SMEs need hands-on exposure to cut high mortality rate
Nigeria’s micro, small and medium enterprises need hands-on exposure if they are to survive high mortality rate ravaging businesses in the country, an expert says.
SMEs represent about 90 percent of the Nigerian businesses, but 65 percent of them fail within three years of starting, according to research.
“SMEs need good practical exposure before launching into business. This will help reduce their mortality rate,” said Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), at the Youthpreneur Business Summit held recently in Lagos.
“The mortality rate of SMEs is very high because most of them go into business without proper knowledge. They need mentorships and trainings to sustain the business. It is much easier to start a business than to sustain it,” Yusuf said.
He said the current challenges businesses face in the economy affect some sectors more than others and urge SMEs to focus on sectors with fewer challenges.
“If you are in a sector that is energy-intensive, then the mortality rate will be very high because energy cost is very high. Electricity, gas and diesel costs are very high,” he advised.
He urged entrepreneurs and small business owners to concentrate on selling their products in the local market because the risks in the export market are high while opportunities abound in the counry.
According to him, governments at all levels should empower SMEs to satisfy local demand, which in turn will reduce the country’s importation bill.
Also speaking at the summit, Tunde Dauda, head, skills acquisition unit, Lagos Ministry of Wealth Creation and Employment, representing the commissioner, said Lagos State government is doing a lotto support entrepreneurs by ensuring that their businesses grow from infant level to maturity.
“The government of Lagos State believes so much in the energy and abilities of the youth and is ensuring to make better use of this potential.
The state has created centres to help grow enterprises from infant level to maturity,” he said.
Abimbola Oligbinde, convener, Youthpreneur Business Summit, stated that the current economic situation attests to the fact that the country is not sustainable as a monoproduct economy.
“We need to build industries that would offer competitive products that will liberate us from our un-repentant thirst for imported products,” Oligbinde said.
“Many young Nigerians are beginning to embrace entrepreneurship and our mission is to accelerate the impact of these young entrepreneurs by uniting them with essential partners in a collaborative pursuit of learning, leverage and funding,” she added.
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