‘Government programmes for MSMEs should be localised’

Sanusi Maijama’a Ajiya is the national vice president in charge of the micro, small and medium enterprises (MSMEs) at the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA). Ajiya, who plays in the mining, construction and export sectors, tells BusinessDay’s ODINAKA ANUDU, in this interview, that any programme meant to spike this MSMEs must be localised, adding that regulators must ensure the survival of this category of business.

Considering the current state of the economy, how will you rate the performance of the MSMEs?

Well, they have performed poorly. We need to understand that MSMEs are the engine of economic growth. The MSME policy here in Nigeria requires some review. The programmes to deliver Nigerian MSMEs should be given a localised approach. When I say ‘localised’, I mean the operators should be allowed to say what they want and be aligned with the policy on ground. Generally, the government direction is to create jobs and wealth for the nation. There are many interventions, particularly in terms of the financial window created by the Central Bank of Nigeria (CBN),  but when you put them on the scale, you will find out that there is nothing much to talk about. I think there are some re-alignments in the interventions, guidelines and conditions. Unfortunately, what we see is that the operators are mostly operating informally. They need some kind of education, sensitisation, mentoring, monitoring and motivations to come into the formal sector. The issue is highly technical, and we need to sit down and show the government the direction it should go.

So which direction would you want the government to follow to spike MSMEs?

Going back to the GDP in Nigeria, the major contributor is the informal sector. The contribution is up to 50, 60, 70, 80 percent. If you are talking about the contribution of a particular sector which is higher than all other sectors and you are trying to get an injection into that to do more, but the injection does not go, then you should ask why.

One, if the majority of businesses in the private sector operate in the informal sector and the majority of MSMEs operate here, then your approach should not be formal. There should be a slight bending down. Slightly bending down does not make you a dwarf. All you are looking at is making this sector which is contributing greatly to your GDP to get more injections so that there can be formal recording and plan for the future.

Bringing informal businesses to the level of formality may not be easy and that is the only area the government does not understand. For MSMEs, it is not always money that matters. It requires certain skills, managerial finesse, and technical know-how to make the business grow in a gradual way.  You cannot formalise the informal sector overnight. To do it, you have to understand the language. So when you say you want to give money to an MSME operator, but require this and that, then you want to get him out of the business.

How will you assess the structure of loans in banks? Two, have you been able to access the CBN’s N220 MSME Fund?

That is the issue. You cannot put your hand into it. When they tell you that this number of MSMEs have accessed the CBN loan, let them tell you the sectoral representations of the MSMEs. If you see the sectoral participation, you may get discouraged.  With all your interventions, you cannot quantify the level of success all along. All the data are not realistic. Tell me how many MSMEs are there in all the locations. There are no MSME in Asokoro (Abuja), anyway, but all MSMEs are in local governments. So what is the role of local, state and federal governments in growing MSMEs? The role of the federal government is to come with policies and programmes. Implementation should be a collaborative programme. The Organised Private Sector needs the MSMEs because of their primary goods. Today you have 41 items banned by the CBN. All these should be semi raw materials for the major manufacturers. These are areas government needs to look at in sourcing raw materials.

Keep banks aside. Banks are the greatest beneficiaries of Nigerian economy, but they are the most complicated sector in putting the economy in proper shape. They are not helping MSMEs at all.

Think of mining, which is just coming to the forefront of the government. Some incentives are also on the way. But the major problem of small scale miners is access to funds. It is capital intensive, and  need a lot of incentives, concessions and support for you to go into mining. It is not only the federal government, but also the state, local governments and even the community around you.  The banking sector is exploiting the economy and I feel govt should look at the sector to ensure they do what they are supposed to do to boost the economy, so that we can have more investors and have more capital.

MSMEs need long-term facilities, not short term, which are really what banks provide.

How will you assess the role of regulators in relation to MSMEs?

Regulatory agencies have nothing to regulate if the operators are not active. So it is in their best interest to ensure the existence of MSMEs. But unfortunately, maybe things will change by this government, otherwise, you are taxed all the places. You move from here to here and you are being asked to pay something.

ODINAKA ANUDU