THE quest for development is one of the best ventures of any government that seeks the welfare, protection, and survival of the political system. Nigeria, one of the fastest growing economies in the world, had well observed that the continuous growth of the economy and development of the people is hinged on the viability of the informal sector and productivity of the small-scale enterprises. At various times Government had extended arms of support in form of grants, incentives, loans and quick business registration schemes to the Small-Scale Enterprises (SMEs). Despite these efforts, it is quite depressing that we still have “a staggering statistic that show that 70 per cent of small businesses die in the first three years and there are many different reasons why they die.”
THE HOPE observes that the death of these future economic rescue agents are traceable to high cost of doing business, which is precipitated by epileptic power supply, inflation rates, and lack of skilled manpower, Other issues include the multiple taxation system, infrastructural deficits, lack of infrastructures, as well as the difficulty experienced by many, lack of managerial capacity, obtaining finance, finding customers, infrastructure deficits, and lack of managerial capacity. The results of these hydra headed challenges have stifled many of the registered SMEs, thereby rending them ‘dead on arrival’. The Hope concerned at the imminent collapse of this sector is glad to note that SMEDAN has recruited and trained 116 Business Development Service Providers (BDSPs) who being the eyes and ears of SMEDAN in all of Nigeria are expected to go into the market, and help small businesses to thrive.
‘THRIVING’ as we observe, however, transcends the mere existence of the SMEs to include their productivity, enlargement and active contributions to an expanded GDP, improved per capita income through the provision of employment, exportable goods and attraction of foreign direct investments. To achieve all these, we advise that the trainers should not exploit small enterprises, but provide adequate training, networks and assistances that would ensure the fulfillment of the objectives of the programme. Furthermore, while SMEDAN’s efforts are commendable and pacesetting, it is important to observe that 116 BDSPs are too small to be significant in a country that has 774 Local Governments and boasts of about 39 million micro and small businesses in Nigeria and are poised to (like other MSMEs in the world), provide “opportunities to drive employment generation and wealth creation as well as income re-distribution within societies.”
ALSO given that as at 2017 there were 41,543,028 MSMEs, employing 59.7million people (76.5% of labour force) and contributed 49.78% to nominal GDP and 7.64% to exports, and by 2022 had employed “87.9 per cent of the labour force,” and contributed 43.31% of the nation’s GDP, government should go beyond training, as there is the need to add incentives to the MSMEs in order to boost production, both qualitatively and quantitatively so as to compete favourably with both regional and continental entrepreneurs at both the local and international markets. Beyond these, there is a need for a legal framework that seeks to protect the local SMEs against the exploitative tendencies of security personnel, foreign goods, and unfavourable market dynamics. A focused, heavy, persistent, and dedicated investment in MSMEs in Nigeria would in no small way ensure that the nation is not too dependent on oil revenues to survive, and hence also curtail the penchant for borrowing from the nooks and crannies of the world.
IN this vein and given that access to capital for commerce and industrialization is the bane of MSMEs, we strongly recommend that Nigeria could also take a cue from the India Model, where the government revamped the credit guarantee scheme of MSMEs through the infusion of Rs9000 crore, equivalent of US$1.09billion, and also enabled collateral-free guaranteed credits of about US$24.41billion for MSMEs. The Nigerian government should give more incentives to entrepreneurs to increase their productivity, thereby enlarging their scope, productivity, qualitative goods, and thus attract more foreign exchange into the country.
WHILE this ‘largesse’ to these enterprises may seem huge and sacrificial in the short run, the dividends would in the long run take the nation from its current dollarized economic strangulation to ‘the green pastures’ where all Nigerians could breathe.