Stakeholders seek government’s commitment to MSME development

Stakeholders at the just concluded 2015 Abia MSME Summit, held in Aba, the commercial hub of the state, observed that the MSME sector in Nigeria has huge untapped potentials and urged the government to create an enabling environment for the sector to thrive.

They enumerated some of the challenges faced by sector operators to include limited capacity, poor economies of scale, weak public infrastructure, multiplicity of taxes and levies and poor access to finance.

Kalada  Apiafi, managing director, Wider Perspectives Limited, organisers of the summit, observed that while the MSME sector is traditionally agile and dynamic, it is also particularly vulnerable.

Apiafi stated that access to finance, capacity building or simply finding a sympathetic ear is much more difficult for small businesses and urged government at all levels to create enabling environment where small enterprises can prosper.

He explained that MSMEs represent the backbone of well-functioning market economies. “New firms usually enter the market small, often in the form of micro enterprises. And when they become successful, they grow into SMEs or sometimes even beyond,” he said.

He affirmed that MSMEs in the South-East region are known for their resilience and the ability to produce results with speed and accuracy, which most times are worth the effort, stressing that the benefits for the economy and society at large are great.

Ezekiel Essien, national president, Nigerian Association of Small Scale Industrialists ( NASSI), affirmed  that over 95 percent of Abia State economy in general and Aba in particular is driven by MSME, stressing that Aba is the symbol of black Africa’s strive for indigenous entrepreneurship, hence it is known as the ‘Japan of Africa’.

He noted that MSME is very important part of the Nigerian economy, but regretted that in countries at the same level of development as Nigeria, SMEs contribute a much higher proportion to gross domestic product (GDP).

In his words: “Actually, compared to other emerging markets, Nigeria has historically shown lack of commitment to building a strong SME sector, mainly in the areas of provision of access to finance and financial incentives, basic and technological infrastructure, adequate legal and regulatory framework and a commitment to building domestic expertise and knowledge.

“Considering the importance of MSME in employment generation, wealth creation and poverty alleviation, the sector needs special attention by the government, because the operatives are largely informal and financially very weak and at the same time, they need to develop for the national economy to grow.”

He continued, “As in many developing countries, MSMEs in Nigeria have not achieved their full potential as a result of some critical inhibiting factors that include aversion to joint ownership, financial mismanagement, lack of business capacity, lack of perseverance and staying power.

“Others are poor state of infrastructure, weak access to production inputs and products market, multiplicity of taxes and levies, low access to information, and unfair competition with dumped products substitutes”.

Bature Masari, director-general, small and Medium Enterprises Development Agency of Nigeria (SMEDAN), said that most enterprises have refused to grow, because its owners have little or no knowledge of book keeping.

According to Masari, this manifests  in poor records keeping, low level application of modern technology, limited or no input of research and development (R& D), simple products, mostly below regulatory standards, among others.

Masari, who was  represented at the summit by Robert Owaiye, a senior staff member of the agency, also stated that poor attitude of the entrepreneurs towards networking has also contributed so much to lack of growth of the sector in Nigeria.

He pointed out that only a handful of clusters exist, while the few Business Membership Organisations (BMOs) are weak, with created fragmented and are in unhealthy competition with each other.

According to him, a near total disconnect also exists between MSMEs and large enterprises (LEs), which is a sharp contrast with developed economies (e.g. Japan) where close integration is the norm.