Category: Small Business and Entreprenuership

Rising unemployment is a challenge in Nigeria. According to Labour and Prodcutivity Minister Dr. Chris Ngige, 35 per cent of the population will become jobless by 2020. In the next five years, there are fears that the deployment of technology will make thousands of young people jobless. This was the focal point of a forum organised by Knowledge Exchange Centre in Lagos last weekend, DANIEL ESSIET reports.

HOW best is the country going to ensure that young people are prepared for the world of work in the face of challenges?

This was the focal point at a forum organised in Lagos by  Knowledge Exchange Centre (KEC), a non–profit organisation established to tackle employment issues among fresh university graduates in Nigeria. While technology is leading to more efficient and effective ways of doing things, experts at the forum expressed concerns that growing automation would  lead to job losses. They said while new jobs were being created, some were being phased out.

Firing the first salvo, KEC founder  Charles Nwodo said in some sectors, technology had led to job losses as it  substituted humans with robots.

While  the advent of intelligent technology in work places has helped   companies to increase efficiency and drive competitiveness, which will boost economic growth, Nwodo     however, said a large percentage of jobs was at risk of automation, meaning Nigeria could experience major job losses.

He said increasing investment in intelligent technologies and human-machine collaboration are going to raise unemployment levels as automation is replacing human tasks and jobs, and changing the skills that organisations are looking for.

According to him, the impact of technology on the economy is undeniable. He added that artificial intelligence, robotics and other forms of smart automation are helping to grow the economy.

Consequently, he  said only people with the skills and resources to use technology and  create value can thrive in today’s digital world.

He noted that new high-skill jobs are emerging, while other jobs may be displaced by automation and new technologies.

These momentous changes, according to him, raise huge organisational talent and human resources challenges.

He expressed fear that youths are not making efforts  to improve themselves competitively in the face of the disrupting impact of technology on employment opportunities.

As the types of jobs that constitute a modern economy continue to evolve, he said there is a need to upgrade skills required to do them.

He said in many areas of work, the labour market is now global, adding that multi-national corporations seek the best talent around the world to  work for them in the country.

He advised workers to prepare themselves to compete on a global scale for  jobs, adding  that digital technologies have  removed geographical barriers, adding that global labour surplus makes competition among workers even fiercer.

To meet the challenge, he said it was important to review the education system  for preparing, educating, training and retraining the current and future workforce to keep up with the pace of digital transformation.

Ford Foundation Regional Representative, Innocent Chukwuma said the nation’s young workforce is a key factor for success in today’s economy. Young entrepreneurs, he said, contribute to the economy and make the country prosperous.

Stressing the importance of boosting human capital, Chukwuma said with an estimated inflow of $25 billion remitted by Nigerians in Diaspora last year, Nigerians living outside the country are the country’s biggest export.

Chukwuma noted, however, that unemployment is one of the most pressing concerns among young people, adding that tackling youth unemployment goes beyond skills training, and requires strategic partnerships in research and training between universities, and incentives to spur youth entrepreneurship.

Lagos State Commissioner for Wealth Creation and Employment (Mrs.) Uzamat Akinbile said the state  is concerned about the massive production of graduates with degrees and skills that have limited practical use in the job markets.

Represented by the Ministry’s Permanent Secretary, Mrs. Raji Abidemi, the Commissioner said the massive mismatch between graduate skills and job market needs often leads to under-employment of university graduates.

To avoid creating more unemployed or unemployable graduates, she said the state government is initiating curriculum reform geared towards entrepreneurial skills and jobs.

She said the state government has established linkages with the private sector on skills building to empower graduates to compete for jobs.

The state, she said, has established job registration centres to act as a bridge between industry and graduates looking for employment.

KEC Executive Secretary, Maria Glover said skills shortage is a harrowing problem in the country. According to her, Nigeria faces an enormous unemployment problem while at the same time the economy is being constrained from growing at its full potential due to shortage of appropriate skills.

According to her, the centre runs various job readiness meant to place graduates into full-time jobs, adding that participants receive skills training in collaboration, critical and creative thinking, communication and supported with the personal skills and tool sets required to succeed in the modern workplace.

One of its key programmes is its Graduate Advancement Programme (GAP) Network.

She said the GAP Network is an intervention that addresses critical areas that plague young graduates.

She said the  issues are addressed in a structured way through the GAP Network support system that affords participants to interact with trainers, counsellors, mentorsand  human resource managers, employers of labour and other professionals who provide them  tips and tutorials  to gain employment and grow their careers.

Topservices Limited CEO Tokunbo Omisore has developed several malls in Lagos, Ibadan and other parts of the country to provide employment. In this interview with Daniel Essiet, he says governments’ support and bank funding are necessary for the project’s success.

There is much ignorance about the retail industry. What is its potential in the country?

The retail industry has several benefits to the economy. Apart from the increase in employment, increase in revenue to the government, modernisation of the environment, tourist attraction, and infrastructural development, it will also drive events in other industrial value chains such as agriculture and manufacturing. Most of these retailers will buy a large portion of their products from local farmers and manufacturing companies in Nigeria. We have seen this play out with Shoprite, where most of the outlet’s supplies are sourced locally, especially its food supplies.

Malls are seen as mere pieces of real estate and nothing more. They are not seen as providing significant externalities. Is this view correct?

This is not a correct view. Malls  can be likened to infrastructure like roads, bridges and so on that are capable of providing employment to the youths, starting from the construction stage and its entire lifespan, and contributing more to Gross Domestic Product (GDP), which lies in the government’s ability to provide a special fund to the sector.

The construction of roads and other infrastructure that the government is embarking upon will not automatically translate to reducing unemployment. However, a formal retail industry has the potential to employ millions of Nigeria’s teeming youths and improve incomes.

What benefit is an organised retailer likeShoprite to various SMEs, manufacturers and farmers?

An organised retailer like Shoprite, which has 25 stores spread across the country, will benefit various small and medium enterprises (SMEs) to showcase and sell their products with a single transaction, unlike when their products are limited to their immediate environment, thereby hindering their growth. This large platform as well goes to the manufacturers and the farmers, who now have a reliable organised market to sell farm produce without getting spoilt, and suffering loss.

Unemployment is a significant challenge for the country’s development. Tell us the potential the retail industry has to solve this challenge.

Nigeria’s retail sector remains relatively under-developed. Over 80 per cent of the shopping is still carried out at the traditional shops such as corner shops, kiosks, local markets and from street vendors. According to the International Labour Organisation (ILO), at least 142 million people work in the retail sector in developing countries. Retail employment accounts for an average of 10 to 15 per cent of the job market in any given country. Seeing that the retail industry is very vital to a nation’s economy, the Nigerian market holds significant opportunities for retailers (local and international) and the chance to solve the unemployment challenge in the country. It is proven in the direct and indirect jobs provided by all the malls anchored by Shoprite in Nigeria today.

So, what is hindering the development of malls in Nigeria?

The interest rates on loans for the development of malls are high with a short time for the repayment. Investors and banks are often only willing to invest in government securities, which pay high returns. If I can buy a risk-free 180-day treasury bill that pays me a 20 per cent interest rate, I see little incentive in lending to a risky individual or institution, and if I do, I will charge an exorbitant interest rate.

Similarly, if I could get such a risk-free 20 per cent return in half a year, why should I invest in the Real Estate Investment Trust Scheme (REITS)? In short, high-interest rates on government securities draw investment away from other areas of the economy. This is not helping the retail sector capable of solving the problem of unemployment in the country.

Can you proffer solutions to these hindrances?

The government needs to provide a specific fund/intervention at a particular interest rate through the CBN/commercial bank to developers willing to invest in this sector on a long-term basis.

The sector thrives in other countries and solves their unemployment problem due to funds available at a single digit interest rate for a long-term period because the development is seen as infrastructural development that will last years.

Is investing in a mall a sustainable venture, considering inflation, possible recession and currency devaluation, all of which can affect patronage of the malls?

At present, in Nigeria, investing in mall development is not sustainable to the indigenous developer due to cost of funding, infrastructural decay and stringent regulations/pronouncements among other factors.

However, it can be a sustainable venture if the government intervention funds with at most five per cent interest rate and at least a 10-year tenure are made available to indigenous mall developers;

Commercial banks grant loan facilities at single digit interest rate with at least a 10-year tenure to indigenous developers. The foreign developers in the industry enjoy single digit interest rate on foreign currency as they obtain funds from offshore at an interest rate that is less than five pe cent. This obviously gives them an undue advantage over the indigenous developer.

Business friendly regulations with waivers and prompt approvals, where necessary, are granted; provision/improvement of infrastructure, especially electricity. Energy cost constitutes approximately 75 per cent of the cost of running the mall. An increase in the price of crude in the international market will bring about increase in the diesel cost locally. Hence, causing service charges to go further north. Running generator for 12 hours or more will also mean high generator maintenance cost and consequently replacement due to over use. All these obviously makes the mall unsustainable as tenants will complain of high cost and may be forced to vacate the mall. Improved electricity supply of at least, 10 hours during trading period will reduce drastically the cost of running the mall. There is partnership/joint venture between developer and land owner; and the most recently introduced REITS is encouraged and allowed to work, that is, investors pooling funds to finance mall development.

With the above, the rent payable will be friendly and affordable and indeed sustainable especially, the neighborhood mall concept with emphasis on affordability and sustainability.

Retail holds the key to solving the menace of unemployment, especially youth unemployment.

What are the benefits for pension or long-term private savings to invest in retail?

Pension fund investment in the retail sector would be an “ideal asset class” providing tangible advantages such as long duration- facilitating cash flow matching with long-term liabilities, protection against inflation and statistical diversification.

The retail sector will show growth in all economic cycles, for instance, a consumer spending on durable items like cars or expensive electronics may decline in a recession. Food consumption, for example, does not as home food expenditures often grows in tough times.

“Don’t assume that borrowing lots of money can make your startup fly. There are many things to the business other than investors, and it’s possible to succeed with your startup without breaking the bank.” -Barnaby Lashbrooke, Founder of Time Etc.

“Don’t try to do everything by yourself, but try to connect with people and resources. Having that discipline and perseverance is really important.” -Chieu Cao, Co-founder of Perkbox

“Don’t get distracted. Never tell yourself that you need to be the biggest brand in the whole world. Start by working on what you need at the present moment and then what you need to do tomorrow. So, set yourself manageable targets.” -Jas Bagniewski, Co-Founder of Eve SleepQuote

“Passion, creativity, and resilience are the most crucial skills in business. If you’ve got those, you’re ready to embark on the journey.” – Jo Malone, Founder of Jo Malone

If you are working on a product that’s going to be consumer-facing, then feedback is invaluable. You should be out there being brave and talking to people and asking for feedback as much as possible.” – Emily Brooke, Co-founder of Blaze

“Remain self-funded as long as possible.” – Garrett Camp, Co-founder of Uber, StumbleUpon, and Expa.

“Start as small as you can. When I started SkinnyMe Tea, I had $24 in the bank, and I was entirely self-funded. If you are not embarrassed by the first version of your product; you’ve launched too late.” -Gretta Rose van Riel, Founder of Hey Influencers.

“As a founder, lay all the possible scenarios — from best to worst — in front of you, so you don’t get surprised when something happens.” -Brian Wong, Co-founder of Kiip.

Mothers are nurturing small businesses.The founder/creative director of Mumpreneur, Mofolusade Sonaike, “a community of mums united to support each other”, shared her experience during the inaugural Accelerator forum held in Lagos, DANIEL ESSIET reports.

Mrs  Mofolusade Sonaike is a work-life integration coach and trainer for mothers. Her mission is to show  mum entrepreneurs what really works to build a profitable business. She is the brain behind Mumpreneur, a community help mom-slash-entrepreneurs connect to build better businesses together.

She  started it  because she  wanted  enough time to take care of her children and to help other women building their businesses.

She was one of the speakers at The Next Leader Series with the  theme:‘The Excess Capacity: Leveraging Existing Opportunities to Lead a Successful Life’.

She has a background in Chemical Engineering with an MBA from the Lagos Business School. She  worked in the corporate sector for about four years before she decided to exit and start her own business mainly because she wanted control of her time for family. The turning point came when she had her first son while she was studying for her MBA at Lagos Business School (LBS). After giving birth, she found it difficult to find a balance between her career and time for family. She decided to pursue her dreams of owning her business. She quit her job and started Trezorlandia, a gift packaging company in 2010.

Three years down the line, business came to a halt. She was broke, and had just had her second son. The business was centred around her, she said. If she wasn’t around, nothing could be done.

She became frustrated, and as an outlet, she started a blog tagged An Entrepreneur’s Journey. She shared her reality without filter, and in no time, she began getting emails from people who could relate with her experiences. That was how Mumpreneur was born.

Now as a lifestyle entrepreneur and blogger, she  writes  and speaks about habits, lifestyle design and entrepreneurship. In five years as an entrepreneur, she has made many mistakes and seen a lot of entrepreneurs do them too.

According to her, becoming successful in business is more about mentality, psychology and determination.

She  said the  biggest mistake first-time entrepreneurs tend to make is not asking for help or not asking for the right help from the right people. She urged entrepreneurs  to  seek  the  right help from the right people and nurture relationships.

According to her, networking is the main thing many new entrepreneurs ignore.

She observed that first-time entrepreneurs start their businesses without really understanding the total scope of work that’s going to be required. Before one quits, she urged new entrants to create a  solid financial  foundation to  cope  with the initial challenges the company  may face in the first few years.

According to her, such preparation will account for mistakes and unforeseen events along the way. Her advice is plan for a solid buffer when the cash flow drops, create checks and balances to keep that plan in line.

Mrs Sonaike urged entrepreneurs to focus on taking small steps, being consistent and starting with a tangible goal.

According to her, many entrepreneurs believe in their idea so much that they fail to validate it.

Her advice is that entrepreneurs don’t dismiss negative feedback.

To  help women, she  has created  an e-learning platform – www.kickassmum.com, work in progress where mothers can take practical courses that would help them in life and business right from the comfort of their homes. Some of the courses are available for free, while others will be at a nominal fee. There is currently an accounting automation course up for free on the platform.

The Managing Partner, The Accelerate Company, Babajide Duro-Emanuel, said the forum was critical for founders and established business leaders looking for growth opportunities for their ventures .

According to him, the forum  aims to provide young  business leaders with access to the connections, financing, resources and strategic insight they need to grow their businesses.

He said the forum is designed to accelerate large change initiatives, helping companies work on to advancing innovation, economic development at a local and national scale.

According to him, opportunities in the startup ecosystem are enormous and there is need for organisations to be more innovative to explore them.

He noted that Nigeria will continue to be in the running as a pivotal entrepreneurial scene as such empowerment programmes should focus on supporting its growing army of startups and tech specialists.

Lagos State has held a business clinic to motivate, nourish and grow startups by connecting them with investors and the resources needed to showcase their innovations.The initiative will also increase and enhance their products’ visibility and ultimately attract funding to their businesses, Daniel Essiet reports.

As  a gateway to the nation’s technology and commerce sectors,  Lagos State has become a “launchpad for entrepreneurs.

With increased support for promising companies and enhanced scheme for entrepreneurs, the startup initiative as conceived by  the state is set to launch itself into the global stage as a veritable tool for  businesses. But young aspiring entrepreneurs still have challenges. One of these is basic entrepreneurial skills.

To address this, Lagos State government through the Ministry of Wealth Creation and Employment inaugurated a business clinic targeting young Nigerians who lack experience but with good ideas. The programme brought together diverse and dynamic startups, which were taught entrepreneurship skills and given access to mentors.

The forum ignited a culture of entrepreneurship, where aspiring entrepreneurs worked with mentors to solve real business problems.

Speaking at the  programme, Senior Special Assistant to the Governor on Wealth Creation and Employment, Mrs Temiwunmi Tope-Banjoko, said the business clinic was a result of her participation at an event where the issue of skills gaps, including communication and writing skills and business plans were discussed.

She said the business clinic was designed to expose the techpreneurs to basic business etiquette, access to funding, legal requirements for startups, business plan writing and pitching practice, among other identified issues confronting up-coming technologists.

Mrs Tope-Banjoko said the clinic was part of a broader effort to combat high youth unemployment, adding that the training which was inaugurated at Zone Tech Park, Gbagada, in September, last year, was conceived to strengthen small ventures in the state.

The clinic started with 130 startups, but the numbers were streamlined to 11 at the final ceremony.

She said since September, last year, a lot of the participants have become founders and co-founders of startups, hone their business skills, connect with local entrepreneurs and pitch to potential investors.

According to her, the programme has instilled a strong drive to succeed and created interest in entrepreneurship that the participants didn’t possess previously.

She described the training as a game-changing experience for all participants that will help them move the needle closer to success. Mrs. Tope-Banjoko said entrepreneurs took advantage of the array of seasoned mentors who facilitated different sessions at the clinic.

She said the Lagos ecosystem provides a strong source of talent and new innovative solutions with new startups coming into existence.

She said the entrepreneurs’ drive for success mirrors the state government’s strong commitment to creating jobs, nurture businesses and support innovative start-up companies.

She said the government plans convertion of Yaba Industrial Estate to an Information Technology Communication (ICT) and Innovation Hub where technology-based innovations would be provided with adequate support from the government and other identified stakeholders.

Incorporated into the event  was the Pitch Slam – an open competition in which innovative startups vie to win attention of the panel of judges. The event gave the startups opportunity to present their ideas in a very competitive pitch, to a high calibre judging panel. Startups which featured came from sectors such as E-Commerce, recycling, food delivery and fisheries.

Eleven startups which participated during the pitch competition included Ola Winifred – loystar Retail & loyalty (back office app), Ogunde Wunmi – Ecoprune; Olaoluwa Bamiduro- Lunch on point food; Ogunnaike Philip Tolu – Phliot farms food; Adeyinka Adedokun – Game of knowledge Edutainment’ Salami Habib  Realkon visuals Branding; Taiwo Temidayo – Temi designs ICT; Ejide Oladimeji Odowu-Farm Harvest Direct; Chinedu Amakor -Thrivehood; Abdul Salam Rizwan-  and Bamidele Omotayo Fumders  Network.

During the pitch competition, three winners emerged. These included: Ogunde Wunmi – Ecoprune (Recycling) First Position;  Ogunnaike Philips Tolu – Phliot Farms – Fisheries, Second  position and  Ejide Oladimeji Idowu – Farm Harvest Direct, third Position.

The panel judging the competition consisted of  Principal Consultant, Wise planners consulting, Mr. Sam Omole, Managing Director, Ladybird Advertising Limited, Mrs. Bunmi Oke; Bola Durojaiye – Megacity Technologies, ifedayo Durosinmi-Etti – AGS Tribe, Francis Osifo – 54 GENE, Timilehin Odusina- Versecom Limited and the Head, Entrepreneurship Department, Ministry of Wealth Creation and Employment, Mrs Taiwo Abiose.

A member of the judging panel. Mrs. Bunmi Oke said there are some really exciting startups in the group. CEO/Lead Consultant Ladybird Limited, Mrs Olubunmi Oke said the programme covered  multiple tracks to put all startups and entrepreneurs on the right track, broaden their perspectives, and give insights and exclusive scopes to help fund their businesses.

Mrs Oke, a past president of the Association of Advertising Agencies of Nigeria said firms must stand out to succeed in Nigeria.

She  said the purpose of the training is to  help more entrepreneurs find their footing.

One of the mentors, Omole provided advice to help the startups go to market effectively and scale quickly. Principal consultant, Wiseplanner Consulting, Samuel Omole urged the entrepreneurs to focus on doing what  they can do  extremely well, rather than doing many things poorly.

He also advised that to pick a business model that they can best support and scale up the business.

According to him, what defines companies that thrive is communicating a product’s differentiation and its unique value proposition.

He added that producing quality products and focusing on providing great, personalised service have become its key differentiators.

He said entrepreneurs need to develop market presence, build key relationships and establish partnerships.

2016 Tony Elumelu Entrepreneur, Ifedayo Durosinmi-Etti was  one of the mentors.

While the programme provides support for starting and running a business, she urged young entrepreneurs to be determined and willing to work hard and face challenges.