Nigeria’s economy underperforming due to weak SMEs sector-BOI

The Bank of Industry (BoI) has earmarked N300 billion for the development of the sector over the next three years to address the underperformance of the Small and Medium Enterprises’ (SMEs) sector to the nation’s economy .

It said the move was to make funds accessible for entrepreneurs to start up and expand their businesses in the country.

The acting Managing Director, BoI, Waheed Olagunju, explained that the Development Finance Institution (DFI) had so far disbursed about N15 billion to SMEs, creating about 600,000 jobs in the country.

Indeed, BoI emphasised the need to develop the SME sector, adding that most economies of the world have been able to transform their economies paying serious attention to SME growth.

He noted that the Nigerian economy has underperformed over the past years due to the weak SME sector while urging entrepreneurs to take advantage of investment opportunities in the nation’s power, construction and other sectors begging for investment.

Olagunju, during the 20th yearly public lecture organised by the Chartered Institute of Personnel Management of Nigeria (CIPMN), tagged: “SMEs as catalyst for sustained economic growth in Nigeria”, said Nigeria must promote SMEs using areas where the nation has competitive and comparative advantage.

He, however, commended the federal government policies instructing that certain percentages of government purchases must come from patronizing SMEs in the country, saying this would bring some increased level of relevance to the sector.

“We are going to help in building capacity for those SMEs to ensure that they are competitive in terms of quality and in terms of price. Our products have to be competitive and of the right quality,” he said.

He stated that the sector is still faced with myriad of challenges ranging from market access, weak local patronage of made-in-Nigeria goods, power supply, finance, information and lack of technology as a result of over-dependence on expensive sophisticated imported technology.

His words: “What is clear is that we need to industrialise Nigeria aggressively, because industrialisation is what makes the difference between the rich and poor countries of the world. It is not by accident that the rich countries are referred to as industrialised countries. Industrialisation is talking about value addition, processing is where the high quality of life comes in.”

He said according to a report he attributed to Oxfam, the industrialised countries of the northern hemisphere bought cocoa worth a billion dollars from Nigeria, Ivory Coast, Cameroun and Ghana, investing another $3 billion on value addition and generated businesses worth about $60 billion.

“In other words, they gained $56 billion by investing $4 billion. That period, the per capita income of cocoa producing countries was less than a $1000 where as in those processing countries, their per capita income was in double digits up to about $20,000 and this is why their standard of living are much higher in industrialised countries. For exporting primary products without value addition, we have been exporting jobs to these countries and exporting prosperity, importing unemployment to Nigeria and this is why we have the paradox of prosperity and poverty,” he added.

Managing Director, Central Securities Clearing System Plc (CSCS) and Chairman, Nigerian Economic Summit Group (NESG), Kyari Bukar, who was represented by Dr. Segun Omosakin, said the growth of SMEs depends on the activities happening around the country.

“There are lots of potential to harness within the Nigerian environment, SMEs should look beyond starting small instead dream big on how to grow beyond regions”, he said.

A management and financial consultant, Dr. Biodun Adedipe, asserted that Nigeria is desperately in need of energized SMEs to sustain the economy.

Adedipe said Nigerians have the power of ideas but lack the strength to execute on SMEs.

Earlier in his remarks, President and Chairman of Council, CIPM, Anthony Arabome, said government must ensure that they eliminate obstacles that presently stand in the way of SMEs operating successfully in the Country to accommodate more participation in such sector.

Arabome who was represented by the Vice President, Udom Inoyo said the institute through its yearly lecture and other forum, takes deliberate steps not just in improving the knowledge base of members, but also to make contributions to important national issues.