Experts on Monday emphasized the importance of focusing important policy recommendations for the development of Micro, Small and Medium Enterprises (MSMEs) on areas of funding, capacity, and structure.
They made the call at a webinar held by the Lagos Chamber of Commerce and Industry’s Small and Medium Enterprise Group (SMEG) (LCCI) with the theme “Ensuring SME Growth in a Challenging Economy.”
Mr Yomi Olugbenro, West Africa Tax Leader, Deloitte, stressed that these key areas would increase MSMEs contributions to the country’s Gross Domestic Product (GDP) and spur economy stability and growth.
According to Olugbenro, a viable financial system supported by technology is essential for funding and running effective settlement systems that would ensure MSMEs’ existence in the near future.
He stated that Small and Medium Enterprises (SMEs) were projected to survive despite the numerous global economic upheavals if only structural development could be built over time.
Additionally, he asked for greater credit risk coverage, better credit rating systems, and wider deployment of financing across important markets.
In terms of organization, Olugbenro emphasized the necessity of collaboration with business consultants to give SMEs technical help and access to markets.
He also urged the implementation of infrastructure-based policies, including effective power delivery to various industrial clusters.
“We must also build the capacity of entrepreneurs by providing capacity building support services focused on training entrepreneurs on relevant skills.
“The national education standards must be revamped to drive early exposure to entrepreneurship, and improve entrepreneurship education in state owned institution.
“SME loan portfolio must also be diversified following a gender and sector agnostic strategy,” he said.
Dr Peter Bamkole, the Director, Enterprise Development Centre, said that a national survey during the COVID-19 pandemic revealed that 93 per cent of SMEs encountered several challenges which led to some businesses shutting down and downsizing.
He, however, noted that the seven per cent that thrived were businesses that were digitally enabled in their operations from raw materials sourcing to after sales services.
He stressed that henceforth, SMEs must be more collaborative among themselves, and reinvent their business models with operations carried out in a more efficient, innovative and creative manner for profitability.
“A significant number of those in the services sector should think of renewable energy to reduce cost of production.
“SMEs must add more value to their goods and services before exports, connect with SME across the continent to optimise the benefits of the Africa Continental Free Trade Area (AfCFTA),” he said.
According to Dr. Michael Olawale-Cole, President of LCCI, discussions about the function, difficulties, and expansion possibilities of MSMEs have highlighted their significance as the backbone of any economy’s expansion.
Olawale-Cole, who was represented by Dr. Chinyere Almona, the Director General of the LCCI, remarked that according to figures from the United Nations, MSMEs account for 90% of enterprises, 65% of employment, and 50% of GDP globally.
However, he asserted that SMEs needed support more than ever as they dealt with the COVID pandemic’s effects, insecurity, supply chain problems, and the climate issue.
He emphasized that in these precarious times, Nigerian policymakers must look beyond economic recovery and explore how to reduce and eliminate the constraints MSMEs confront, enhance the business environment, and increase access to special intervention funds, markets, and technology.
He added that government must invest more in export infrastructure to ease the export of goods from Nigeria to the rest of Africa under the African Continental Free Trade Agreement (AfCFTA).
“In recent times, the Nigerian economy has suffered several shocks as a result of rising double-digit inflation rates; tepid growth; high unemployment, and even higher underemployment due to constrained productive activities and others.
“We still believe that these challenges can be fixed with the right mix of fiscal and monetary policies that promote targeted financing for the SME sector and intervention funding for manufacturers.
“The LCCI is also very interested in supporting SMEs in accessing funding opportunities by interfacing with local and international developmental finance institutions on behalf of our members.
“We reiterate our point that SMEs need special intervention funds targeted at supporting production, export capabilities, and building resilient supply chains,” he said.