We are in the season of politics, in the run up to the series of elections lined up for the first half of 2019. From now till next May, the nation will be selecting and electing the crop of leaders, from Legislators through Governors to the President, who will govern its affairs for the four years beginning mid next year.
As we know too well, politics drive economy. It is the policies and programmes initiated and implemented by the political class that determine the presence or otherwise of a conducive environment for businesses to operate. What this means is that politics is too important to be left to the politicians!
This is where the Small Business Owner must step in and be an active participant in the selection and election of the leadership cadre.
The spirit of enterprise is strong and growing in Nigeria. Estimates by the National Bureau of Statistics indicate that the country has 37 million micro, small and medium enterprises (MSME), which contribute not less than 48 percent of the nation’s Gross Domestic Product, and employs not fewer than 60 million people.
At a time when there is rising concern about diversification of the economy, the potential impact of MSMEs and the role of government in making these happen becomes even more significant. It is, however, common knowledge that small businesses face a myriad of challenges. In addition to the time-worn sing song of weak infrastructure, we have the usual suspects: ease of doing business, flips and flops in government policies, multiple taxation, access to finance, shortage of expertise, under-developed markets, etc.
Access to finance is arguably the elephant in the room. Banks recognise MSMEs as revenue sources through the grant of credit. They, however, remain wary of funding them, because they are yet to find a formula for managing the risks of advancing credit to this vital sub-sector of the economy.
In this regard, three key enablers are expected to drive a viable credit system: Credit Bureaus, Collateral Registry and a Unique Identification System. While the Central Bank of Nigeria and the financial institutions are working to put these in place, with a view to de-risking lending to MSMEs, it is important for Small Business Owners to know where the candidates stand on these critical issues, and whether they are inclined to stay the course and work towards seeing them to fruition.
Between access to finance and capacity-building, it is hard to say which one comes first; just like the chicken and egg puzzle. A casual conversation with some Small Business Owners will easily reveal that if you give them money to start a business, it will be a matter of time for you to realise their situation: A fool and his/her money that will be parted in a matter of time. The truth is that many Small Business Owners, or those who aspire to be, do not have the expertise or absorptive capacity to put credit into productive use.
Furthermore, entrepreneurial capacity remains a great challenge for small and medium businesses in Nigeria. The ability to function optimally in the key strategic areas of management, operations, marketing and finance is sadly lacking in many would-be entrepreneurs.
The good news is that we are beginning to find private and public sector-driven initiatives for business start-ups. Examples include the Enterprise Development Centre (EDC) of the Pan-Atlantic University which provides advisory, mentoring, networking and related support services for budding entrepreneurs; the Fate Foundation which runs boot-camps and short-term certificate courses for its aspiring, emerging and special entrepreneurs; and the Lagos State Employment Trust Fund (LSETF) which offers training to improve the operational, managerial and financial competence of trainees seeking to start new businesses.
Next to credit and capacity-building is the challenge of access to markets. It is vitally important to bring Small Business Owners and big companies together, to enable them start relationships and create buying opportunities for their products and services. Small businesses need assistance to key into the value chain of large organisations, to enhance their capabilities to develop local content and participate in diverse sectors of the national economy.
Finally, because markets are structured around government regulations and policy influences, and businesses must match their operations with the intentions of government, Small Business Owners cannot be aloof to the mind-set of persons who seek their consent to get elected into public offices.
Small business Owners bear the responsibility to know the candidates to root for.
What is his or her framework for managing the economy? Does he or she believe that government must be hands-on on the economy (and business) or that the economy should be in the hands of the private sector, with the role of government being limited to providing the regulatory and enabling environment? What is his or her vision for small business?
Yes. Small business is an election issue. You, as a Small Business Owner, cannot afford to be an innocent bystander. You are a stakeholder in the Nigerian experiment. You must seek to understand what each candidate stands for, and know whether he or she promotes policies and programmes that will help your business to survive or thrive. Or, holds a worldview that will make your business to wither and die.
The choice is yours. Choose wisely!