Noma Iguisi is the chairman of Nigerian Association of Small Scale Industrialists (NASSI), Edo State Branch. Iguisi, in this interview with Churchill Okoro, highlights areas the incoming president should focus on to boost small-scale entrepreneurs. He also speaks on Governor Godwin Obaseki’s impact on SMEs, and advocates survival strategies for small businesses post-subsidy removal. Excerpts:
It is believed that small-scale businesses are a catalyst for economic growth, has this been a reality in Edo State?
Yes, Micro, Small and Medium Enterprises (MSMEs) are the catalysts for growth all over the world and, in Nigeria, we have over 40million MSMEs employing over 80 per cent of the working population. Though the exact figures of the numbers of these enterprises are not available in Edo state, we can say that the position of the state is not too different from the rest of the country.
So, we can say that the MSMEs are the catalysts for growth in Edo state with enormous potentials for wealth generation and job creation in the state.
Could you talk about the growth trajectory of small-scale industries in the past decade?
This is actually a difficult question in the sense that there are a number of factors to look at in measuring growth trajectory in the MSMEs sector. An enterprise may have increased its profitability without growing the manpower base. For instance, simply because of the nature of technology deployed in operations and so on.
Within the past decade, there has been some level of growth in the sector because a number of MSMEs practitioners have received trainings that have enhanced their capacities for e-commerce and other strategies for market access, which hitherto was one of the biggest challenges of entrepreneurs over the years and these have impacted positively on their sales.
Government has also done a lot in the area of provision of production space for some entrepreneurs just like the production centre in the state as well as regular power supply for these entrepreneurs using alternative power supply from Ossiomo power plant. Also, a number of skills training and entrepreneurship development had been carried out by the Edo State Skills Development Agency and other international partners for a number of entrepreneurs in the state. Most importantly, MSMEs funds have been made available through various windows by both government and development partners over the years, and this has cumulatively had a positive impact on the sector.
What are the barriers to the growth and expansion of small-scale industries?
The barriers include poor access to finance, poor access to market, lack of power or electricity, poor knowledge or technical know-how on production and management practices as well as unfavourable government policies and multiple taxation.
It is a well-known fact that no organization can grow without adequate funds, how has it been with access to loans from financial institutions?
Yes, it is true that no enterprise can grow without adequate funding, and access to finance has been one of the major challenges faced by small business owners. Most banks rarely give loans to small business owners because of the fear that the risks of defaults are high. They, therefore, resort to giving conditions such as matching funds, guarantees, collateral and so on. This makes it difficult for these entrepreneurs to access loans from their banks. As a result, only a few MSMEs are able to access loans.
What is the interest rate like and how does it influence businesses?
The interest rates for commercial and microfinance banks are quite high and reaching up to 40% or more per annum, sometimes with no moratorium periods However, interest rates for the Bank of Industry (BOI) and the Central Bank of Nigeria (CBN) are usually a single digit, but conditions for accessing the loans are stringent.
What is the state government doing to lend a helping hand to small-scale businesses?
The state government has created the MSME fund, which is domiciled with the Bank of Industry here in Benin City. There are a couple of industrial clusters in the state where small scale businesses can operate with building and other facilities provided by the state government including uninterrupted power supply from Ossiomo power plant.
What is the state government doing to promote “Made in Edo” goods in areas of branding, production and exports?
The Ministry of Business, Trade and Cooperatives headed by the commissioner, Afishetu Braimoh has organized a couple of exhibition and fairs within the state in the past, sponsored some small-scale business owners to fairs and exhibition outside the state and promoted the “Made in Edo” products outside the shores of the country. She has also facilitated the visit of some investors and businesspeople from Florida, USA in the past. The Edo State Investment Promotion Office (ESIPO) and Edojobs are also doing a lot in this regard.
What are the best low-cost small-scale industries a budding entrepreneur can venture into?
The best low-cost businesses that budding entrepreneurs can start include waste collection and aggregation, especially polythene; waste recycling/polythene bags production; shoe making; paint production; clothing and garment production as well as food processing.
Ahead the planned removal of subsidy, how will this action affect small-scale entrepreneurs?
The action will adversely affect small-scale entrepreneurs as the price of fuel which is rumoured to skyrocket to about N750/litre will result in increase in prices of raw materials, transportation and other production costs. It is also expected that salaries of workers will have to be increased by these MSMEs practitioners. A lot of people already foresee a number of these businesses either folding up or struggling if there are no interventions or other survival strategies by the government.
In a few weeks’ time, Bola Tinubu will be sworn in as Nigeria’s president, what is your agenda for the president as regards reviving the ailing economic sector?
My advice is that he should develop a solid industrial policy that will favor MSMEs. There has to be adequate funding in form of grants and loans by the government; training for MSMEs should be conducted regularly, and there has to be constant electricity supply.
Our infrastructure, especially roads, need to be given critical attention. Also, the issue of multiple taxation has to be addressed and skill centres and industrial clusters have to be built across the country.
Lastly, I will advise that he tackles the issue of insecurity headlong and also ensure that the value of our currency is restored, especially through promotion of export of local goods and services.
There has to be adequate funding in form of grants and loans by the government; trainings for MSMEs should be conducted regularly, and there has to be constant electricity supply