Registration racketeering caused 80% MSMEs not to be registered–Survey
Just as the Director General of Corporate Affairs Commission (CAC), Mr. Bello Mamud has said over 80 per cent of SMEs doing business in Nigeria are not registered, another independent survey has indicted the agency as creating a scenario that encourages touting and racketeering rings in the process of registering companies.
The survey by an Abuja based NGO said “It is as hard as trekking from Port Harcourt to Nguru Namoda for any business operator to walk into the office of the CAC and get his firm registered and this has forced many of the SMEs to fall into the hands of touts in processing their registration documentation.
“Today, CAC office in Abuja can be likened to a law Court as many lawyers who cannot make a living in handling court cases are now CAC agents in registering firms and thereby bleeding prospective new SMEs operators.
According to the report, “The situation is made worst for new companies as many of the staff of CAC also operate rings of registration channels, thereby frustrating anybody wishing not to patronize the cabal.
The report also agreed that the Registrar-General/Chief Executive Officer, CAC, Mr. Bello Mamud, may not be aware of the close involvements of his staff in the racketeering jobs which has been the bane of startups.
Reports say out of a total of 37 million Micro Small and Medium Enterprises in the country, about five million, representing 13.51 per cent, are registered, the Corporate Affairs Commission has said.
This indicates that 86.49 per cent of the MSMEs currently in operation are not registered with the CAC.
The Small and Medium Enterprises Development Agency of Nigeria, in a survey it carried out in 2013, had put the number of the MSMEs in the country then at 37,067,416, comprising 36,994,578 micro enterprises; 68,168 small businesses; and 4,670 medium-sized businesses.
Mamud said, “SMEDAN said it had about 37 million MSMEs on its register and I say that out of all the MSMEs, we have less than five million registered with the commission. Where are the rest? It means that the rest are unregistered.”
To ensure that the small businesses were formalised, he said that filling fees at the commission had been reduced by 50 per cent for those between N1m and N5m; while those above N5m were reduced by 25 per cent.
He explained that the commission was partnering the Ministry of Industry, Trade and Investment to further reduce the fees and other costs of doing business in the country.
“We are partnering them by reducing the filing fees and we are thinking of reducing it further. We are talking to the minister of trade and investment so that we can reduce the fees further. That will reduce the cost of doing business for them. We have a desk for them in all our offices,” Mamud said.
In the World Bank’s 2016 Ease of Doing Business, Nigeria occupied 169th position, out of 189 economies, with its starting business index ranked at 139th position.
In Europe, statistics show that in a number of years, annual EU SME report presents good news as there are positive signs of a turn-around for Europe´s SMEs.
A new report said a sizeable minority of SMEs has already expanded their businesses and workforces and it is particularly encouraging to note that many of these are young firms.
The report also states that there is no reason for complacency. Many more SMEs need to join the club of job creators. In terms of policy, this means that Member States and the European Commission need to continue their efforts to create the best possible policy environment. This requires a comprehensive approach, with SMEs at the centre. A priority strongly endorsed by the European Commission under the mandate of President Juncker.
Ms. Elżbieta Bieńkowska, Member of the Commission for the Internal Market, Industry, Entrepreneurship and SMEs and EU SME said “This report provides an overview of the past and forecasted performance of SMEs from 2008 to 2016, and reviews in greater detail the contribution of SMEs to employment creation”.
“SMEs accounted for 71.4% of the increase in employment in 2014 in the non-financial business sector, which includes all sectors of the economy except for ‘financial services’, ‘government services’, ‘education’, ‘health’, ‘arts and culture’, ‘agriculture, forestry and fishing’. SMEs are a highly diverse population of enterprises, and are present in every nook and cranny of the economy, with activities ranging from the production of artisan food to the production of high tech space exploration equipment, from retail services to the provision of highly specialised professional services, from focusing primarily on serving domestic customers to focusing mainly on the export markets.
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“In short, SMEs are ubiquitous, and in 2014 accounted for 99.8% of all enterprises in the non-financial business sector in the EU28. For every km2 of land surface the EU has an average of 5 SMEs. Moreover, in 2014 SMEs employed almost 90 million people – 67% of total employment, and generated 58% of the sector’s value added.
“Almost all SMEs (93%) are micro SMEs employing less than 10 people. About three quarters of SMEs are active in the five key sectors: ‘wholesale and retail trade’, ‘manufacturing’, ‘construction’, ‘business services’ and ‘accommodation and food services’.