Mr. Eke Ubiji is the Executive Secretary of the Nigerian Association of Small and Medium Enterprises. In this interview with NGOZI AMUCHE, he outlines the challenges facing entrepreneurs across the nation and proffers solutions. Excerpts:
What are the challenges facing the operations of small entrepreneurs in Nigeria?
There are series of challenges still facing the smooth running of our businesses. Although some of them are gradually being addressed by the government, but a lot still need to be done. For example, the issues of infrastructure and power situation in the country have not been addressed.
In Nigeria, you don’t look at the cities like Lagos, Port-Harcourt as a yardstick; we have 776 local governments in Nigeria, you take sampling from almost everywhere to know if the concerns of SMEs are being addressed. A lot of SMEs in the northern part of Nigeria are having challenges and they must be put into consideration. Though, their problems have not been addressed like other parts of the country.
For Nigeria to sustain the present economic recovery and achieve the growth forecast, it must adhere to aggressive investment in infrastructure and boost productivity in the economy
Lack of information is the major problem of small businesses in Nigeria. There is a lot of information on the economy, interest rates on many companies and government’s website, which are highly beneficial to business owners but which we are ignorant of. How many business owners have the time to search for such information? Most people are not even aware of government policies and how they affect their businesses. They just sit and criticise the government. There are also many businesses owners that are not aware of several incentives offered by regulatory bodies.
What do you think can be done in addressing some of these challenges?
The Federal governments has started looking towards that direction. For instance, it had set up SME Council chaired by the Vice President, Prof. Yemi Osinbajo. There are lots of activities going on like ease of doing business among others. There is issue of taxation voluntary access and income declaration, the campaign is ongoing now and it will end this month (March). The essence is to help them get more people into the tax net but people are still saying the time is too short. Government has set up development bank of Nigeria for SMEs to have access to finance but they are not involve directly to SMEs. They just started and if you look at their template, they have good plans and ideas.
There are lots of sub-standard products circulating in Nigeria. What is your association doing to educate members on quality control?
Part of internal programmes organised to help our members includes the national quality Infrastructure to promote quality standard in production process. Our organisation has also incorporated quality Management Company known as NASME policy Assurance limited, so that we can be able to satisfy members that are into production and also be able to market their products beyond Nigeria, and to ensure they comply with International standard because it is one thing that is affecting our products outside the country.
What is the update of the National Collateral Registry which took off last year?
Its impact on financing the small and medium enterprises sub-sector cannot yet be determined. For the purpose of clarity, this is an initiative of the Central Bank of Nigeria, in collaboration with International Finance Corporation, designed to stimulate access to finance by Micro, Small and Medium Enterprises. From all indications, the real impact of the legislation on SMEs may not be known in the next six months. But the expectation is that it would be helpful on the long run.
At the moment, there is no information from our members on the impact of the new law on their businesses. It has just been signed and the effect may take some time to manifest. May be in the next six months we can begin to talk about the effect it has on our members’ ability to access finance. The law is however most desirable and we expect that, over time, it will have positive impact on the SME sector because, if well implemented, our members will begin to have access to loans even when they don’t have landed property.
How would you advise the government in the area of sustainability of the present economic recovery?
For Nigeria to sustain the present economic recovery and achieve the growth forecast, it must adhere to aggressive investment in infrastructure and boost productivity in the economy, reduction in multiplicity of exchange rates, alignment of procurement policies at all levels of government to support domestic investment; investment policy that would protect domestic investors; tax policy that is investment friendly; and interest rate policy that is investment friendly.
How would you rate the government policies especially that of the Central Bank of Nigeria as regards forex intervention?
I expect the Federal Government to caution the CBN on some of its policies that are not designed to grow the economy. If policies are not SMEs friendly, the economy cannot grow because small businesses are the engine room of every economy all over the world.
Access to fund should not be tied to unrealistic conditions. Limiting collateral to Certificate of Occupancy and other valuables should not apply to fringe players. We need to adopt the idea of collateral registry, which is in practice in other economies. Collateral registry means that your jewelries, your movable properties, such as motor vehicles and televisions could be placed as collateral and if you pledge it, you can access fund.
