Needless to say that small and medium scale enterprises (SMEs) form the bulk of the businesses in Nigeria. It is a major contributor to the country’s Gross Domestic Product (GDP). The major attraction has been its less capital intensive and flexibility in satisfying the needs of majority of the citizenry.
SME’s contributions to the growth of the nation’s economy cannot be over emphasised. Since the development of MSME policy in Nigeria in 2006 in partnership with the United Nation Development Programme (UNDP) and later reviewed in 2010 and 2015, SME has become a major employer of labour and major contributor to the nation’s GDP. In fact, the sector drives the economic and industrial transformation of the country.
According to the Organisation for Economic Co-operation and Development (OECD, 2005), SMEs are considered to be independent firms that employ less than a given number of employees. SMEs are classified in terms of size and financial assets.
The Central Bank of Nigeria report (2003) said SMEs are a very important economic catalyst in developing and industrialising countries of the world. This confirms the United Nations Industrial Development Organisation (UNIDO) report that posited that developing countries can conquer poverty and inequality by democratizing, deregulating and liberalising the integration of the global economy.
In spite of its significance to the well-being of the citizenry and the growth of the nat-ion’s economy, the operations of SMEs suffered major setbacks in 2020 due to the outbreak of COVID-19 pandemic and the #EndSARS protests across the country.
During the pandemic, which lasted for over four months, many operators of the SMEs in the country closed shops, with many resorting to online transaction. This arose from low patronage and the total lockdown of the economy occasioned by COVID-19.
The effects of the lockdown on SMEs were exacerbated by the #EndSARS protests that destroyed businesses worth millions of Naira across the country. Till date, SME operators are counting their losses as many of them are finding it difficult to come back to business.
There are, however, a number of other factors that limited the growth and expansion of SMEs in the country in 2020. Such factors include unavailability of loans from financial institutions, high cost of credit facilities, high interest rates, high maintenance cost and the demand for duly registered collateral obligations.
Inconsistency in government policies, bureaucratic bottlenecks experienced in the administration of incentives and support facilities from all levels of government, as well as multiple taxation arising from various levies imposed by the federal, state and local governments, also play a great role in slowing down the growth of SMEs in the country.
Meanwhile, inadequate or decrepit infrastructures like good roads, power supply, high cost of raw materials and export constraints further tighten the noose against SMEs in the country.
These and many more served as major setbacks for SMEs in Nigeria in the year 2020.
Notwithstanding these setbacks and challenges, there is a ray of optimism am-ong SME operators that the year 2021 will usher in good prospects for the sector. Majority of business owners say they cannot wait for 2021 to come, to see if there will be added value to their businesses.
This prospect is, however, dependent on a number of factors, including an enabling environment that encourages healthy competition among SMEs and attracts local and foreign investments. How soon will that be is a question only time will tell.
Entrepreneur Charges Corps Members On Entrepreneurial Skills
An entrepreneur, Mr Emmanuel Aondoakaa has advised youth corps members to strive to acquire entrepreneurial skills in order to be self-reliant instead of waiting for white-collar jobs.
Aondoakaa, the Chief Executive Officer of Own Your Enterprise Campaign (OYEC), gave the advice when he delivered a lecture held for 2021 Batch ‘B’ Stream 2 corps members posted to Wanune in Tarka Local Government Area of Benue State.
According to him, there are no jobs in Nigeria to fall back to after the service year, as business is the key to financial independence.
“Unemployment rate is increasing among Nigerian graduates every year and the only panacea is business, so that you can be financially independent and even become employers of labour,’’ he said.
Aondoakaa pointed out that the best time to venture into business was at this period of insecurity, saying that all they needed to do was to look for the needs of their environments and venture into it.
Fielding questions from youth corps members after the lecture, he noted that the capital to kick start a business had always been the discouraging factor among young graduates.
However, he said there were many foundations such as Tony Elumelu Foundation and the likes giving grants to young entrepreneurs to encourage self-reliance in Nigeria.
He noted that applying and getting the grant might be difficult but promised to train interested persons on how to apply and get it.
Also speaking, Mrs Ann Adogah, one of the resource persons, advised the Youth Corps members to take the entrepreneurship development lecture seriously, as it would be “Plan B’’ for self-reliance after their service year.
Rivers Farmers Hail Wike On Anti-Grazing Law
All Farmers Association of Nigeria (AFAN), Rivers State branch has hailed Governor Ezenwo Nyesom Wike for the signing of the anti-open grazing bill into law.
State chairman of the association, Comrade Ofimaobari Igwe who said this in an interview with newsmen in port Harcourt said the law will ensure peace in the state.
Igwe said the development will also lead to massive food production in the state.
According to him, the law will boost the confidence of Rivers farmers as their security is now guaranteed.
He also stressed the need for the government to set up a committee to ensure the implementation of the law.
Comrade Igwe also called on the government to look at the possibility of assisting farmers who lost their crops to flooding last year in the state.
He said farmers in the state will continue to support all efforts by government to restore security to the state.
The Afan boss also called on farmers to take advantage of the gesture by the government to improve their farming activities.
Igwe also called on them to visit the association office for registration.
Open grazing of cattle has been a source of conflict between herders and farmers across the country.
It was against this backdrop that governors of the 17 Southern States met at Asaba, Delta State to unanimously banned open grazing in the zone.
The anti-grazing law in Rivers State was a follow-up to the Asaba meeting.
The AFAN chairman said the situation would bring peace and boost food production in the state.
By: John Bibor
FCMB’s CEO Advises SMEs On Corporate Governance
The Managing Director of First City Monument Bank, Mrs Yemisi Edun, has advised corporate organisations, particularly micro-businesses, to adopt sound corporate governance practices in order to stand the test of time.
A statement from the bank, titled ‘Adopt Corporate Governance, Yemisi Edun charges SMEs’, said she made the call as the guest speaker at the inaugural corporate governance and enterprise development conference organised by H. Michael & Co in Lagos, with the theme ‘Corporate governance best practices: Imperatives for business sustainability’.
Addressing the conference’s physical and online audience, the bank’s chief noted that no business could stand the test of time without sound corporate governance practices.
She said that micro-businesses also required the same to achieve optimum performance and sustainable growth, urging small businesses to imbibe corporate governance practices.
Edun listed the long-term benefits of sound corporate governance practice as strong brand equity, decreasing risks, reducing capital cost, and enhanced performance.
She added that only businesses with solid corporate governance practices could stimulate economic growth and enhance innovation while protecting communities and the environment in their daily activities.
In his keynote address, a former Deputy Vice-Chancellor, Babcock University, Prof. Sunday Owolabi, described corporate governance as “doing the right when no one is looking”.
Owolabi urged businesses to self-regulate and embrace full disclosure and accountability.
He also advised the Financial Reporting Council of Nigeria to consolidate the country’s multi-sector codes of corporate governance into a single omnibus document for corporations in the country.
The conference convener, Dr Adeyinka Hassan, a notable enterprise governance advocate, noted that more than 100 companies in Nigeria had fizzled out due to corporate failure
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