became successful entrepreneurs despite the obstacles they grapple with in the country.

He said the event will bring together policy makers, financial intermediaries, industry leaders, business promoters, business researchers, professionals, and budding entrepreneurs in Nigeria and the West African sub-region to network and share ideas, question paradigms, challenge status quo, and generate creative solutions to contemporary issues revolving around the use of entrepreneurship and innovation to stimulate economic renaissance.

He said the forum will also create opportunity for business mentorship, and for budding/aspiring entrepreneurs to interact with and learn from business success stories; facilitate the adoption of appropriate technology to drive development in the SME sector; create opportunity for the celebration of successes (by government and private sector organizations), and realign to confront current and future challenges as well as promote innovation and challenge young Nigerians to greater creativity.

He said the recent introduction of entrepreneurship education in Nigerian universities is a step in the right direction, urging faculty members and university students to seize the opportunity to interact with both public and private sector drivers of entrepreneurship in Nigeria.

Meanwhile, Union Bank of Nigeria Plc, in partnership with the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has said it is also sponsoring the 2014 edition of the annual SME event Market Access for SMEs.

The Bank said that the Lagos-leg of the event took place on October 21, at the Civic Centre, Victoria Island and featured various interactive sessions including presentations, exhibitions and opportunities to network, noting that attendees also participated in a workshop which covered a variety of topics including: market orientation, sales, financing, book keeping and accounting.

It said the event also provided an opportunity for the Bank to reaffirm its commitment to promoting the growth of SME’s through its SME specific facilities such as: U Biz current accounts, Enterprise hybrid account, Local Purchase Order and Contract Financing, SME Lease Finance among others, adding that the 2014 Market Access for SMEs series continues in Aba on November 10, with the final session scheduled to hold in Kano on November 18.

Also, the Standards Organisation of Nigeria (SON) said recently that Small and Medium Enterprises (SMEs) would play major role in the newly drafted standards for cassava products in the country.

The Director General of SON, Dr Joseph Odumodu, said this in Lagos at the conclusion of the work of a technical committee set up to elaborate and review standards of cassava products.

Odumodu, who was represented by Head of Laboratory in SON, Mr. Louis Njoku, said that cassava had been adopted by the African Union as one of its focal crops.

He said that standardisation of cassava bread was on the agenda of the African Regional Organisation for Standardisation Agenda.

“The benefits of our deliberations today go beyond Nigeria and will also transcend to the entire African continent.

“This multi-faceted summit also placed emphasis on Small and Medium Scale Enterprises (SMEs). The SMEs have over the years been encouraged by successive administrations,” he said.

Odumodu said that SMEs needed standards to play a pivotal role in the value chain of cassava production which would go a long way in advancement of the policy and create wealth.

“SON’s policy in supporting the SMEs is in the provision of standards and codes of practice guiding the implementation of standards and contributes to wealth creation and food security.

Head of CODEX and Food Department in SON, Mrs. Margaret Eshiet, said that the reviewed standards would give priority attention to SMEs in the cassava processing values chain.

“The economy of this country cannot grow except the SMEs are encouraged.

“The essence of the forum is to connect SMEs with the end users of the cassava flour and ensure that the latter meets the standards and quality of the former,” she said.

Prof. Lateef Sanni of Federal University of Agriculture, Abeokuta, said all relevant stakeholders needed to work with research institutes, SON and SMEs to create food security and employment opportunities.

“It is good we have all the major stakeholders present and we are all speaking the same language on the way forward and I see a lot of it for the SMEs.

“I think the flour millers are now more accommodating for the inclusion of high quality cassava products,” he said.

See full story: Daily Independent