Buhari’s mid-term report on SME sector: Big strides, little progress

By Yinka Kolawole
AFTER two years in the saddle, the report card of the Buhari Administration on the Micro, Small and Medium Enterprises (MSMEs) sector indicates that the government has made giant strides, especially in the recent past, on policies to move the sector forward. However, operators believe there is much more to be done before the sector can make real progress. The government largely ignored the sector for most part of the mid-term as no specific initiative was taken to address some of the sector’s challenges.

However, as part of the effort to boost the sector, the acting President, Prof. Yemi Osinbajo, in January 2017, launched a nationwide project named “MSME Clinics” in a bid to facilitate speedy growth of MSMEs in the country by tackling the problems militating against the sector. He said the project would serve as a one stop shop to address challenges faced by small business owners in the country by providing opportunity for them to meet with the industry regulators, talk to them and hear their problems.

He stated: “The term clinics was chosen deliberately to reflect three things all borrowed from the health sector. The first is that individual MSMEs face problems that can hopefully be addressed through direct access to relevant officials. The second is that direct consultations with very senior experts will find solution. The third is that a reasonably large number of people can be attended to without any need for expensive and time consuming travels to agencies offices.”

Expensive and time consuming travels

Specifically, the clinics which brings together MSMEs and relevant regulatory agencies like NAFDAC, CAC, SON, BoI, FIRS and others aimed at ensuring that those agencies become facilitators of businesses not obstacles to business development. Special Adviser to acting President Osinbajo on MSMEs, Mr. Tola Johnson, who is also a member of the National Council on MSMEs, said the federal government has started implementing plans to empower 360,000 MSMEs annually. Johnson noted that they have so far successfully engaged with 4,602 MSMEs in three states, not including Lagos, Rivers and Kano States.

MSMEs Council: A 26 member Council on MSMEs was inaugurated to further drive the development of the sector, with Prof. Yemi Osinbajo, as the chairman.  Other members include: Minister of Industry Trade and Investment; Minister of State Industry, Trade and Investment; Minister of Finance; Minister of Mines and Steel Development; Minister of Youth Development; Minister of Communications, Minister of Budget and National Planning; Minister of Water Resources; Minister of Power, Works and Housing, Minister of Science and Tech; Minister of Agriculture; Minister of Women Affairs; Minister of Information and Minister of State Ministry of Budget and National Planning. Others are CBN Governor; Chairman, Nigerian Governors Forum; Economic Adviser to the President; SA on MSMEs to the Vice President; President of Manufacturers Association of Nigeria (MAN); President of National Association of Small and Medium Enterprises (NASME) and; Director General of Small and Medium Enterprises Development Agency of Nigeria (SMEDAN).

Enterprise financial empowerment: Government has set aside N112.2 billion in the 2017 budget for the Government Enterprise and Empowerment Programme, GEEP, a micro credit scheme designed to provide interest-free loans to market men and women, traders, artisans, youths and farmers. Beneficiaries of GEEP are to receive between N10,000 and N100,000 loans with a one-time five per cent administrative fee.

Senior Special Assistant on Media and Publicity to the President, Office of the Vice President, Mr. Laolu Akande, said the programme has already recorded good progress with the disbursement of 57,234 interest free loans. “GEEP which is designed for well over one million Nigerians has now registered 3,162,451 people who have shown interest and are members of 26, 924 registered cooperatives for purposes of the loans. So far, women participation has been remarkable with 56 percent of loans so far disbursed to women beneficiaries in 28 States and FCT.   Directives have also been given to scale up the loan disbursement to 150,000 by end of next month,” he added.

Development bank: Aimed at unlocking credit for SMEs in the country, the Federal Government also established the Development Bank of Nigeria, DBN, recently licensed by the Central Bank of Nigeria, CBN. The Buhari administration was said to have inherited the project, which was conceived in 2014, with a determination to resolve all outstanding issues and set a target of 2017 for its take-off.

Minister of Finance, Mrs. Kemi Adeosun, said the bank is being positioned to galvanise the Small and Medium Scale Enterprises sector for the overall development of the nation’s economy. According to her, the Buhari administration is aware of the role of SMEs in national economy, hence the resolve to position the DBN as a catalyst for the development of SMEs.

Chief Executive Officer of DBN, Tony Okpanachi, said the bank aims to make up to 20,000 new loans to small businesses within its first year of operation as part of efforts to help unlock credit to the economy. DBN is a wholesale financial institution, which aims to increase access to finance for Micro, Small and Medium Enterprises (MSMEs) through eligible financial intermediaries, with start-up capital of $1.3 billion (about N396.5 billion).

Not much has changed – Operators 

Operators in the MSMEs sector say tough conditions have continued to bar majority of them from accessing the Micro, Small and Medium Enterprises Development Fund, MSMEDF. The N220 billion Fund was launched by CBN on August 15, 2013.

Vice President, Small and Medium Industries (SMI) group of Manufacturers Association of Nigeria, MAN, Alhaji Ali Madugu, stated: “A lot of our members applied but they could not access the fund because there are conditionalities and processes, and you don’t go direct to CBN; you have to apply through commercial banks. Up to the fourth quarter of 2016, only few of our members said they were able to access the loan.”

Chairman, Nigerian Association of Small Scale Industrialists, NASSI, Lagos Chapter, Kuti George, said: “None of our over 3,500 members has been able to access it. The major reason is the conditions stipulated to access the loan; if they want to do something that will work, let them go and learn from the Lagos State Employment Trust Fund, how within a year of conception of the scheme, they have been able to lend to over 1,000 small businesses.

“We cannot be in recession and say we want to jumpstart our economy and be putting conditions that people cannot meet. In other nations, they are giving SMEs money with less stringent measures, and cheap interest rates and that is why China, India is bombarding our economy with their own products. If they have put stringent measures the way it’s been done here, they wouldn’t have grown their economy and be exporting to us.”

 

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