Sections
Poll: Ministry of Niger Delta
Do you support the recently-established ministry of Niger Delta?
In search of legislative solution for SME problems
Font size:
In the European Union, SMEs constitute over 90 per cent of all enterprises and employ about 65 million people. In OECD countries, they account for over 95 per cent of all the enterprises with an employment generating capacity estimated at over 60 per cent. When compared with the Large Scale Enterprises (LSEs) in Africa, SMEs constitute over 60 per cent of the continent's total workforce but less than 30 per cent of industrial output."
Even with the imperfections and contradictions that characterise Nigeria's business environment, Ebong noted that " SMEs account for over 65 per cent of the total employment and about 60 per cent of the industrial output and provide a means of livelihood for over 90 million people out of the country's population of 140 million. According to him, " SMEs also play a critical role in stimulating the development and growth of indigenous entrepreneurship and technology because they serve as credible vehicles for the propagation and diffusion of innovative ideas.
In addition to their overall impact on the labour market, Small and Medium Scale Enterprises constitute a veritable platform for providing affordable manpower as they are known to rely mostly on local raw materials. While most LSEs import their raw materials in drums and tonnes, SMEs strive to develop their raw materials locally and help the industries that produce those raw materials.
Though SMEs are drivers of economic growth, they face a number of challenges which undermine their potentials and contributions to economic development. These challenges are pooled in the operative phrase known as "harsh operating environment."
Unfavourable business environment manifest as bad roads, poor water and energy supplies, unpredictable government policies and lack of easy access to bank loans. According to the Central Bank of Nigeria (CBN) latest report on access to micro- financing, only 35 per cent of the nation's population have access to banks' fund while 65 per cent are excluded.
Given the huge potentials of SMEs , successive governments in Nigeria have established relevant agencies and institutions such as the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Nigeria Agricultural Co-operative and Rural Development Bank (NACRB), Nigerian Bank for Commerce and Industry, (NBCI), National Economic Reconstruction Fund (NERFUND), Bank of Industry (BOI) among others, as part of efforts to address the many problems facing this important sector .While these institutions have made, and continue to make genuine attempts to address the various challenges facing SMEs and help them realise their potentials, some of these problems still persist despite the spirited efforts from stakeholders.
It is against this background that the Nigerian Association of Small and Medium Enterprises (NASME), the apex private-sector- led organization that fosters the promotion of Micro, Small and Medium Enterprises (MSMEs) in Nigeria, recently submitted a policy proposal to the Senate on how to strengthen the MSME sector .in Nigeria through legislative action. Specifically, NASME , in its eight point proposal, is seeking reprieve from the Senate in the following key areas:
• Legislation setting up a Standing Committee or Standing Committee on MSME issues in the Senate and House of Representatives.
• Legislation for the establishment of an SME bank in Nigeria
• An enabling law that would support 25 per cent government procurement to be outsourced to Nigerian SMEs as is obtainable in the United States of America where 23 per cent of government procurement is usually outsourced to SMEs.
• Legislation that would reduce tax rate for SMEs.
• Legislation for the establishment of entrepreneurship department in all the higher institutions in Nigeria.
• Advocacy towards reduction in lending rate to SMEs
• Legislation stopping the optionalisation of Small and Medium Enterprises Equity Investment Scheme(SMEEIS) and
• Legislation for the establishment of a National Credit Guarantee Scheme.
Apparently moved by the plight of SMEs in Nigeria, Senate President, David Mark, has pledged the support of lawmakers in enacting relevant laws that would fast-track the growth and development of the sector regarded by experts as a catalyst for industrial and economic development. "The Senate has a significant role to play in the development of the Micro, Small and Medium Enterprises in particular and the Nigerian economy in general," the Senate President said. As part of its contribution towards the growth and development of SMEs in Nigeria , he promised the Senate would lend its support for the granting of tax relief for SMEs in addition to facilitating the setting up of a better Credit Guarantee Scheme for entrepreneurs. While analysts view the NASME- Senate new strategic partnership as a positive development that is capable of changing the blighted fortunes of SMEs, the rapidity and sincerity with which the Senate tackles these problems will determine whether or not respite is really in sight for the beleaguered SME sector.
Even with the imperfections and contradictions that characterise Nigeria's business environment, Ebong noted that " SMEs account for over 65 per cent of the total employment and about 60 per cent of the industrial output and provide a means of livelihood for over 90 million people out of the country's population of 140 million. According to him, " SMEs also play a critical role in stimulating the development and growth of indigenous entrepreneurship and technology because they serve as credible vehicles for the propagation and diffusion of innovative ideas.
In addition to their overall impact on the labour market, Small and Medium Scale Enterprises constitute a veritable platform for providing affordable manpower as they are known to rely mostly on local raw materials. While most LSEs import their raw materials in drums and tonnes, SMEs strive to develop their raw materials locally and help the industries that produce those raw materials.
Though SMEs are drivers of economic growth, they face a number of challenges which undermine their potentials and contributions to economic development. These challenges are pooled in the operative phrase known as "harsh operating environment."
Unfavourable business environment manifest as bad roads, poor water and energy supplies, unpredictable government policies and lack of easy access to bank loans. According to the Central Bank of Nigeria (CBN) latest report on access to micro- financing, only 35 per cent of the nation's population have access to banks' fund while 65 per cent are excluded.
Given the huge potentials of SMEs , successive governments in Nigeria have established relevant agencies and institutions such as the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Nigeria Agricultural Co-operative and Rural Development Bank (NACRB), Nigerian Bank for Commerce and Industry, (NBCI), National Economic Reconstruction Fund (NERFUND), Bank of Industry (BOI) among others, as part of efforts to address the many problems facing this important sector .While these institutions have made, and continue to make genuine attempts to address the various challenges facing SMEs and help them realise their potentials, some of these problems still persist despite the spirited efforts from stakeholders.
It is against this background that the Nigerian Association of Small and Medium Enterprises (NASME), the apex private-sector- led organization that fosters the promotion of Micro, Small and Medium Enterprises (MSMEs) in Nigeria, recently submitted a policy proposal to the Senate on how to strengthen the MSME sector .in Nigeria through legislative action. Specifically, NASME , in its eight point proposal, is seeking reprieve from the Senate in the following key areas:
• Legislation setting up a Standing Committee or Standing Committee on MSME issues in the Senate and House of Representatives.
• Legislation for the establishment of an SME bank in Nigeria
• An enabling law that would support 25 per cent government procurement to be outsourced to Nigerian SMEs as is obtainable in the United States of America where 23 per cent of government procurement is usually outsourced to SMEs.
• Legislation that would reduce tax rate for SMEs.
• Legislation for the establishment of entrepreneurship department in all the higher institutions in Nigeria.
• Advocacy towards reduction in lending rate to SMEs
• Legislation stopping the optionalisation of Small and Medium Enterprises Equity Investment Scheme(SMEEIS) and
• Legislation for the establishment of a National Credit Guarantee Scheme.
Apparently moved by the plight of SMEs in Nigeria, Senate President, David Mark, has pledged the support of lawmakers in enacting relevant laws that would fast-track the growth and development of the sector regarded by experts as a catalyst for industrial and economic development. "The Senate has a significant role to play in the development of the Micro, Small and Medium Enterprises in particular and the Nigerian economy in general," the Senate President said. As part of its contribution towards the growth and development of SMEs in Nigeria , he promised the Senate would lend its support for the granting of tax relief for SMEs in addition to facilitating the setting up of a better Credit Guarantee Scheme for entrepreneurs. While analysts view the NASME- Senate new strategic partnership as a positive development that is capable of changing the blighted fortunes of SMEs, the rapidity and sincerity with which the Senate tackles these problems will determine whether or not respite is really in sight for the beleaguered SME sector.
Add to:
del.icio.us |
Digg
del.icio.us |
Digg
Email to a friend
Print version
Plain text
Comments ( posted):
Post your comment