FG, MSMEs And The Economy

In the twilight of the last administration the federal government launched the Micro, Small and Medium Enterprises (MSMEs) project. The N39.6billion project is meant to fund business development services to enhance the efficiency and productivity of the MSMEs. The project, tagged the Nigerian Business Development Services Network (NBDS), is supposed to be an establishment comprising private sector business development services providers, whose main objective is to mentor, provide support services and link up with financial institutions. According to its architects, it is an attempt to re-position the MSME sector for better productivity.

Before then, the federal government had in August 2013 launched a N220billion Micro, Small and Medium Enterprises Development Fund (MSMEDF), which objective was to provide long-term, affordable funds for players in the sector. This particular fund laid claim to 60 per cent consideration for women, but how many women and how much of this fund has been accessed at all may give a different story.
However, we laud the initiative, because it at least acknowledges that beyond the financial challenge a good number of MSMEs face, the lack of proper articulation of entrepreneurial ideas and conceptions poses an equally serious challenge for the sector. MSMEs are agreeably the bedrock of any economy, no matter the sector they are situated in. In California for example, Silicon Valley is an amalgamation of small businesses in the IT sector. China’s growth is very much tied to the large network of its small enterprises and entrepreneurs. Going back in history, the industrial revolution, which birthed modern-day capitalism, started off from cottage industries. The difference between these examples and us lies in the role of government in their growth and development. Their environment is innovation and business-friendly due to uninhibited government support of research and development, and the provision of infrastructure. MSMEs in Nigeria are faced with the challenge of lack of functional infrastructure, which creates an additional burden on costs of production. There is also the lack of support for research and development.
We urge the government of the day to not only build on this initiative, but to ensure that the resources can easily be accessed by those who really need them. It is in light of this that we recommend that the government reviews the process of access to cut out as much red tape as possible, bearing in mind that a large number of MSME operators need these resources to survive. A large number of MSMEs fail in their quest for funds and capacity, because the laws and regulations of those agencies given the responsibility of disbursing such simply create more barriers than necessary. This is where the Small and Medium Enterprise Development Agency (SMEDAN) may have to do more than it is presently, although the agency does need funds to better fulfil its mandate.
Source:Leadership