Nigeria Targets Streamlining SMEs Intervention Policies

The Vice President, Yemi Osinbajo said that the Federal Government would streamline intervention policies for Small and Medium Enterprises (SMEs) to enable more people to benefit.

He gave the assurance at the Third Annual Tony Elumelu Foundation (TEF) Entrepreneurship Forum in Lagos. He stated that the government would continue to embrace policies that would encourage start-ups to thrive.

He commended the Founder of TEF, Mr Tony Elumelu, for the initiative, which he noted had been result-oriented. Speaking on “Tyranny of the Past or History”, the Vice President called on Africans to stop remembering the past with apprehension.

He said that dwelling on the past could cripple ones hope and vision. According to Osinbajo, African countries are nearly defeating hunger and famine with new farming tools, discovering cure for diseases and eradicating most causes of infant mortality.

He called on the TEF participants to take advantage of the initiative for the growth and development of their countries instead of relying on the past.
“The great days have come, everyone that has succeeded has his or her own failures,” Osinbajo said.

Earlier, Alhaji Aliko Dangote, President, Dangote Group, identified infrastructure gap, corruption, policy inconsistency, low inter-trade rate and scarcity of finance as some challenges of entrepreneurship development in Africa.

Dangote, however, said that a resilient investor would overcome the challenges. He advised SMEs to avoid waste, build strong teams and ensure cost efficiency to survive.
Dangote said that Africa’s potential was enormous, hoping that the continent would experience a boom with enhanced agriculture.

Zamfara State Governor, Abdul’aziz Abubakar Yari, said that public and private sectors should work together for industries to survive.
Yari urged that Africa should do away with corruption and policy inconsistency to advance.
Katsina State Governor, Alhaji Aminu Bello Masari, said that African leaders must ensure formulation of policies with the private sector for the survival of the continent.

Masari said that proper education was paramount for entrepreneurs to succeed, adding that basic education was important for the growth of any business. He urged access to loans by SMEs at lower interest rates.

Oba Otudeko, Chairman, Honeywell Plc, said that government and private sectors’ cooperation was important for Africa’s development.
Otudeko remarked that entrepreneurship was not easy, and urged entrepreneurs to conceive unique ideas to succeed.
“Empires of the future are empires of the mind”, Otudeko said.
He added that African leaders should implement policies that would improve logistics and inter-African communications.


Oyo Partners CAC on Registration of Businesses

Oyo State Government and the Corporate Affairs Commission have agreed to establish a one-stop-office for speedy registration of businesses in the state.

This was a resolution made after a meeting between the state government and the CAC Ibadan Zonal Office at the Oyo State Government Secretariat on Friday in Ibadan.

The News Agency of Nigeria (NAN) reports that the meeting was held at the request of Gov. Abiola Ajimobi in his bid to make the state a haven of business activities.

NAN also reports that the governor had expressed readiness to remove bottlenecks in the process of setting up businesses in the state as government intensified efforts at broadening the scope of the State economy to attract foreign and local investors.

Ajimobi, who was represented by Mr Yinka Fatoki, Executive Secretary, Bureau of Investment Promotion, called on the CAC to partner the State in its renewed effort at industrialise and make it a hub of commerce.

The governor called for the establishment of a `one-stop-office’ to fast track the process of registering businesses in the state.

According to him, the newly flagged-off industrial park and Free Trade Zone in the state would attract large, medium and small scale businesses.

Ajimobi said that the state government was ready to provide the needed logistics in terms of office space and other resources to expedite the process.

Mr Sulaiman Muhammed, the Southwest Zonal Director, CAC, assured the state government of the agency’s readiness to actualise the establishment of the one-stop-office.

He said the creation of the office would truly fast track the registration process and help the CAC generate more revenue.

“Business registration by CAC has been transformed into a speedy process with the incursion of the Internet. Business name availability which used to create hindrance can now be done online.

“Today, we now achieve result under 24hours, while registration could be done online within a week.

“It is our belief that this effort will reduce middlemen’s interference and activities of touts that make the cost of registration go outside the real cost.

“All the state government has to do is to write a memo to the headquarters and I will do the rest of the follow-up toward the creation of the one-stop office within the Secretariat,’’ he said.

Muhammed said the establishment of the one-stop-office would not only assist business owners in the registration of their businesses without sweat, but help the CAC to increase its internally-generated revenue.


NAFDAC Waives 50% on Registration Fee of SMEs

The National Agency for Food, Drug Administration and Control (NAFDAC) says it has waived 50 per cent on registration fee for locally manufactured products to promote Small and Medium Scale Enterprises (SMEs).

The NAFDAC spokesperson, Dr Abubakar Jimoh, told the News Agency of Nigeria (NAN) in Abuja on Friday that the measure would go a long way to promote economic development.

Jimoh explained that it was a new policy of the agency under the leadership of its acting Director-General, Mrs Yetunde Oni.

He said that the measure was in response to Federal Government’s policy to promote locally manufactured companies in order to boost the economy of the country.

Jimoh said that in the past, a lot of people and some licensed consultants had extorted money from innocent Nigerians in the name of NAFDAC registration.

“Sometime back, we discovered that a lot of people were extorting money from Nigerians for registration fee of products. We decided to license some consultants who are professionals.

“But those unscrupulous elements fizzled into the consultancy firm that registered with us and continued their extortion from potential entrepreneurs.

“They collect as much N250,000 to N300,000 for registration of less than N50,000, claiming that part of the money will be used to settle NAFDAC officials.

“The agency has taken decision to stop them after the expiration of their licenses; we will stop them and deal directly with intending manufacturers,” he said.

Jimoh explained that in the last seven years, the former NAFDAC director-general, Dr Paul Ohi, introduced a policy that all young graduates willing to establish businesses would be given waiver.

He said that the policy was still in existence but young graduates from NYSC were not taking such advantage.

The spokesperson noted that NAFDAC recently established a Small Business Desk to guide people going into SMEs on how to set up their small factories.


Towards a Business-friendly Environment By Chinwe Egwim

Nigeria is currently ranked 169 out of 190 in the ease of doing business index by the World Bank. There are eight focus areas within the plan; ‘starting a business’ features at the top.

Small and medium sized enterprises stand to benefit from the recently launched 60-day National Action Plan by the Presidential Enabling Business Environment Council (PEBEC). This group contributed 50% to Nigeria’s national output in 2016.

The ministries, departments and agencies (MDA) are tasked with implementing the plan but participation from other stakeholders such as specific state governments, the National Assembly and the private sector, is also required if the plan is to have any realistic chance of succeeding.

Nigeria is currently ranked 169 out of 190 in the ease of doing business index by the World Bank. There are eight focus areas within the plan; ‘starting a business’ features at the top.

Generally, in Nigeria, the procedure for start-ups is cumbersome. When compared with developed economies, there are at least two times as many steps required. The action plan aims to reduce the number of days required to register a business from ten days to two. The Corporate Affairs Council will drive this by adopting a more electronic approach
To stimulate economic growth, a strategy, which is popular in developing nations, is boosting employment through the empowerment of small and medium scale enterprises (SMEs). The CBN defines SMEs as companies with an asset base between N5m and N500m (US$2.5m), and staff strength ranging from 20 to 300 employees.

For instance, in Canada, SMEs account for over 60% of employees in the private sector and contribute slightly over 50% to economic output produced by the business sector. Meanwhile in the US, SMEs represent 49% of private-sector employment and account for 98% of firms exporting goods and 33% of exporting value.

Harnessing the economic potential of this segment in Nigeria is still a mirage since several supporting policies have not delivered on set milestones due to poor implementation, inadequate funding, power supply shortages etc. However, this administration has shown some interest in developing and empowering SMEs. Infrastructure deficit has played a major role in hampering SME growth in the country. In this regard, power shortages stick out like a very sore thumb.

Perhaps, this year, when the budget is finally released, we may see some traction with infrastructure development across the country as N2.2trn has been set aside in this year’s budget proposal for capital expenditure. The ministry of power, housing and works accounts for 24% of the total projected capital expenditure while the ministry of transport accounts for 12%.

Certainly, it is one thing to receive the necessary funds for project facilitation and another to actually implement. Thus, the onus is on the government to implement effectively.

Another area the National Action Plan by PEBEC covered is trading across borders. This is not very encouraging in Nigeria. It seems the FGN has considered reducing the number of agencies operating at the air and sea ports to ease the process of clearing goods to within 24 or 48 hours. This should promote growth and stimulate pan-African trade. The latest monthly Economic Report from the CBN puts non-oil exports provisionally at US$1.1bn in Q4 2016, indicating substantial rises of 128% from Q3 2016, and 367% from 2015. On an annualised basis, non-oil export earnings stood at US$3.2bn in 2016, representing just 0.8% of GDP for the year.

If Fx liquidity is sustained and there are increased incentives for exports (such as the reintroduction of the export expansion grant) as well as promotion of trade across borders, there should be a pickup in export-oriented activities and a considerable rise in non-oil revenue which bodes well for the country’s fiscal position.

Business travel into Nigeria can be challenging due to the long visa on arrival and submission processes as well as the poor conditions at the airports; this discourages potential foreign partnerships. However, the council has now harmonised the entry and exit forms at the airports. Additionally, authorities at the airports have been mandated to install the iCheck Security Solution Technology, which should phase out entry and exit forms in the medium to long term.

The initiatives spelt out in PEBEC’s action plan are laudable but there are still teething problems preventing businesses from thriving. Besides power supply issues mentioned earlier, access to finance also features at the top and a lack of it has disfigured businesses and in some cases resulted in business failures or shutdowns.
Recent data from the People’s Bank of China show that China experienced a 17% increase in small business lending in Q1 2017; SME loans now account for nearly a third of all outstanding loans.

Based on data from the CBN, loans to small scale enterprises from commercial banks amounted to N103bn in 2014 (representing less than 1% of the total loan book that year). Unfortunately, the fragility of the macroeconomic environment and growing concerns around non-performing loans suggest that loan growth from commercial banks will be at best subdued in the near term.

On a brighter note, the Development Bank of Nigeria (DBN) recently received a licence for wholesale development finance from the CBN. The bank will be able to draw from funding pledges totalling US$1.3bn from the World Bank, the African Development Bank, and German and French state development funds. The DBN will provide loans at lower rates to viable businesses focused on any sectors of the economy.

Although not as popular in Nigeria as in developed economies, funding businesses can also be through support from venture capitalists, angel investors or private equity firms. Venture capitalists typically swoop in to assist already established businesses that may be drowning while the other two are usually seed investors for start-ups or small business with low capital base.

For the real economy, a conducive business climate will bolster job creation, improve household pockets, per capita income, business and consumer confidence as well as general quality of life.

CBN Releases $280m to SMEs, BDCs, Others

The Central Bank of Nigeria further intervened on the state of foreign exchange on Tuesday with the injection of another $280 million into sectors of the economy including Business Travel Allowance, Personal Travel Allowance, medical bills and tuition and Small and Medium Enterprises (SMEs), which received $100m.

In a statement by its Acting Director, Corporate Communications Department, Mr. Isaac Okorafor, the CBN also added that it had commenced the weekly sale of $20,000 to Bureau De Change (BDC) operators.

The statement said the CBN also on Tuesday opened bids where it offered $100m wholesale, seven to 45 days’ forwards to end-users through the Deposit Money Banks.

Okorafor further explained that the CBN introduced the use of Form Q for the SMEs to ease the documentation challenges usually encountered by this category of business.

He explained that through the arrangement, the SMEs were allowed to purchase $20,000 per quarter.