Repositioning SMEs as economic pillars after 62 years

One of the greatest desires of any nation is to build a resilient economic system that is self-sustaining, highly competitive, and externally visible.

No doubt, citizens of every nation too desire a strong and reliable economy and a conducive environment where they can live and operate satisfactorily.

To this end, nature endows nations with natural and human resources through which they can develop economically and sustain their citizens.

More often than not, this growth is enhanced through trade and exports.

Before Nigeria gained independence in 1960 shortly the after the discovery of oil Nigeria's economy was serviced by non-oil exports provided by agriculture and solid mineral sub-sectors.

As the biggest foreign exchange earners they contributed about 65 per cent of Nigeria's aggregate income.

However, in a post-independence economy of oil boom era, Nigeria's economy faces challenges arising from volatility in oil prices.

Experts say SMEs are critical in diversifying the economy to fix the shortfall in foreign exchange earnings as obtains in other economies.

Stakeholders at the 2nd Abuja SME Conference and Exhibition expressed concern that "in the case of Nigeria, SMEs have performed below expectations.

This is coming at a time that reports show that SMEs are the backbone of major developed economies, as well as important contributors to employment, economic and export growth.

A 2020 national survey shows that SMEs contributed 46.31 per cent to the nation's Gross Domestic Products (GDP).

The 2020 NANO, Micro, Small and Medium Enterprises (NMSMEs) was conducted by Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in conjunction with the National Bureau of Statistics (NBS),

"MSMEs accounted for 96.7 per cent of businesses and 87.9 per cent of employment generation as at 2020.

"Also MSMEs accounted for 6.21 per cent of gross exports within the Nigerian economy

"In 2020, a total of 61, 954, 73 persons were engaged in MSMEs in Nigeria,'' the report said.

The stakeholders blamed the challenges confronting the growth of SMEs on a combination of factors, ranging from security, attitude and habits of SMEs through economic related factors to inconsistencies in policies.

While underscoring the need to reposition SMEs as agent of export trade, they appealed to President Muhammadu Buhari to declare a state of emergency in Nigeria's export sector.

"The call is necessary in view of many bottlenecks hindering the prospect of the sector in Nigeria, especially access to export markets,'' the ACCI President, Dr Al-Mujtaba Abubakar said.

The Director-General of SMEDAN, Mr Olawale Fasanya highlighted the need to support the development of SMEs in Nigeria.

He said this was view of the strategic position they occupy in growing the economy, creating jobs and wealth as well as promoting exports.

Fasanya further said that it was imperative in galvanizing Nigeria's non-oil export to become more competitive.

According to the SMEDAN boss, Nigeria's non-oil export earnings non-oil exports in 10.083 billion dollars in 2021 was insignificant when compared with other emerging economies earn from same sector

"The export market is all about competitiveness and this borders on price and quality. Bangladesh a country once touted as poor, exported knit and woven garments alone, estimated at 30 billion dollars in the first seven months of 2021.

"India, another emerging market, exported textiles and apparel worth 29.8 billion dollars between April and December 2021, according to India's Ministry of Textiles.

"Vietnam, another emerging market, earned 57.54 billion dollars from export of phones and accessories in 2021 according to the General Department of Vietnam Customs..

"Argentina earned nearly 21 billion dollars from export of delivery trucks, soybean oil, and meal, according to the Organisation for Economic Co-operation and Development,'' Fasanya said.

He urged the Central Bank of Nigeria (CBN) and other development institutions to creatively support the MSMEs to access financial resources.

Fasanya said that adequate power supply and friendly ports operations were critical in increasing exports in Nigeria.

"Friendly regulations are instrumental to increasing MSMEs exports in Nigeria.

"Quick wins for MSMEs exports is deliberate efforts of state governments to ease access to land, provision of common processing facilities in clusters, and improvement in security," he said.

According to him, strengthening export processing zones and creating awareness on export standards and potential are also quick wins for MSMES.

Similarly, the Managing Director and Chief Executive Officer, Abuja Enterprise Agency (AEA), Mr Shehu Abdulkadir said that improved access to financial incentives and provision of basic and technology were essential in the growth of MSMEs in Nigeria.

Abdulkadir also called for adequate legal and regulatory framework as well as improved commitment to building domestic expertise and knowledge.

In his presentation entitled, "The Role of Abuja Enterprise Agency in Promoting SMEs as Agent of Export Trade'' Abdulkadir said enhancing MSMEs' export potential remained critical to diversifying Nigeria's economy.

"This in our view will lead to the attainment of our goal to expand our non–oil exports and address the myriad of challenges we face as a country," Abdulkadir said.

Meanwhile, the Nigeria Export Promotion Council (NEPC) has pledged concerted efforts to address some of the identified challenges.

The Executive Secretary, NEPC, Dr Ezra Yakusak, in a recent media report said having identified the challenges posed by export rejects to boosting non-oil exports the remained resolute in curbing them.

For this reason, Yakusak recently led an inter-agency team to the United Kingdom (UK) as part of efforts to address incidents of export rejects.

He said that cases of rejection had resulted in stricter inspection regimes on Nigerian exports in the importing countries.

"In some cases this has led to the suspension or ban of some products.

"The exporters have to bear the cost of either reshipping the banned product to Nigeria or destroying the product," he said.

Meanwhile the Federal Government has assured of the political will to implement the report of the Ministerial Committee on Export Rejects.

The importance of the recommendations is not lost on the Minister of Industry, Trade and Investment, Mr Adeniyi Adebayo.

He said that implementing the recommendations will increase the export basket of agricultural commodities and foreign exchange earnings for the country.

An SME operator, Mrs Gertrude Nwuga said that SME play a tremendous role in reengineering the socio-economic landscape of any country.

"The dynamic role of SMEs in developing countries as engines through which the growth and development objectives of developing countries can be achieved has long been recognized,'' Nwuga said.

She urged the government at all levels to strengthen efforts in facilitating needed incentives as well as enabling the environment for SMEs to thrive.

"I believe the success of SMEs will assist other economic indicators perform better to improve the overall well-being of the people,'' Nwuga said.

As Nigeria grows in nationhood and as countries move away from fossile energy into cleaner energy, it is important that oil producing countries have to boost other sources of income Nigeria cannot afford to lag behind.

Not diversifying will spell massive economic crisis in the future when already millions of vehicles in developed countries are no longer powered by petroleum and diesel.