Nigeria needs energised SMEs to pull economy out of recession
Nigeria needs viable and energised micro, small and medium businesses (MSMEs) to pull it out of the current economic slowdown, according to experts. However, the experts say only small businesses operated by entrepreneurs with solid character, capacity and trust can truly support Nigeria’s quest for economic rebound.
Waheed Olagunju, acting managing director/CEO of Bank of Industry (BoI), said despite Nigeria’s natural and human advantages, the country had underperformed owing to the weakness of its MSMEs. Olagunju said the BoI had long recognised this shortcoming and mapped out N293 billion between 2016 and 2019 to ensure that viable MSMEs had access to single-digit funds for growth.
According to Olagunju, who was the guest speaker at a public lecture organised by the Chartered Institute of Personnel Management of Nigeria (CIPMN) in Lagos, MSMEs would get N26.2 billion before the end of 2016, N45.9 billion in 2017, N80.3 billion in 2018 and N140.6 billion in 2019.
However, he pointed out that small businesses who wished to access credit from the development bank should understand the five canons of credit.
“Any bank that wants to lend you money must consider your character. It must also consider the borrower’s circumstance? What is your capacity to repay loans and receipts? Banks also consider the capital you have as well as the collateral,” said Olagunju at the event tagged, ‘SMEs as a Catalyst for Sustained Economic Growth in Nigeria’.
He listed some of the opportunities in the country that SMEs need to tap into to include: housing deficit of 17 million, infrastructure of $400 million, and electric power.
“SMEs can plug into the supply chains. With 180 million population, there is an opportunity in the power sector. You can go into the solar power,” he said, adding that entrepreneurs can plug into cassava flour input supply to millers, palm oil supply to soap makers and salt supply to food processors.
“Our customers who produce cassava cannot meet the demands of flour millers now because millers are now buying more of local cassava and cutting down on imported wheat,” he said.
According to him, young Nigerians should move in to acquire skills needed in technical areas as many Nigerians sought skills from neighbouring countries. However, he warned that they must have good attitude to work like their African counterparts.
He said SMEs with viable bankable proposals would have people handy to invest in them, stressing the need to have competent consultants and procurement policies. “They need industrial parks, which will enable them to share knowledge and skills. When they are localised, it makes it easy for financial institutions to fund them,” he further said.
Abiodun Adedipe, chief consultant at Biodun Adedipe and Associates Limited, prescribed a four-way test for SMEs. “Every day you wake up, you must think marketing. You must have on-going transactions. You must be finishing some jobs that you are invoicing. The last test, which is the ultimate test, is to ensure that there is payment for the invoices already used,” Adedipe said.
“In reality, if you have a properly conceptualised case, you won’t have a problem getting money. It is not the money that is the problem,” he further said, adding that only SMEs would drive the economy and not the big businesses.
Kyari Bukar, chairman, Nigerian Economic Summit Group, said the growth of MSMEs in the Nigeria was dependent upon events in the international market.
Bukar, who was represented by Segun Omisakin, said there was a need for Nigerian SMEs to examine their business models, stressing the need for operators of these businesses to learn the political and economic events around them.
ODINAKA ANUDU