Start-ups expect improved electricity, security in 2016

Start-ups and other categories of small business say improved electricity supply and security will help drive them in the coming year.

Many of Nigeria’s small businesses provide their own power through different sizes of generators. This, resulting from power inconsistency, has continued to affect the profits of small businesses and has shut down a number of them. Data from small business managers say between 30 and 40 percent of expenditure goes into alternative power sources.

Similarly, many small businesses in the north-east part of the country have gone under, owing to the terrorist activities of Boko Haram. In other parts of the country, theft, robbery and institutional corruption have all presented varied levels of insecurity to small businesses.

“We ask the president to help improve the security situation across the country,” Frank Umedi, a small  business owner, told Start-Up Digest.

“The impact this will have on small businesses which are scattered everywhere, will be enormous. I had to close one of my businesses In Adamawa for fear of Boko Haram. Even when you are there, you will discover as an entrepreneur that patronage is low,” Umedi said.

Abdurahaman Modibbo Girei, president, Adamawa Chamber of Commerce and Industry, said many small business owners, including farmers, had fled Borno, Adamawa and Yobe states for fear of insurgency.

He said some micro businesses operators were still on because there was nothing else they could do, adding that productivity and sales were low in many places as people, including workers, had left the insecure areas for Kano, Kaduna and other less hostile states.

He said manufacturing firms such as Faro Bottling Company, Bajabure Industrial Complex, among others, were operating at low capacities, though their markets had been affected by forward movements and tension.

Farmers of groundnuts, sesame and vegetables, among others, have fled the security-risky areas of the north-east.

Banks are no longer in local governments where attacks  are high, as they do not have sufficient security personnel and are often attacked by terrorists.

“Everything, including business, is grounded in most areas. Access road to Damaturu, Taraba and Adamawa is still blocked,” said Shettima Bukar Jallaba, director-general, Yobe Chamber of Commerce and Industry, told BusinessDay earlier in the year.

Earlier, Remi Bello, immediate past president, Lagos Chamber of Commerce and Industry (LCCI), had said: “The tempo of economic activities in the northern part of the country has declined, access to the markets by companies in the southern part of the country has reduced resulting in loss of sales; while many enterprises have relocated.”

Bassey E.O. Edem, national president, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), said regular power supply and improved security in the country would stimulate the growth of businesses, especially MSMEs.

NACCIMA, which is the umbrella body of all the chambers of commerce in Nigeria, is convinced that even if regular power supply is the only achievement that will be recorded by the incoming administration of Muhammadu Buhari, businesses and economy will take better shapes.

“There is the need for the administration to recognise the importance of power to the survival of the industries and businesses in the country and ensure the reforms in the sector are improved upon so as to deliver to the generality of the Nigerian populace much desired stable power supply,” said Edem, during a review of state of the nation in Lagos.

“If this is the only thing the incoming administration will achieve, the businesses and the economy will be better for it,” he stated.

While commending the outgoing president Goodluck Jonathan for privatising the power sector, NACCIMA helmsman said the current output ranging between 2,700 mega watts (MW) and 3,500 MW were still insufficient to drive MSMEs and industries.

He advised the administration to demonstrate the political will needed for the development of alternative power sources such as solar, wind and coal, among others, so as to significantly improve on the power supply in the country.

“I do not see why the coal in Enugu should not be used to generate power,” Edem said.

 “Also, the incoming administration must ensure that advanced technologies used in checking the activities of these miscreants are employed by our security agents,” he advised.

There is also need for training and retraining of armed forces to better equip them with sophisticated techniques that will guarantee security of all Nigerians, he further said.

In a separate interview after NACCIMA’s interview earlier in the year, Adeniyi Ogunsanya, head of small and medium enterprises of the association, urged the Buhari-led government to expose MSMEs to better markets. According to Ogunsanya, many MSMEs were yet to understand market dynamics for their products as well as other ancillary concepts such as quantity and packaging.

“There must be deliberate commitment to expose SMEs to international standards,” he said, adding that the administration should collaborate with business groups such as NACCIMA and make all SMEs belong to the group.

“I urge Buhari to have an effective interface between planning and execution. There must also be better infrastructure for SMEs to thrive,” he added.