Monday, 7 December 2015

SMEs, Franchising Key To Diversification Of Nigeria's Economy - Stakeholders

The vital role of Small Medium Enterprise (SMEs) as the only authentic foundation for accelerated industrialization, growth and development, as witnessed in all the newly industrialized countries like China, Korea and Singapore have clearly proven that for Nigeria and other African nations to economically develop, SMEs need to be seriously encouraged.

Stakeholders in the industrial and franchising sectors recently gathered for a two-day SMEs and Franchising Conference organised by Informa Life Science Exhibitions in Lagos.

While delivering a lecture entitled: ‘Leveraging Finance for Sustainable Development of MSMEs in Nigeria’, the Director-General Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Alhaji Bature Masari, stated that Micro Small Medium Enterprise (MSMEs) play an important role in the economic development of the nation, through job creation, growth support to other sectors of the economy, which contributes significantly to improving the living standards and local capital formation, thereby “encouraging  innovation and competitions in developing economies.”

Masari noted that MSMEs represent over 90 per cent of private businesses and contributes to more than 60 per cent of employment and the Gross Domestic Product (GDP) in most Africa countries. According to him, MSMEs account for over 90 per cent of total business enterprises in Nigeria and have been noted to provide 85 percent of employment in the country. This is evident in the survey we did with the National Bureau of Statistics (NBS) in 2013”, he stressed.

Director of Strategic Partnership and Liaison SMEDAN, Dr. Friday Okpara 
The DG who was represented by the Director of Strategic Partnership and Liaison SMEDAN, Dr. Friday Okpara, further stated that MSMEs have a crucial role to play in stimulating economic development, direct employment and poverty alleviation, therefore they are the engine of growth that transforms both developing and developed economics.

Mr. Ladi Alade, Chairman of Nigerian Association of Small Medium Enterprises(NASME), in his speech highlighted access to finance and financial incentives, basic and technological infrastructure, adequate legal and regulatory framework, electricity supply and a commitment to building domestic expertise and knowledge as some of the major challenges of SMEs in Nigeria.

Participants at the SME and Franchising Nigeria Exhibition and Congress in Lagos recently
He pointed out that most multinational franchisers have often come into Nigeria through third-country business extension due to the challenges due to issues of truth and legal framework. ''Before now, most of the multinational companies that are targeting the Nigerian market, have always done so through a third country. Some of the South Africa companies in Nigeria are global brands that came to Nigeria through Franchise. It's because those global brands believe South Africans understand the Nigerian market. The major problem of franchising in Nigeria is that there is no proper legal frame work i.e legislation to back businesses'', he said.

Mr. Alade revealed that NASME is currently trying to reach out the government to grant at least five years tax holiday for all startup in order to enable them to grow and provide jobs. He added that they are also working towards the support of the Federal Inland Revenue Service (FIRS) and Corperate Affairs Commission (CAC).

He stressed that if the government, corporate organizations and other stakeholders could give support to startups by creating platforms such as Informa Life Sciences Exhibitions, SMEs can play a key role in diversification of the nation's economy.

According to the Managing Director, West Africa, SAP Africa Region Limited, Mr. Kudzai Danha, it is imperative for startups to seek for ways technology could assist them to deliver their work and seek the technical-know-how and managerial skills to optimize available tools.

He stated that many businesses in developed nations have a long term plan that they work towards but many African business often focus on short time plan which also affect their sustainability. He said SAP through its Ariba network have been given support to SMEs in the continent by creating a platform that enable them grow their businesses.

''Businesses around the globe can now discover, connect, and collaborate with key customers, suppliers, and other partners via the Ariba Network, the world’s most comprehensive and open business network. Ariba's software connects hundreds of thousands of companies interested in buying and selling products and services. It makes money by charging fees on each transaction, much like a credit card company. In Ghana, the network is helping farmers and we believe it's an opportunity that the Nigerian startups should key into'', Danha said.

Commenting on essence of the conference, the managing director of Informa Life Sciences Exhibitions, Simon Page, said, “the launching of the initiative is to tap further into Nigeria’s rich and growing economy. It is important to be on the forefront of its development and the exhibition/conference seeks to provide numerous opportunities for SME and franchises to further expand their presence and grow.”

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