The Bank of Industry (BoI) has traced the current economic recession to weak Small and Medium Enterprises (SMEs), saying the surest way out of the mess will be early empowerment and support for the sub sector.
This is the background for the recent earmarking of N300 billion for the development of the sector over the next three years by the bank.
The bank aims to make funds accessible for entrepreneurs to start up and expand their businesses in the country.
In an interview, the acting Managing Director, Waheed Olagunju explained that the Development Finance Institution (DFI) had so far disbursed about N15 billion to SMEs, creating about 600,000 jobs in the country.
He said most economies of the world have been able to transform their economies by paying serious attention to SME growth.
Olagunju further noted that the Nigerian economy has underperformed over the past years due to the weak SME sector while urging entrepreneurs to take advantage of investment opportunities in the nation’s power, construction and other sectors begging for investment.
BoI also commended the federal government policies instructing that certain percentages of government purchases must come from patronizing SMEs in the country, saying this would bring some increased level of relevance to the sector.
He added that “We are going to help in building capacity for those SMEs to ensure that they are competitive in terms of quality and in terms of price. Our products have to be competitive and of the right quality”.
However, he was quick to reveal that the sector is still faced with myriad of challenges ranging from market access, weak local patronage of made-in-Nigeria goods, power supply, finance, information and lack of technology as a result of over-dependence on expensive sophisticated imported technology.
“What is clear is that we need to industrialise Nigeria aggressively, because industrialisation is what makes the difference between the rich and poor countries of the world. It is not by accident that the rich countries are referred to as industrialised countries. Industrialisation is talking about value addition, processing is where the high quality of life comes in.
According to a report he attributed to Oxfam, the industrialised countries of the northern hemisphere bought cocoa worth a billion dollars from Nigeria, Ivory Coast, Cameroun and Ghana, investing another $3 billion on value addition and generated businesses worth about $60 billion.
In other words, they gained $56 billion by investing $4 billion. That period, the per capita income of cocoa producing countries was less than a $1000 where as in those processing countries, their per capita income was in double digits up to about $20,000 and this is why their standard of living are much higher in industrialised countries. For exporting primary products without value addition, we have been exporting jobs to these countries and exporting prosperity, importing unemployment to Nigeria and this is why we have the paradox of prosperity and poverty.
