FG’s cash-backed interventions on SMEs show less promise – analysts
… as South Africa, Zambia point way forward
Several Federal Government’s interventions to small scale businesses (SMEs) have shown less promise compared with when capacity building is prioritised ahead of such ‘monetary hand outs’ to beneficiaries mostly in Micro Small and Medium Scale businesses, even as South Africa, Zambia and neighbouring Ghana have shown more promise in their approach, industry analysts say.
Celestine Okeke, lead partner, Sustainable Entrepreneurship and Economic Development Initiative, told BusinessDay that there was need for the Federal Government to re-define its intervention strategy for Micro Small and Medium Enterprises to chart a way forward for them.
”If you look at the South African Model, the South African government do less of financial intervention. What it does is non-financial intervention, and place more emphasis on real time capacity building, which takes minimum of three years.
“In Zambia also, when the government wants to do something for wheat production, it did an interesting thing. The government got a private enterprise and got STANBIC IBTC Bank. The fund it should have launched as intervention for farmers, it gave it to a private enterprise through STANBIC IBTC,” Okeke said.
He explained, “The private enterprise guided the farmers on how to store seeds, procure seeds, plant the wheat, manage, harvest and transport it. They worked with the farmers for three years and hands off, and the farmers sustained it. It improved wheat production in Zambia to the point of exporting it and earning foreign exchange from it.”
If you keep doing financial intervention when farmers have not got the knowledge, you cannot fit the agricultural sector and other small-scale businesses like that, he stated.
He said, “Our neighbouring Ghana here also has a ‘Trade hub’ supported by the United States Agency for International Development, USAID – to develop agriculture in Africa. They came here in 2013 to establish it, we were not receptive to it, and they took it to Ghana. Look at the progress Ghana has recorded in Maize and other sectors, it is because of support from trade hub, and our breweries and others import maize from there.”
He also argued that economics of production was still a major source of concern for most farmers in Nigeria, which he said affected the farmer to be less competitive and do farming in such a way that it was less effective.
According to Okeke, “Most farmers don’t know for instance the economics of production of maize, which affects their input sourcing, or getting the right prizing. Economies of production also involves knowing the right variety of maize to plant and the right seed input “
Recall, we don’t have GAP, which stands for Good Agricultural Practices is fundamentally important. If a farmer does not know a scientific process of maize planting, that is a problem.
“Most of them don’t also know what precision agriculture is, which defines a particular crop for a particular type of land, and this is where soil testing comes in. People are planting maize in land not suitable for maize, which often leads to low yield and importation from companies that needed it.Access to quality seeds is also a concern.
He added, “We must take that step and say, which sector do we want to develop, and it is Agriculture, how do we get a scientific approach on how we want to advance agriculture. Even the Agricultural Promotion Policy of the government does not have such template and definition of what we want to do.”
Joseph Amenaghawon, programme coordinator for Open Society for West Africa, told BusinessDay that private sector driven support seem to yield more fruit that government’s interventions stating that greater percent of beneficiaries in government’s interventions don’t actually get the support, often because of loopholes and politicization of such schemes.
Ike Ubaka, president of All Farmers Association of Nigeria, also told BusinessDay that the government must also focus on the scientific approach to Agriculture which would ensure farmers are guided to modern techniques of farming through properly trained Agricultural extension workers.