Opinion
Strengthening Nigeria’s Industrial Sector
In realisation of the importance of the small scale industry sub-sector in any developing economy, the Federal Government by an Edict in 1974 set up the Small Scale Industries Credit Scheme (SSICS). The scheme was a joint effort between the Federal and state governments to provide finance for viable industrial projects.
The scheme was originally financed by the Federal Government with the respective state governments contributing a percentage which was loanable to prospective entrepreneurs to set up their businesses or industries. To ensure the success of the scheme, a Loan Management Committee (LMC) was established by each state in their ministries of commerce and industry and called small scale division to operate the credit scheme.
Like every other state, the Small Scale Industries Credit Scheme was established in Rivers State and was functional until 1989 when it was arbitrarily abolished in the state. The small scale industry sub-sector is vital to any developing economy such as ours, just as the small scale industries credit scheme is important to enable people interested in setting up their small scale industries to do so.
The loan management committee was composed of the permanent secretary of the relevant ministry which was usually commerce, industries and cooperatives as chairman, with others as members. The committee had the right to co-opt other relevant individuals from time to time with a full time secretary. Prospective applicants for the loan must be residents of the state and they applied on a prescribed form to the secretary of the state loan management committee.
The criteria for the acceptance of an applicant depended on the possession of the relevant technical and management ability, integrity as ascertained by an interview panel set up by the committee coupled with the feasibility of the project as ascertained through a project feasibility study prepared according to guidelines. But the scheme was allowed to die in Rivers State, leaving the state without a clear cut industrial policy in operation until today. There is the need to revive the scheme to provide the state with the bearing of industrial policies and realities of today.
The federal and state governments should rekindle their industrial thinking and policies by encouraging the Small scale industries sub-sector as the cradle and bedrock of industrialisation. This all important sector is not receiving the needed attention in this country and this is borne out of ignorance and selfish desire to operate a non-functional policy that will not benefit the general public except the originators alone. Governments should make special budgets for the small scale industries loan scheme to keep afloat and functional. Some states such as Imo, Oyo, Ondo, Kaduna and Rivers in 1990, had budgetary allocations for the small scale loan scheme which were hardly released, especially in Rivers State.
Oyo State, for instance, spent N10 million on 200 small scale industries between 1974 and 1989 while Rivers State which budgeted N500,000 for 1989 disbursed N200,000 only to hand-pick individuals.
Also, in realisation of the importance of the small scale industries on the economy, the Federal Government in 1988 set up the National Economic Reconstruction Fund (NERFUNG) for Small and Medium Scale enterprises (SMSEs) which was clearly captured in that year’s budget. The fund provided medium and long-term funds to eligible enterprises through participating commercial and merchant banks. Forty-nine banks participated in the scheme.
The industrial base of this country is not encouraging at all. The federal and state governments should work hand in hand to ensure that small scale industries thrive in this country by reviving the NERFUND and make it accessible to any prospective industrialist. Rivers State, for instance, is lagging behind industrially as existing industries are ailing, lwhile some are operating below capacity. There is lack of interest and political will by our leaders to encourage industrialisation in the country.
This luke-warm attitude results in ineffectiveness of the few operational small scale industries as they find it difficult to cope with modern trends and innovations. Small scale industrialisation makes appreciable impact on any nation’s economy. Something must be done to improve the industrial growth of the country. Governments should see the need for industrial growth and make adequate provision for prospective industrialists through revolving loans and establishment of industrial estates in the states. There is need to encourage rural impact on the rural dwellers and minimise rural-urban drift.
In Rivers State, the idea of establishing an industrial estate project was mooted and started at Ahoada but did not see the light of the day. That was a white elephant project that consumed millions of naira then but did not benefit the people. It is high time government determined the industrial destiny of the country as this would boost job creation and enable us compete favourably with other industrial nations.
Government should come out with a sound and dynamic industrial policy for the country while giving financial support to small scale industrialists. Investment in the non-oil sector in the country will boost the economy as the country has abundant mineral resources and business opportunities for export.
Government should collaborate with private investors to promote small scale industrialisation with a view to improving the country’s Gross Domestic Product (GDP).
It is advisable to reduce multiple taxation and other unfriendly businesspolicies as well as provide potential investors with adequate information in the areas of manufacturing quality products. The industrial sector of the country is grossly underdeveloped so it needs to be more active in the effort to diversify our economy. There is also need for better cooperation and professionalism among industrialists in the country to enhance their capabilities. The more cooperation and exchange of innovations, the better for the volume of profit they will make in their business.
Collaboration and partnership will go a long way to increase the availability of products in the country and it pays faster and leads to growth in the sector. Industry players should attract more young professionals into the sector and endeavour to give them the necessary training to improve their skills. Industrialists need to increase their access to public decision making arenas, in technology, services and markets as well as provide an avenue for sharing and exchanging ideas and experiences.
For Nigeria to have a strong economy, it must grow its industrial base as a money spinner and potential source of revenue for the country.
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