Need for industrial parks, SME development

Apart from problem of infrastructure and access to loan, the small and medium enterprises (SMEs) can create jobs if the Federal Government revisits the need for industrial parks and incubation centres across the country, experts have agreed.

This was said by Tunde Popoola, managing director/CEO, CRC Credit Bureau, in an exclusive interview in Lagos, in agreement with a UN Economic and Social Council’s commissioned research on Technology and Incubation Centres. The research study was co-ordinated by Farouk Kamoun, with Jamil Chaabouni, a Northern Africa consultant, and Dick Kamugasha, a Southern Africa consultant.

“During the last decades, African countries have embarked on projects for the establishment of science and technology parks, business incubators and centres of excellence with the aim of spurring and sustaining economic growth, meeting the job needs of new graduates and of integration into the knowledge economy. These centres and parks are designed to bring together various actors in knowledge management, research and development and companies,” according to the experts.

Wherever they are, new firms come up, their tax bases are expanded and employment opportunities to citizens created. Land and other taxes are usually waived off or reduced along a number of years, in order to attract new companies, called tenants.

According to Popoola, SMEs need to have good infrastructure, so that they can be able to have their product manufactured with some level of efficiency and with some level of pricing reasonably. But if there is no power, if there are issues relating to regulations, if there are issues relating to work space, then all these become challenges for the SMEs.

“I think one way government can assist is to begin to have industrial parks and incubation centres. Through industrial parks and incubation centres, SMEs will not need to go individually to be looking for equipment they need. Those equipment are always there. You only take your raw materials to those centres, manufacture and you pay for space that is already guaranteed there. They can do this for some time until they have some money to begin to buy their own assets.

“Nigeria used to have some centres, I think about six of them. Federal Government needs to resuscitate all of that to be able to have places were, especially SMEs that are into manufacturing, furniture making, detergent making, soap making, have incubation centres where they can take their raw materials to process without having to sink so much millions into buying equipment.

This will go a long way to assist them to produce and generate employment for a lot of people.

“The second one is about capacity. Most people run their their businesses as a one-man business and you can’t grow like that. But if you have capacity, have a structure in place, where you can employ specialists. If you are a manufacturer, may be you need an engineer, you need an accountant, you need someone for branding. All these things are possible, but someone needs to let SMEs know that all these are very important and the only way to do that is to have serious business development centres,” he said.

Skill dearth

On the skill dearth, the nation still need more entrepreneur development centres where people can learn how to start and run businesses. We need to know how we can get more businesses that are already in place, how we can get them to be able to move to the next stage. Some people have been running their one-man businesses for years. How can we get them to be able to take that business to the next level. It’s all about being able to deliver their capacity; sometimes its about organising trade shows and trade fairs for them; sometimes its about grouping them into business clubs so that they can share ideas. Sometimes, its about taking them to other places to see what other people are doing.

If we have more chambers of commerce for instance, they can organise trade missions where they can think collectively at lower rates by having relationship with other countries. All our embassies have commercial desks all over the world. They can help them to relate with other businesses wherever they are. In India and Turkey, anywhere, all of them are looking for market outlets and Nigeria is also looking for how it will be able to do things better. Taiwan, Malaysia, all of them started like this. Twenty years ago, Taiwanese products were perceived to be inferior but they have perfected on that because they have the experience over time. The nation have to start somewhere, and it’s by reaching out to the world. Nigeria have to do that for its businessmen and SMEs.