One of the easiest ways of developing any economy is to develop SMEs because of its roles especially on developing economies of Africa. Developed economies of the world never reluctant in promoting SMEs, with the understanding that SMEs create jobs in an economic system and reduces unemployment insecurity.
In the area of agriculture it helps to provide sufficient foods for the citizens thereby reduces the rate food importation which makes the government spend huge amount of money on foreign currency while local production is impoverished.
It is certain that countries that embark on food importation would find it difficult to develop its agricultural system which also creates job opportunities for its citizens.
However, if SMEs sector must be developed, let us consider the followings so that government and its agencies in charge of providing soft loans will not be giving out grants without much result. Before now government had made efforts in providing soft loans worth billions of Naira to boost SMEs operation in Nigeria and that it had done through its agencies, Government Enterprise and Economic Programme (GEEP), Deposit Money Banks Credit on Small and Medium Scale and several others. Government has done well as it continues in providing credit schemes that empower the operation of SME sector in the country. The question is, with these credit schemes provided, how many of the SMEs are creating jobs to reduce unemployment pressure in the Nigerian system? If the sector is engaging people to work as we claim, such massive unemployment rate in the country today will not be.
In as much as government has done well in providing soft loans to boost SMEs operation, let it address other components of the sector. Its chain reaction must be tackled otherwise, government will continue to budget billions for the sector without desired result. And that is why even with the credit schemes, many operators in this sector have gone into extinction and the few operating are struggling to survive and seriously reducing workforce for inability to pay.
Major challenges of SME operations in Nigeria are yet to be addressed and if addressed today their impact will be felt in the Nigerian system. Yes, some of the SMEs need funds to continue in business but many can raise themselves funds to build their business if other issues are addressed.
Though government is providing soft loans, but enabling environment is key to SMEs survival for it to contribute to economic growth. Training is also important. In developed countries government agencies and institutions that provide funding for SMEs train and mentor operators to ensure growth of the operators. We need to strengthen this aspect to achieve results.
Multiple taxation has been a long standing issue which business operators have been agitating for rebate with no avail. If we consider what an average SME operator pays, ranging from loan repayment, taxes, levies, rent and diesel. How can business survive after such huge payment.
Again, epileptic power supply. Unfortunately, with government efforts Nigeria is yet to find its bearing in power supply unlike Ghana, Togo, Benin Republic etc. where production is going on well. In our own case, business operators pay monthly NEPA bills without consistent supply of power thereby spending profit and part of business capital on diesel. This alone will keep militating business development in Nigeria.
Local farmers can’t talk about storage because there is no power supply to preserve perishable farm produce. There are no access roads to convey farm produce to the cities for consumption.
We hope that 2019 government of the day will make concerted effort to providing enabling environment, tax rebate and power supply for operators in the economy to survive.