Apparently having come to terms with the fact that the task of growing the domestic economy rests principally with the people of Nigeria and not foreigners, Vice-President Yemi Osinbajo recently admitted that without a functional Micro, Small and Medium Enterprises (MSMEs) sector, inclusive and sustainable economic growth would be nearly impossible.
We have always advocated that serious attention be given to domestic businesses within the MSMEs cadre from which we believe the jobs to cater for Nigeria’s growing population would come from. A country with over 27 million SMEs as disclosed by the Central Bank of Nigeria (CBN) should not by any means ignore or look down on the almost limitless economic potential these SMEs possess and which can be harvested to her benefits. Indeed, researches have shown that the MSME sector constitutes the spine of any country’s economy because as small industry operators, they weather and overcome stiff competition from foreign operators to grow and keep jobs for locals. Furthermore, the Small and Medium Enterprises Development of Nigeria (SMEDAN) had reported that MSMEs in the country currently represent 96 per cent of the businesses in the country and contribute 75 per cent of the national employment.
Now that the government appears bought over by the inherent capacities of Nigeria’s MSMEs, we would want that it actually follows through its words with the necessary action. Recognising that the government had in the past established numerous programmes to support the MSMEs in the country but with very little to show for such efforts, the new measures should be practical and tailored to the needs of the MSMEs. Fortunately, what they need to survive, progress and deliver to the economy are not hidden but known to everyone, even in government.
It is clear that conventional banks are not cut out for long term lending needed by MSMEs in the country. It is equally known that these banks are mostly comfortable to lend to short term business ventures as against start-ups which would need longer gestation period to pay back, and that is where the new Development Bank of Nigeria (DBN) should step in and be useful. The DBN, which was created and set up by the last administration of Dr. Goodluck Jonathan, to amongst other objectives, provide long term facility for MSMEs in the country to grow and expand, should be buoyed greatly by the Muhammadu Buhari administration chiefly for the benefits it would provide to the national economy through its support for MSMEs in the country.
Considering that the DBN reportedly has the buy-in of the World Bank, German Development Bank, African Development Bank (AfDB); and the Agence Française de Development (French Development Agency); as well as the European Investment Bank (EIB), it should by all means serve as a lifeline to Nigeria’s MSMEs sector. Its support to the MSMEs should be wholesale and strategic. Secondly, the federal government should step up and sustain its energising economy programme (EEP), another initiative which has got the support of the World Bank, and which aims to provide clean electricity supplies in mini grid forms to industrial clusters and big markets across the country.
Managed by a reconstituted Rural Electrification Agency (REA), the EEP has already started with pilot schemes in Ariaria Market in Aba – a market renowned for its industrial and commercial ingenuity; Sura Shopping Complex and Somolu Printing Complex in Lagos; as well as the Sabon Gari Market in Kano. Additionally, we are also of the view that tax breaks as offered to foreign dominated firms by the government should be extended to MSMEs to at least provide them some grounds to stabilise.