Charles Odii, is an entrepreneurship development expert, author and small business advocate. Before his appointment as the Director General (DG), of the Small and Medium Enterprise Development Agency (SMEDAN), Odii worked as the Chief Operating Officer of Red Media Africa and started SME100 Africa in 2014. He also worked as media consultant to the Internal Revenue Board of both Delta and Imo state governments. In this interview with John Osadolor, BusinessDay Managing editor and Favour Okpale, a Correspondent, Odii spoke about the agency’s vision for MSMEs.
SMEDAN seems to have been effective in providing various forms of support for businesses in the country. How do you get the resources for this task?
In one word, I would say collaboration. At SMEDAN, we are very open to collaboration. We engage in collaboration with the private sector, government entities, and international development institutions. And we are doing this because we understand the problems of the MSME ecosystem. At the last count, we know that there are approximately 39 million small businesses, but due to the COVID-19 pandemic, flooding, and other unforeseen circumstances, we lost approximately 2 to 3 million of them. On the 1st of December 2023, Vice President Kashim Shettima constituted the National Council of SMEs. In that council, the Vice President is the chairperson, while the Governors are the chairpersons in their different states. That council does three things. It acts as a one-stop shop for anybody across the states that wants to start and scale up any business enterprise, as well as a feedback mechanism. So if you’ve got a problem in a state, one of the first things that you do is reach out to a business member organisation or the cooperative, and if it cannot be resolved at that level, it goes to the SMEDAN Secretariat. From the SMEDAN Secretariat, it goes to that particular state’s council on SMEs, which the Governor chairs. If, however, it cannot be resolved, it comes to the National Council, and then we try to put a stop to or resolve it. Now, we couldn’t have achieved many of these things if we were not collaborating with state governments.
My predecessor right now happens to be the governor of one of the states and has been very helpful. One of the things we did was to meet him and say to him, Your Excellency, We understand the peculiarities of small businesses in Kastina State; let us try and create a fund for these small businesses in Kastina State. Now, we have funding for three things, such as money for working materials, money to rent or purchase workspaces, and money to boost up your working capital. So, this collaboration has worked very well. Right now, we’re about to collaborate with Nipost. What I’m wearing right now is made with N10,000, which is made in Nigeria. But our small businesses are beginning to complain that the cost of shipping depending on the location can even be more than N10,000. So we’re looking for innovative situations where you can get discounted fees. We understand that these are very, very difficult times for small businesses. So we’re looking out for collaborations with international organisations, the private sector in Nigeria, government institutions, and with our stakeholders in the ecosystem.
Having led the SMEDAN for nine months, what has been your vision to foster the growth of the SMEs?
Our vision basically is, in one word, to continue to grow. G-R-O-W stands for guidance; resources, which can be financial and non-financial; opportunities; and workforce support.
We believe that with the right guidance, the right resources, the right opportunities, and the right workforce support, any nanobusiness can become a microbusiness, the microbusiness can grow into a small one, and the small can grow into a medium, while the medium can become a large entity. In terms of guidance, we’ve set up a one-stop shop where we’re guiding our small businesses. If you want to export, you want to register your business, you want investment, you want standards; through the Standards Organisation of Nigeria (SON), you want to get the National Agency for Food and Drug Administration and Control (NAFDAC) number, we’ve organised and guided our small businesses. This guidance can be accessed virtually or physically from our website. If what you need to do is scale, we can point you in the right direction.
So, we want to be better organised by guiding the ecosystem on knowing who, where, and what to do.
In terms of resources, we understand that finances are very important. We know that capital in Nigeria is very scarce, and it’s also very expensive. I thank His Excellency President Bola Ahmed Tinubu for earmarking as much as 50 billion Naira for the MSME ecosystem, where approximately 1 million nano businesses will get an injection of 50,000 Naira in terms of non-repayable grants into their businesses and enterprises. What this has done is to help our small businesses, especially because we just conducted a report with MoneyPoint where we spoke to approximately 2 million out of the 40 million small businesses. We found out that less than 80 percent of them, on a monthly basis, make 250,000 Naira in profits. So imagine the government giving you 50,000 Naira, which is approximately one-fifth of the profit that you make. It is a welcome initiative to be injected into your business for growth and expansion.
The vision for the ecosystem is one that will “grow Nigeria” to metamorphose into the eight priority sectors that we’re tracking. Everything that we’re doing at the agency is driven by data, which has enabled us to see the top eight fast-growing sectors in the MSME ecosystem. The first one is the agricultural food value chain. So, Grow Nigeria will then metamorphose to “Eat Nigeria,” and this is everything that’s got to do from the farm to the dining table—so as much as giving our smallholder farmers the right seedlings and giving them the best technology and global best practices for them to harness better yield, we’re also helping to perfect the market value chain, moving the product from the farm to the warehouse, to the market, and to the consumer. SMEDAN is playing a critical role. The next sector that we’re looking at is our leather, garment, and textile sector. So Grow Nigeria, in that sector will metamorphose into Wear Nigeria. It’s similar to what I’m wearing today, which was actually made in Nigeria. This is the sector that is very dear to my heart because the very first business I started was in the fashion industry.
What we want to do is create new entrepreneurs in this sector as well as support the existing entrepreneurs. And we can’t support them if we don’t have financing and infrastructure for them.
So if you just take a walk into our complex, you’ll see a modern state-of-the-art facility centre that houses over 150 sewing machines. So what happens is that anyone in this sector can come in here, access a loan at a single-digit interest rate, go and buy your fabric, come back here, turn that raw material into a finished product, warehouse it here, and then distribute it at a discounted rate to anywhere in Nigeria. These are some of the things that we’re doing for our ecosystem and for that sector.
The third one is Teach Nigeria. We cannot change anything if we don’t take education seriously. We are very prevalent in that sector, from our entrepreneurial education to our curriculum that will be converted into our local dialect. All of the value chain, especially adult education, is very much there. The next is our technology sector, designed to digitalise and innovate Nigeria. One of the biggest talent programs that’s happening right now in the world is the 3MTT, by the Ministry of Communication and Digital Economy. One of the things that we want to do is also to become an off-the-cuff for those kinds of talents. So all those people who are going to learn can come here and help our small businesses to build websites and help our small businesses with marketing and digital communications. The next is our tourism sector. I visited one market, the Eke market in Mende, under the bridge. Almost all the products that are churned out of there are purchased for local consumption and mainly for exports. I remember I took a basket that was woven with a cane, and then my friend from London took it from me. And then when she was going to the UK, someone was willing to pay her as much as 300 pounds for that small basket. And this is something that I was given that if I was going to buy it, it would be less than one pound in Mende.
So we want to support that ecosystem, get people to visit our tourism, patronise our tourism, and that brings me to the next point, which is our service industry. Nigeria is service-dependent.
We want people to start patronising Nigeria. There are 200 million Nigerians, approximately. If 10 percent, which is 20 million, of those people drink one cup of coffee, that’s 20 million people times N500 naira. That is the amount of money that will be injected into that ecosystem if just 20 million people patronise that coffee industry. So we have the purchasing power; we have the numbers. We need Nigerians to start to purchase what they produce, wear what they produce, listen to what they produce, watch what they produce, and consume what they produce. So, that is our vision for the ecosystem. As I said, the President provided N200 billion, N75 billion for manufacturing, N75 billion for SMEs, and N50 billion for nano businesses.
We have now complemented our efforts with another N10 billion where small businesses can collect loans at single digits without collateral. We now have democratised finance, more tools, and access to education and training. We are training these small businesses to actually have the capacity to unlock financing in Nigeria and out of Nigeria because it’s part of our mandate at SMEDAN to raise financing for our small businesses within and outside the shores of Nigeria.
Those are some of the things that we have as our vision, a broad vision for the MSME ecosystem.
How do you choose your intervention programs to ensure sustainability and growth for these businesses?
First of all, the conceptualisation of our programmes comes from the data available to us. Our data show that women are starting businesses faster than men. We have a women’s desk that we set up at SMEDAN, and that has helped to train our women, and to a large extent we have categorised our women into three big brackets. Women in Nigeria are either homemakers who sit at home to assist their husbands and raise their children or professionals or entrepreneurs, meaning those who have a job or those who have started a business. And finally, there are those women in Nigeria that are students. So to a large extent, these three brackets are where we put our women, and we have different programs for them. For the women who sit at home, we have a lot of programs that they can take advantage of, and that also goes for the women entrepreneurs, where we have a lot of training programs available. But we also have to unlock funds.
Very recently, we launched a women fund in Ile Ife, and we want to make sure that we actually distribute the funds up to the tune of one billion Naira for women-owned businesses in Nigeria. At the digital trade conversation at the Presidential Villa, Abuja, about 1,000 women got free websites and email addresses courtesy of the SA to the President on ICT. So, you know, these data are things that we’re tracking. The other one is the youth demographic. We’ve seen from statistics that a large number of our young people have reasons why they start businesses. This is one because they’re unemployed. The second reason is because the take-home pay of those who work does not take them home. The third is because they have passion for it.
We looked at our youth demography, and we further broke it down into three. One is the category of those who are graduates. Secondly, we have those who have skills, because you can be a graduate, but you don’t have skills. So, those who have skills, we try to match their skills with what they have; for instance, someone who has gone through the apprenticeship system of the Igbo trader, He’s got the skill. He might not be a graduate, but what’s the next thing for him? It’s financing. So, we have programs like the National Business Skills Development Initiative where we give training to the beneficiaries and then give them tools. We also have a financial empowerment scheme, where we train and then we give them finances. We have One Local Government, One Product. In this case, we identify cooperatives, which we support.
This is an administration where the son of a nobody can become somebody without knowing anybody. Well, how do we do that? We have to leverage technology. So you can go to our website and apply for these programs. You click on the program, fill out the form, and submit it. We don’t get to know who you are. It is only at the time of executing the program that we reach out to you. To be a part of this program, you don’t need to know anyone at SMEDAN. You don’t need to know any religious leader. You don’t need to know any politicians. We’ve democratised that access with technology. You might not have access to the technology, but there are cooperatives in the 774 local governments. Some people have organised themselves into various cooperatives, such as rubber plantation cooperatives or smallholder farmers’ cooperatives. So what we do is we work with those cooperatives and we give guys financing. Some part of the financing is a loan, some is a grant. So we help the cooperatives better.
What we do in our monitoring and evaluation process is to reach out to everyone involved. Some of the stories that I tell you are real stories of beneficiaries. We monitor the impact that we make after every six months. That is how we can now tell you we’ve created this amount of jobs. This is because the people that we’ve empowered are going to create more jobs for other people.
We also have a programme called the conditional grant scheme. We give you a grant on the condition that you employ one person. So we go back and we say, How many people have you employed? How has your revenue moved? We’ve categorised nano businesses as those that have less than three employees and are doing less than N3 million. So, if you were doing less than N3 million and we give you a laptop today, six months down the line, we come back to see your level of progress. If you’ve gone beyond N3 million, we know that you’ve moved from a nanobusiness in terms of revenue to a microbusiness; we record that, and that’s really how we have the data that we’re leveraging for our work. So far, we’ve created 16,000 jobs, and this is because we’re monitoring closely and evaluating the process.
What specific programs or initiatives have you launched since assuming office?
I think that the African Continental Free Trade Area (AfCFTA) is a fantastic agreement that exposes Nigeria to a market of approximately 1.4 billion. As of the last count, 47 countries had ratified the agreement. It means they’ve extended it to the national level and to the National Assembly. There is also a protocol for women and youth. So what we did was set up a women and youth desk in SMEDAN where we want to basically take advantage of that protocol to make sure that small businesses in Nigeria are not slack. There’s a digital trade desk that combines digital trade and intellectual property. There’s an intellectual property protocol there as well. In a few days we’ll launch our creative academy for young people because we see that they are very interested in creating digital skills. That creative and digital academy will then help to equip our young people with those skills that they need to start and thrive in Nigeria. We also set up a desk for our climate renewable energy desk because we’re seeing that we need to start keying into what the world is looking at, which is a reduction in carbon emissions. The world is looking at renewable energy. The world is looking at alternative sources of power. His Excellency the President is the number one driver of CNG vehicles. So at SMEDAN, what we do is set up that desk. We have started to train our small businesses on how to install solar panels.
There’s a company called DSTV, which is a cable channel company. Apart from buying licences for content across the world, they have set up a whole new entity, say installers of DSTV dishes across the country. And it’s the same thing that we’re doing right now. Those are the kind of initiatives that we are bringing, making sure that we are not closing our eyes to the data but we see where there is a spike; we are there and we understand what the spike is, and we are setting up and addressing the issues there.
SMEDAN has committed to revamping industrial development centres and hubs in strategic locations across Nigeria. Can we get an update on this plan in terms of timelines and commencement?
In December last year, we launched the one in Idu, which is a facility with 150 sewing machines serving the communities here. What we do at our industrial development centre launch is to conduct a study, which shows us that there is a cluster. I met with the association, and they told me that in Abuja alone they have about 10,000 fashion designers. And we met with them and understood what their problems are, and that helped us to situate that factory here. There is also a big cluster of carpentry and woodwork here in Idu, and what we did as well was set up state-of-the-art machines with equipment right here. The other thing we’re looking at is the fast-moving consumer goods, where we have set up a packaging and branding factory where people can package liquids and some powder. Then the last is our recycling. We’ve seen that there are lots of people doing a little in partnership with the Recycling Association of Nigeria.
We are now one of the off-takers where we can take some of those things and produce waste to wealth-producing plastic that can be used for pallets. We want Nigeria to become an outsourcing hub. So our Industrial Development Centre in Kastina actually sits 500 outsourcing individuals in that complex. So with 500 laptops, these people can be trained on business process outsourcing, they can be trained on customer service, they can be trained on digital skills, and they can have skills—information communication technology skills. We are launching these Industrial Development Centres based on the need and the cluster in the different states. And again, based on the partnerships, we are going from state to state working with the state government to see how they can help us because many of our industrial development centres have been encroached upon by these people they call “Omonile.” So we are also working with them on how we can reclaim some of those lands. We are even in court in some instances, trying to do all we can to reclaim those properties to serve the MSMEs ecosystem.
Aside from those associations, are there other corporate bodies or institutions that you partner with on these hubs?
Absolutely. The UNDP, for instance, just reached out to us; they want to start conversations on the hubs. We have some banks who are reaching out to us to say they want to start having conversations on situating digital centres in our hubs. So, we are open to those sorts of collaborations. International development organisation, private sector, even government.
I will give you an instance with the Nigeria Commodity Exchange. I reached out and said, Listen, you have some of our industrial development centres sitting on like 23 hectares, and they want to situate warehouses there to collect grains. We are open to that because we know that in the long run, it betters the ecosystem. So those are the kinds of collaborations that we will work on. If BusinessDay comes to us to say they want to set up a media centre at our industrial development hub, we’re open to that. And so we would like to, as long as we can see in real-time how many jobs can be created, how productivity can be increased, and then how we can work together.
Any challenges since you came in and a legacy you would like to leave behind?
When I got into government, I found out that a lot was being done, but the people are not aware of it. They don’t know. That’s the biggest challenge, which is why we come to people like you as media institutions. So please help us amplify this. Please help us tell these people. You are gatekeepers. Please help us so that the son of a nobody can become someone without knowing anybody, so that the people that are at the nukes are crannies can actually start to build trust. The reason why people do not trust governments is because they believe that the information does not get to the bottom of the pyramid. But if we have media institutions like BusinessDay helping to democratise or open up the nets, then we can get to see lots of people responding to the government, and we can see them building trust. That’s the biggest problem. We are solving that by having town hall meetings, regular surveys, and regular listening meetings across our 36 states, offering solutions to the problems. But also by leveraging technology so that anyone anywhere can just go and take advantage of many of these things. And then they can begin to experience prosperity in their lives. The second thing that you have said is what I want my legacy to be? I want my legacy when I leave the Small and Medium Enterprise Development Agency to be an agency that’s clearly driven by data. So all the programs that we do and decisions made are informed by data, and the outputs are also informed by data. So, it means it is going to be an agency that moves all our small businesses, an agency that knows where our small businesses are located, the problems that confront small businesses in the different clusters, and then using data to make informed decisions to solve them. I want to see an agency that has empowered our small businesses, where Grow Nigeria becomes a thing, Eat Nigeria becomes a thing, and Wear Nigeria becomes a household name. That is the legacy I want to leave.
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