The Nation Newspaper

Tag: micro small and medium enterprises (MSMEs)

  • Repositioning MSMEs for economic growth

    In recent days, there have been fast paced and powerful conversations around rejuvenating Nigeria’s comatose MSME sector ostensibly through the injection of funds to the sector but equally important, making these funds easily accessible to operators of MSMEs in the country. Assistant Editor, Nduka Chiejina reports on what is afoot for Nigerian MSMEs

    With unemployment at 23%, insecurity growing by the day from all corners of the country, the only way to check these challenges is to engage the masses in productive activities that takes away the stigma of joblessness and engenders an atmosphere of positive self worth in a large number of Nigerians.

    The key is to encourage the growth of micro small and medium enterprises (MSMEs) and having recognised this, the government and relevant agencies are now scrambling to support the growth of this very vital sector to launch the economy to strength, get angry youths off the streets and put food on family tables.

    Government’s move

    The Office of the Vice President has initiated an MSME Clinics to nurture MSMEs where entrepreneurs with ideas meet potential support agencies.

    The MSME Clinics were introduced by the federal government to bring together key frontline government agencies and stakeholders to interact together with a view to removing impending bottlenecks. The Clinic provides an enabling environment for all critical stakeholders to interact with each other to enable federal government agencies to proffer on the spot solutions where possible, to problems affecting MSMEs.

    The MSME Clinics is a collaboration with the Federal Ministry of Industry, Trade and Investment, State Governments, and key federal agencies such as; BOA, BOI, CAC, DBN, FIRS, ITF, NAFDAC, NITDA, NEXIM, NEPC, RMRDC, SMEDAN, SON.

    The Clinics provide critical support to MSMEs in the areas of: Access to Finance; Business Registrations; Product Registration and Certification; Information Dissemination; Skills Acquisition/Capacity Building; Access to Market and Tax Compliance.

    The need to encourage the growth of MSMEs has become more pressing in view of the fact that limited white collar government job offers which sparingly appears in Ministries, Department and Agencies are scooped up by the powerful.

    The private sector naturally is now considered the best alternative for job creation to help reduce unemployment, keep the youths busy and positively engaged so they can take their minds of crime, banditry and terrorism.

    Over the years, MSMEs barely survived beyond their third years of establishment because they are constrained by the crippling factors such as absence of stable power supply, frightening levels of insecurity and near unrestricted importation of foreign items into the country.

    To motivate Nigerians to pursue entrepreneurial ventures, and give fillip to the MSME Clinic, the federal government has initiated an annual award for MSMEs that are innovative and can contribute to industrial growth, employment generation and economic progress.

    Coordinator of the Screening Committee for the MSMEs awards, Mr Monday Ewans, said the implementation of the initiative had assisted the government to create the environment for businesses to thrive.

    Ewan, who is the Director, Enterprise Development and Promotion, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), said the government in recognition of the roles played by MSMEs has decided to come up with an award to support the sector.

    The target of the award he said is “to celebrate excellence in various sectors of the economy such as manufacturing, agriculture, furniture and woodwork, technology innovation and fashion, among others.”

    He said, “The aim of the MSME clinic is to create an enabling environment for small businesses to prosper towards creating jobs, creating wealth and eradicating poverty in this country. The MSME clinic has gone to 23 states and a lot of impacts have been made and one of the fallout of the clinic is the award.”

    He said going forward the government would intensify its intervention in small businesses through access to finance.

    What the bank says

    Another player determined to change the fortunes of MSMEs in Nigeria for the better is the Development Bank of Nigeria (DBN). It organised its first lecture series in Abuja with emphasis on MSME development.

    The former African Development Bank (AfDB) President Dr Donald Kaberuka while delivering the keynote address described MSMEs as the drivers of inclusive growth everywhere; this is where jobs will be created.”

    He lamented that “in many African countries it is the large multinational, influential companies who are given all the facilitation, which often they do not need rather than to the MSMEs who are the job creators.”

    Kaberuka noted however that “in many ways Nigeria is showing a lot of dynamism in this area; from agribusiness, retail and consumer, hospitality, entertainment, small startups in the digital space.”

    One of the challenges MSMEs face in Nigeria, he said, is that many startups die within three-five years because finance – the so-called missing middle, is a big issue.

    According to Kaberuka, “that is only one of the many challenges, sometimes not even the most important one. Think of a small car repair vehicle in Kaduna, or a small kiosk owner in Soweto. If electricity is unreliable his small margins are gone even if they had access to finance.”

    Red tapism, multiple level taxation or inability to access government procurement or not being paid on time, inexperienced management and capacity, limited access to accounting services are the major challenges crippling MSMEs.

    Support to SMEs therefore he said “must begin with a good understanding of the country in which they operate. Solutions will have to be country specific. The toolbox in the world of finance get more specialised to address the finance “missing middle.”

    Managing Director of DBN, Tony Okpanachi at the lecture said the DBN is conversant with its mandate, and is on course to fulfilling it. He noted that statistics across the continent, has shown MSMEs to be “the bedrock of economic growth and development because of the critical role they play in accelerating economic transformation and industrialisation.”

    In Nigeria, he said there are about 41.5million MSMEs and collectively they contribute to well over 50% of Nigeria’s GDP. “However, access to finance is still a concern for this critical segment of the economy. The latest figure indicates that at the Micro level, about 90.5% do not have access to credit whilst the figure for SMEs is put at 67.9%. Other pressing areas which rank high for SMEs are assistance in power and water supply – 83.5% as well as tax rate reduction – 73.1%”

    To address this challenge of access to finance by MSMEs, Chairman of the DBN, Dr. Shehu Yahaya said the process of recapitalising the bank is in top gear to be completed in two years time and hinted that government’s stake in the bank will be diluted to give the bank greater private sector philosophy while retaining the social contract mandate of the government.

    According to Dr. Yahaya, “the plan is to attract additional equity from impact investors, as well as multi-lateral development institutions. That is the way we intend to go to expand, although the government will remain a shareholder, but the relative ownership of the government will be substantially diluted in favour of private and multi-lateral development institutions.”

    The private sector intervention

    Support for MSMEs is also coming from the private sector through the Tony Elumelu Foundation (TEF) which has taken to mentoring young Africans in entrepreneurship. Between 2015 to date, TEF has committed $100 million to identify, train, mentor and fund 10,000 African entrepreneurs.

    To scale up its intervention, the Foundation recently organised the fifth editions of TEF in Abuja. Speaking at the event, Vice-President, Prof. Yemi Osinbajo said time had come for proper funding of entrepreneurs noting that the need to increase the funding support for entrepreneurs was borne out of the conviction that it would help create jobs, reduce poverty and boost economic development.

    The Vice-President described Elumelu’s Entrepreneurship Programme as a huge success, because the programme is coming at a time “when the continent is being defined by unsavoury and unwholesome stories which do not often accurately represent the reality of life and opportunity but the beneficiaries of the initiative are changing the narrative.”

    Once again, funding was identified as a major problem of most medium, small micro enterprises (MSMEs) have to grapple with. To address this, some experts led by the current AfDB President Dr. Akinwunmi Adesina and Vice President Yomi Osinbajo canvassed for the creation of a Youth Entrepreneurship Investment Bank (YEIB). It will be a special dedicated bank solely set up for the funding of enterprises managed by youths

    Prof. Osinbajo advocated for the setting up of a special bank for MSMEs arguing that “we must fund young entrepreneurs and provide opportunities for capacity building. Our school curriculums must emphasise not just STEM but critical thinking and entrepreneurship and the promise of entrepreneurship banks must be kept.”

    On his part, Chairman of TEF, Tony Elumelu his Foundation is committed to helping the youth, by giving them seed capital to nurture their ideas. According to him, “I’m happy of this convergence. The 21 century development of Africa lies on our hands. We promised our young ones development. The sky is now yours to actualise your dream and opportunities. In TEF, we give you little seed capital to mature your ideas. I’m happy everyone is on board.”

  • NAFDAC reduces MSMEs registration fee By 50%

    NAFDAC reduces MSMEs registration fee By 50%

    Prospective entrepreneurs in Micro, Small and Medium Enterprises ( MSMEs ), in the country now have cause to smile as the National Agency for Food, Drugs Administration and Control ( NAFDAC ) has reduced the cost of registration of products for such type of companies by 50 per cent for companies with five or less than five employees, in line with Federal Government’s policy on Ease of Doing Business ( EDB ) in Nigeria.

    Speaking during NAFDAC Stakeholders Consultative Forum on Ease of Doing Business in Nigeria, held at Mambayya House, Kano yesterday, the Acting Director-General of NAFDAC.

    Mr. Ademola Mogbojuri, who was represented by NAFDAC Director, Special Duties, Dr. Abubakar Jimoh, explained that the rationale behind the reduction was to encourage MSMES to solidly stand on their feet and continue to contribute their quota to the economic development of the country.

    He also stated that NAFDAC has also concluded plans to reduce registration time by 90 days, adding that, “NAFDAC is to implement 50 per cent reduction in cost of registration of products for companies with five or less than five employees.”

    According to him, NAFDAC has also worked out modalities for the establishment of Small Business Support Desk (SBSD) to guide small business through registration process, which will also serve as enquiry point for small business on regulatory issues.

    He added that the agency has also put in place electronic submission of documents so as to reduce the amount of time and delay process taken for hard copies to get to the Directorates at the Lagos headquarters.

    “To encourage MSMES, we have activated NAFDAC Product Registration Outreach (NaPRO) to provide interactive engagement and advice on documentation, labeling and other requirements so as to facilitate the registration process. We must also ensure increase in the number of time samples are submitted to the laboratory per month,” he stated.

    According to him, “no fees will be charged for inspection, laboratory analysis and export licence when MSMES are exporting their products,” adding that NAFDAC will also discourage the use of consultants by companies to register products.

  • NAFDAC moves to ease registration of products for MSMEs

    NAFDAC moves to ease registration of products for MSMEs

    The National Agency for Food and Drugs Administration and Control ( NAFDAC ) has concluded arrangements to ease registration of products for Micro, Small and Medium Enterprises ( MSMEs ) in the country.

    Mr Ademola Mogbojuri, its Acting Director-General made this known in Minna on Monday during a stakeholders consultative forum for Small and Medium Scale Enterprises (SMSEs).

    “NAFDAC is to streamline the registration process to make it easier for MSMEs to register their products with the agency without compromising on quality and safety.

    “I wish to reiterate that NAFDAC is fully committed to the development of MSMEs in Nigeria because a number of efforts have been made and are being sustained,’’ he said.

    Mogbojuri, who was represented by Dr Abubakar Jimoh, NAFDAC Director Special Duties, said that there was need to comply with the Federal Government’s directive to ease establishment of small businesses in the country.

    “It was perceived that a number of the agency’s regulatory processes are stalling the ease of doing business hence the need for more efforts toward addressing the issue.

    “Therefore, I have approved the composition of an in-house committee to harmonise all these processes and drive the implementation of the presidential directive within a specified timeline,’’ he said.

    He called on affected stakeholders to accord the committee the necessary support to enable the agency restructure its operations toward easing the establishment and operation of MSMEs in the country.

    The Acting NAFDAC Boss said that on May 21 Vice President Yemi Osinbajo issued the Presidential Executive Directive on ease of doing business in Nigeria.

    He explained that the directive was premised on transparency, in ministries, Departments and Agency of Government, default approvals, one government directive, entry experience of visitors and travellers and ports operations.

    Earlier, Mr Anikoh Ibrahim, Niger Coordinator of NAFDAC, said that under the Federal Government’s directive 50 per cent discount from the original tariff for registration of products would be applied to companies with staff strength of five and below.

    Ibrahim said that under the arrangement the entire process of attaining NAFDAC registration license would not exceed 90 days.

    He said that the measure would ensure that registration process for bakery license would not exceed 30 days, adding that before now these processes of registration would take a year or more.

    The State Coordinator of the agency said that regulated products under the category include food, drugs, cosmetics, herbal medicines and packed water.

    Also, Malam Abdulwaheed Abdulkadir, chairman Association of Table Water Producers in the state appealed to the agency to ensure that the 30 day new policy for renewal of licenses for existing businesses was extended to newly established businesses.

    Abdulkadir said that such gesture would encourage establishment of new MSMEs across the country and in turn boost the economy.

    NAN

  • FG to improve MSMEs’ access to business support

    FG to improve MSMEs’ access to business support

     

    The Federal Government says it is committed to addressing the challenges faced by Micro, Small, and Medium Enterprises (MSMEs) in the country.

    It said it would do that through interaction with entrepreneurs with relevant business regulations in form of clinic sessions.

    The Special Adviser to the President on Economic Matters, Dr Adeyemi Dipeolu, said this in Abuja on Wednesday at the two-day Nationwide MSMEs Clinic for the FCT, with theme “Nationwide MSME Clinics for Viable Enterprises’’.

    Dipeolu said the clinic was to address the challenges of MSMEs doing businesses in Nigeria, adding that similar clinics had been held in seven states.

    He advised the participants to take the advantage of the clinic to discuss with government agencies in charge of business issues.

    Dipeolu said that the clinic was to understand the challenges faced by MSMEs and also to create awareness on the standards of producing goods both for local consumption and exportation.

    According to him, the MSMEs clinics is an initiative of the Presidency, aimed at addressing problems of enterprises across Nigeria.

    The Managing Director, Abuja Enterprise Agency, Muhammed Arabi, said the clinic was not only bold but timely in view of the myriads of bottlenecks that MSMEs were encountering while starting up or growing.

    Arabi said until the government started seeing itself as agent for the growth of the MSME sector, it could not realise the expected potentialities of providing the needed result of jobs creation and  poverty reduction.

    He said that the universal belief was that small and medium enterprise sector was a major driver of the economy.

    Arabi said the convergence of all relevant ministries, departments and agencies to give solutions to the problem, respond to inquiries and provide the needed information would definitely lead to the success of the initiative.

    He said the country was lagging behind in spite of the MSME sector holding 96 per cent of the business sector in Nigeria compared to 53 per cent in the U.S. and 65 per cent in Europe.

    Arabi added that with the employment capacity of about 33 million people, it only contributed 48 per cent of the Gross Domestic Product of Nigeria, compared to nations on the same status in Asia.

    “We therefore owe this nation a duty and the MSME sector in particular, as stakeholders, to move from this poor status to catch up with the fast moving would.’’

    At the interactive session, participants complained of lack of finance and that most banks asked for impossible collateral.

    He also complained of lack of patronage from Nigerians who preferred to buy imported products.

    The Deputy Director, Development Finance Department, Central Bank of Nigeria (CBN), Mr Osita Nwanisobi, advised entrepreneurs to always pay back loans collected from banks.

    Nwanisobi said most banks faced the challenges of people not returning the loans they borrowed to give other customers.

    He said that CBN always sanctioned banks that failed to do the right things concerning loans for MSMEs.

    “We monitor the commercial banks because there are guidelines for the interventions,’’ he said.

    According to him, CBN is ready to provide avenues for upcoming entrepreneurs to easily access funds to either set up or expand their various enterprises.

    “CBN is focused on enhancing capacity utilisation, increasing output of goods and services, boosting job creation and increasing foreign exchange earnings,” he said.

     

  • Focus less on finance, SMEDAN tells MSMEs

    Lagos State District Coordinator of Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Yinka Fisher has urged entrepreneurs in micro, small and medium enterprises (MSMEs) to develop workable innovative ideas and expand business network rather than lament on the problem of accessing finances.

    Fisher who spoke on the topic, “Unlocking the Youths Entrepreneurship Potentials for National Economic Development” at the Trek Entrepreneurship Lecture said, “ the problem of finance is not an immediate problem for entrepreneurs as finance will be easily accessed if business is properly placed. One thing we keep telling people is that you cannot run a business alone and that is why you must network with a synergy of different people so that at the end of the day whatever is your own is your own weakness would be the strength of your partners and the weak point of your partners can be your own strength.

    He added that many small and medium enterprises are unable to access finances primarily due to lack of information as well as their inability to meet specified requirements which include a realistic business plans and provision of loans collateral.

    The SMEDAN District Coordinator said, “When we talk about finance, finance availability is in abundance but what is your ability to know how to tap into it. One thing we keep saying is that for you to be able to tap into finance, you must be able to provide a business plan. Let us see your business plan. Of course, it is not enough for someone to come and say that I am looking for finance without knowing what kind of business that person is into and what business direction that person is looking at. So for finance to be properly access, first thing first is to understand what does it take to establish an enterprise and when your business is properly established, you would know how to source for your finance. And providing information on funding are some of the things MSMEs can get from SMEDAN as an institution of government.

    Speaking in the same vein, CEO, Papas Entertainment has implored Nigerian youths to look inward and discover unique traits which could be maximized for self-employment and job creation rather than lament on lack of finances.

    He said, “I would say that though we all need finance but much more I implore the youths to use their environment and their talent. I want to advocate that the youths look inward and annex their potentials; these potentials are inherent in all of us. Every one of us needs to discover our purpose. Those are the things that would make you unique and successful as an entrepreneur. Finance should not be a total hindrance to whoever is ambitious.

    Meanwhile, President of Computer and Allied Product Dealers Association of Nigeria (CAPDAN), Ahmed Ojikutu, who spoke on the sideline at the lecture has called for more investment into the information communication technology (ICT) sector of the economy.

    He said, “ICT is going to be the driving force of every industry in the nearest future, be it health, education or transportation. You would discover that ICT would consequently become the orbit that works around every of these industry. So at this point, you would see that it is only reasonable that ICT be heavily invested into. And with these investments, Nigeria would become an ICT producing country and not a consuming country alone.