So much has been said and also done, concerning the development of the SME sector, not just in Nigeria but in several other parts of the world. At the African continental level, for instance, the Africa Union Commission (AUC), in its search for the evolution of “competitive, diversified and sustainable economies in Africa, underpinned by dynamic, entrepreneurial and industrial sectors that generate employment, reduce poverty and foster social inclusion”, established the Enterprise Africa Network (EAN).
The Network is a flagship initiative of the AUC, which aims at implementing the Business Development pillar of its Africa Master Plan for 2017-2021. The initiative would provide services relating to the developmental needs of African SMEs, including international partnerships with the private sectors of other economic groupings, including the European private sector. It will also offer advisory services for international growth as well as support for business innovation.
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The Enterprise Africa Network, therefore, becomes a strategic institutional resource, to facilitate the realisation of the objectives of the AUC by confronting the key obstacles hindering SME development and growth. It hopes to promote the participation of SMEs in the formal economy of their respective countries, as well as in regional and global trading spaces by tackling lack of access to markets and market intelligence, stifling regulatory barriers and hostile environment. This is a very good plan, at least on paper. And Africa is replete with good paperwork. Domestically, several funding plans have been made but little else.
As 2019 closes, what ought to bother Nigeria is not hate speech. If anything, our research should focus on the sources and causes of hate speech. Even then, it does not take an hour to decipher why Nigerians have never been more hateful of themselves as they are today. I can tell anybody for free that the moment a family is divided between the beloved and the unloved; there is no stopping unhealthy sibling rivalry and hatred. Ask the Biblical Joseph and his brothers! Today, everything in Nigeria is divided between the loved and the unloved – employment, social amenities, public projects, security and anything imaginable coming out of government – national and subnational. But like everything in Nigeria, shallow thinking has pointed to hate speech without giving a thought to its causes.
The bandwagon has taken off and everyone is milling down the wrong way. We are throwing laws at the symptoms of a deeply seated problem of poor leadership and discrimination; just as we throw money at every problem, without understanding their root causes. Hate speech is caused, first and foremost, by hate policies – nepotism, tribalism, discrimination and all the ills with which Nigerian politicians go to bed every night.
Our thoughts should be how to position our citizens, through their enterprises, to benefit from the many international agreements, including those on free trade. From all indications, there is need for SME operators to brace up, rethink their strategies and retool operational modalities, so as to maximally profit from the opportunities that may arise in 2020, not necessarily from the effective law-making work at the legislatures but from the opportunities across the borders. In this regard, we attempt here to highlight some of the attributes and strategies that must be manifest in the affairs of those SMEs that will pop champagne this time in 2020.
The Nigerian economy is growing at less than 3 per cent per annum as against its population, currently estimated at 198 million people and growing at a rate in excess of 3 per cent – a growth deficit. Ghana’s population of about 29 million people is growing at the rate of 2.2 per cent while its economy grew at the rate of 8.5 per cent in 2017 – a surplus and the fastest in five years, and 7 per cent in 2018. Ghana was the first country in Sub-Saharan Africa to achieve the Millennium Development Goal 1 – the target of reducing extreme poverty by half. We never did. Ghana has also become a middle-income country. Although Nigeria is not among the 37 Heavily Indebted Poor Countries, debt service is gulping about a quarter of its 2019 budget (N2.14 trillion). The problem is not debt or its service but where the money was put. Putting the money in a blatantly wrong use is a hate speech generator.
The oil market is still soft, with many traditional buyers of Nigeria’s crude, including India, either slowing, looking elsewhere or seeking alternative energy sources. Currently below 2 million barrels/d output is projected to reach 2.3 million barrels a day – some kind of miracle jump. In short, there is no certainty in this rapid production increase. This could negatively impact revenue, cut jobs and put more pressure on the beleaguered households and make them speak ill of anybody at all and we may have them a shot. Clearly, SMEs face a challenge and must therefore guard their loins and brace up for all sorts of negative externalities, including enhanced tax drives and worsening business space. All considered final growth in 2019 may be minimal and needless to restate that SMEs have little or no prospects when an economy stagnates.
The dividends of the failed strategy of neglecting the Warri and Port Harcourt ports and concentrating almost import trade in Lagos have come to roost. Almost all businesses in the hitherto highbrow Apapa GRA have shut down.
Nobody of any economic substance lives in Apapa. At best you find hapless landlords without an alternative. The economy of Lagos is bleeding but strangely the state is not complaining. It takes six days to take a container from the Apapa Wharf gate to Isolo, and even longer to return the empty container to the shipping company.
In the end, demurrage consumes the Container Refundable Deposit of about N400,000, which importers pay. Ask me why inflation continues to grow. The impact of the Apapa disaster on the Lagos economy is huge.
Even more important, SMEs must understand and embrace the reality of the time – the world has gone digital. Services are being migrated to the digital space. There is no hiding place for those that hang on to the dying analogue age. On this matter, there will be no standing on the fence. One is either in or out. Furthermore, exploration, discovery and deep utilization of digital platforms, the social media and marketing strategies will be imperative, if they are not cowed out of the social media. In this regard, investment in capacity development is vital. Many free offerings have been made in this area but operators must realize that there is actually no free lunch. A small training budget even if it is for the key man alone, is unavoidable. Continuous effort to create bankable projects, the lack of which is a major cause of the financial starvation of SMEs, and of course, general self-improvement of SMEs’ internal processes is important.
SMEs are not famous for their customer-centricity. The need for repeat business has never been their priority. It is time for SMEs to hold on to the customers they have been able to garner. The only way to do this is first to know who the customers are; listen to them and try to hear what they are saying. This guides the development and deployment of products and services. Owing to the fact that we have never been interested in whether the customer repeats or disappears, we are unable to innovate. Need identification precedes innovation. SMEs that close in on their customers and constantly interact through various digital channels will be better able to offer goods and services that meet customers’ needs.
EMEKA OSUJI
