As the President Muhammadu Buhari’s administration continues to make frantic efforts towards ensuring that Nigeria’s exporters and small businesses secure good grounds to compete favourably in the global market, business analyst and Chairman, NACCIMA Export Group, Kola Awe, examines, among other things, the ease of doing business and the Export Expansion Grant which has been a focal point of the present government.
In this interview, Awe also addresses issues in Nigeria’s export trade as well as the Small and Medium Scale enterprises. Excerpts:
Assessment of SMEs:
To be candid, SMEs are facing a lot of challenges, especially the manufacturing sector. For instance, the infrastructural deficiency, specifically the energy/power supply is a problem to budding entrepreneurs. Most of them cannot run their generating machine for more than eight hours because of they do, they won’t survive the cost and this is a threat to starts up, the power failure in Nigeria is a major cause why most SMEs wind up within the first five years, and this affect our GDP adversely.
It’s only the banking sector that is striving to survive, but considering the number of manpower it employ, it has very little to add to our GDP. So, more attention should be given to Industries, agriculture and export. Access to finance is a another challenge. Nigeria has the highest interest rate of about 25-27 percent from the commercial banks. However, the federal government is solving this through some initiatives like the Ten million loan given to SMEs at single digit percent through the CBN to support SMEs among others. From the SMEs side, most of them find it difficult to put up a proper books of account, and it’s just a few them who have excellent books of account have access to these loans. Also, Poor management structure is a serious issue that hinders them from accessing these government support. Howbeit, even those who have access to the loans get hit back due to poor facilities like power failure which makes them unable to refund the loans.
We are embarking on capacity building for exporters across the country. This is very imperative because they need to understand the industry very well. This is taking place through seminars, workshops, symposium, etc, and we are making it a form of mentorship to build them to stand competitively so that they can be able to mentor and build exporters coming thereafter. More so, we are doing a lot of advocacy for SMEs exporters with different stakeholders to ensure a hitch free business environment by interfacing with critical government agencies. We are also exposing them to trade fairs with their products at the African sub region to meet with other entrepreneurs for networking and technical synergy.
The government must fix the dilapidated ports roads, access to market, less stringent access to finance, data and information and create hitch-free physical business environment.
President Buhari administration has made some policies and initiatives to facilitate non-oil exportation as a way of reviving the economy. for instance, the Economic and Recovery Growth Plan (ERGP), was initiated to stimulate the non-oil export, create jobs and disencumber Nigeria from the shackles of extreme poverty.
Also the suspension of the Export Expansion Grant has been lifted to support Nigeria’s exporters and to boost non-oil products, this has increased the growth in the manufacturing sector as the largest beneficiaries of the grants, and the ease of doing business in the country have improved significantly.
More so, the Export Stimulating Fund (ESF), which is an initiative of the Nigerian Export Import Merchant Bank (NEXIM) as a single digit interest rate Fund is made available for non-oil exporters in the country. The Anchor Borrowers Fund (ABF), a move to promote the agricultural sector is aimed to shift farmers from subsistence farming to commercial focus. Other steps taken to revamp the economy are the CBN and local financial aids with the Bank of Industry (BOI), Bank of Agriculture and the Development bank of Nigeria. The development agencies, financial institutions and the CBN are positioned to assist entrepreneurs for exports, all exporters need to do is approach them, meet their requirements and have access to the financial aids and other technical support.
Also, the Federal government through Nigeria Export Promotion Council (NEPC), has restructured its Export Development Fund which is a pre-shipment incentive aimed at assisting exporters in areas of market intelligence, survey, research and development, Trade Fairs among others, exporters are just expected to key into the vision and enjoy the benefits.
Home made products:
The reasons are not far-fetched. It is due to poor packaging and inability to meet up with international standards when compared vis-a-vis other products in the international market.
Because of this, the NACCIMA Export Group has come up with what it called ‘Export Solution Service Centre’ to be established in all states of the federation. Besides, we are embarking on training and retraining for all non-oil exporters in the country, and it kicks off from January.
We are working harmoniously with other personnel from Nigeria Customs Service, NEXIM bank, Nigeria Export Promotion Council (NEPC), Nigeria Immigration Service among others, who are armed with requisite know-how to provide support solutions to exporters in other to ensure that exporters do not suffer undue pains in their export business.
Exporters must improve in quality in other to stand competitively in the international market. As for us, we reaffirm our commitment to lift every unwarranted bottleneck to exportation, and we are leaving no stone unturned to see that exportation soars greater than importation.
Well, amongst the myriads of challenges, the Tin Can/Apapa road is a clog in the wheel of Nigeria’s business progress. We need the government to expedite action to ensure that importers and exporters do not lose more billions of Naira due to poor access road to the ports. Also the government should create that single Window Desk for exports as they did for Importation which is been managed by the Nigeria Customs, this will go a Long way to save cost, reduce unnecessary hitches in documentation processes and improve efficiency. With all these on ground, exporters should expect a new face of export because we are ready to give the sector more than a face lift.
Source: The Sun