From BLESSING OKEZIE, Lagos
“Micro, small and medium sized enterprises are the major drivers of economies globally, and as such should command a significant amount of attention and resources from governments globally”.
This view was expressed by the Chairman, Nigerian Association of Micro, Small and Medium Enterprises, Lagos State Chapter, Dr Adams Adebayo.
He stated this , at the 2020 media workshop organised by Commerce And Industry Correspondents Association of Nigeria (CICAN) .
The workshop has the theme “Effects of COVID-19 on the Real Sector/ SMEs Financing,” and held in Lagos recently.
Speaking at the event, Adebayo,, said developed countries across the world have realised the importance of MSMEs within the economy and have actively taken steps to ameliorate the impact of shocks such as a global pandemic on these essential growth drivers.
According to him, historically, financing has been identified as a major challenge for MSMEs especially in developing countries, even more so in times of economic uncertainty.
He said it is no secret that MSMEs find it a lot harder to keep their businesses afloat compared to larger sized companies, adding that this being the case, the USA is taking steps to secure an additional $250bn to complement $350bn already budgeted as relief funds for MSMEs.
He said Nigeria, however, is currently seeking approximately $7bn from the International Monetary Fund, World Bank and African Development Bank to support the economy according to Zainab Ahmed, Finance Minister.
“In the event of a successful fund raise from the above listed multilateral agencies, it is evident that $7bn would be insufficient to cater adequately to the needs of Nigeria and its MSMEs thereby creating the need for alternative funding solutions for MSMEs. One of such is the NASD Enterprise Portal (NASDeP) which was launched in 2018 to cater to high growth private enterprises”.
On the impact of COVID19 on SMEs, Adebayo, said recent news reports say the Minister of Industry, Trade, and Investment, Otunba Niyi Adebayo, inaugurated a 10-man steering committee to drive the implementation of the various support schemes for small businesses especially Micro, Small and Medium Enterprises (MSMEs) in the country. According to him, the Minister of State for Industry, Trade & Investment, Mariam Katagum is the Chairman of the committee while the Chairman, First Bank of Nigeria Plc, Ibukun Awosika is the Vice-Chairman.
He noted that in a bid to support the growth of MSMEs, the federal government has established a number of schemes geared towards providing finance at low-interest rates. He highlighted the schemes to include a special intervention fund managed by the Bank of Industry (BOI) to provide subsidized loans to MSMEs at a rate of 9% per annum. Agri-Business/Small and MEnterprise Investment Scheme (AGSMEIS) anchored by the CBN specifically for enhancing agricultural businesses of MSMEs.
“The latest of this move is the MSMEs Guaranteed Offtake Simulation Scheme which is aimed at providing bridge financing in supporting the payroll costs of MSMEs that are currently grappling with severe cash flow problems due to the disruptions induced by the global pandemic.
He said that the vulnerable Nigerian MSME sector has been one of the sectors that have been badly hit by the current economic weakness brought about by the COVID-19 pandemic. Several businesses have been affected by supply chain disruptions and low demand for their products and services due to the weakened consumer purchasing power, leading to substantial loss in revenue.
Also speaking, Chairman, Non-Metalic Mining, Manufacturers Association of Nigeria (MAN), Mr Mallinson Afam Ukatu, noted that the Nigerian business environment is becoming more hostile and unbearable.
He also observed that the horrible business environment is being compounded by the escalating exchange rates, and forex scarcity coupled with the Covid-19 pandemic.
He listed conditions to be met by government to better the economy especially boosting the MSME saying “For us to come out of recession as a country, the government must remove all multiple taxes levied on manufacturers, and all the ministries that are visiting factories with all forms of charges should be cautioned.
The government should encourage manufacturers way of formulating policies that is investment friendly.
The government should grant tax holiday to manufacturers during this period of general economic hardship if we must come of recession.
They should think of incentives to manufacturers and not exploiting or punishing them with levies and taxes.
The government should make low single digit loans available with less bureaucracy if the country must experience growth.
Lifting tax burden of the manufacturers will help in creating more employment, thereby lifting jobless youths out of the street.
Let the federal government privatize all the federal roads to individuals and companies or hand it over states government for easy access to maintain and repairs.
The government should also create policies that will encourage competitiveness of the Nigerian manufacturers.
Government should think of tangible grants to the manufacturers as well as non interest loans to attract more visitors into the manufacturing sector.
The government should warn its agencies to desist from seeing manufacturers as avenues to make money for themselves”
He noted that manufacturers are not making profit, adding that this is because of massive infrastructural deficit.
“We generate power by ourselves and the cost is unbearable. What about road rehabilitation, majority lost our manufactured goods and raw materials to bad roads, our vehicles and vans breakdown on the daily bases as a result of the poor condition of our roads. High cost of natural gas.. How can gas produced in Nigeria be charged in US dollar?
In conclusion, Ukatu urged manufacturers to stand up and defend their rights..