Positioning Nigerian MSMEs for global competitiveness through standardisation

Wikipedia defines standardisation as the process of implementing and developing technical standards based on the consensus of different parties that include firms, users, interest groups, standards organisations and governments.

Standardisation enables firms to compete favourably in both local and international markets. Standardisation, as it relates to Nigerian micro, small and medium enterprises (MSMEs), was discussed at the September Breakfast Meeting organised by the Nigerian-American Chamber of Commerce (NACC) last Wednesday.

Dikko Umaru Radda, director-general of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), was the guest speaker. Radda explained that standards facilitated business interaction, enabling companies to comply with relevant laws and regulations, speeding up the introduction of innovative products to market , and providing interoperability between new and existing products, services and processes.

Radda said there were clear, tangible benefits for using standards.

“MSMEs can use established standards in the development of new products in order to reduce the resources spent on research and development and improve their ability to innovate,” Radda, who was represented by Monday Evans, director of Enterpriese, Development and Promotion at SMEDAN, said.

“And by proving that they conform to standards, they can win new customers and retain existing ones by demonstrating the quality of products,” he said.

He pointed out that regulators and policy makers could make standards work for MSMEs by building their capacity on standards, strengthening their technical infrastructure and improving governance at home to facilitate border crossing.

Oluyemisi Ogundipe, vice president, South West zone of the African Women’s Entrepreneurship Programme (AWEP), said MSMEs must understand that quality was indispensable.

“Standards make you more efficient. Few weeks ago, there were 339 standards approved. How will the MSMEs make sense of these? Standards are not the first thing many businesses think, but we are saying that they should be.”

On her part, Ola Brown, founder and chief executive of Flying Doctors Nigeria, said Nigeria must grow the MSME sector to lift the majority of people out of the poverty line.

Brown pointed out that there were ‘evil forces’ militating against MSMEs in the country.

“One is the issue of multiple taxation. If you look at the taxes by the Federal Inland Revenue Service, Lagos Inland Revenue Service and the rest, you will discover that by the time you pay all of them, you have nothing left,” Brown said.

She said the monetary policy rate (MPR) was so high, pushing a number of entrepreneurs into cash crunch. The MPR is often set by the Central Bank of Nigeria and is currently 14 percent. It is the benchmark interest rate, meaning that it determines that trajectory of interest rates in an economy.

Brown stressed the need to cut this to enable entrepreneurs have access to cheap funds.

“What we did in relation to taxes was to move to free trade zones. It enabled us to cut down on these taxes,” she disclosed, advising other small businesses to do so.

Brown stressed the need for entrepreneurs to better engage and manage people.

Solomon Aderoju, chairman, Nigerian Association of Small and Medium Scale Enterprises (NASME), Lagos State chapter, stressed the need for standards to be seamless as well as cost-and time-effective.

Macaulay Atasie, managing director/chief executive officer of Nextzon Business Services Limited, said it was important for MSMEs to cluster together and explore export opportunities.

“The rest of the world has a major demand for Nigerian standardised products,” he said.

Oluwatoyin Akomolafe, president, Nigerian-American Chamber of Commerce, said MSMEs in the country struggled with a number of problems, prominent of which was non-availability of funds.

“Most SMEs operate in a manner that inhibits them from accessing funds from most financial institutions that see them as high risk. Some of the limiting factors include: poor planning and management, lack of a proper structure, and low capacity building utilisation, among others,” Akomolafe said.

“The advantages of SMEs to any country are definitely obvious. These include: contribution to the economy in terms of increase in output of goods and services; generation of jobs, particularly in the rapidly growing service sector; offering a medium for shrinking disparities in income; and developing a collection of skilled and semi-skilled workforce as a foundation for imminent industrial expansion.”

ODINAKA ANUDU