SMEDAN DG proffers solutions to Challenges facing SMEs in Nigeria

By Frank Kintum

The Director-General/Chief Executive Officer, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) Dr Dikko Umaru Radda, has identified major challenges facing small and medium enterprises in Nigeria.

The DG who spoke recently on the theme- ‘Role of Micro, Small and Medium Enterprises in Nigeria’s Economic Development’ at the National Defence College, Abuja, stated that these challenges include Poor access to affordable finance leading to inadequate working capital; lack of workspace; and poor access to both local, regional & international markets leading to poor business turnover.

Other challenges identified by the government official include obsolete technology leading to inability to compete globally; weak infrastructure leading to the high cost of doing business; and absence of patent right and unprotected intellectual property rights.

The DG also stated that low capacity utilization, non-insurance of business risk, non-effective implementation of the National Policy on MSMEs and poor management of business operation due to lack of business management skills are other challenges.

According to him, “administrative barriers in doing business, multiple permits and fees are required at the state and municipal levels, often spontaneously, absence of a general rating scheme and non-availability of qualified artisans (skill gap) are other factors.

In giving some solutions, the DG said value re-orientation – instilling the right attitude; promotion of entrepreneurship education and government intervention – the creation of MSME bank, power sector reform, formulation and implementation of consistent policies etc are key.

He also observed that improved social-economic infrastructure; improved access to critical resources such as information, workspace, finance; economic reforms with emphasis on job creation, enhanced economic opportunities and improved business information dissemination are also very essential.

He also outlined Opportunities/Prospects of MSMEs in Nigeria to include the following growth-inducing parameters:

• Government’s deliberate action in creating enabling business environment through the Presidential Enabling Business Environment Council (PEBEC);
• Utilization of local raw materials.. i.e One Local Govt One Product (OLOP)
• Intervention funds and Conditional Grant Schemes to micro-enterprises
• Large population (vast internal market).
• Enhanced Competitiveness.
• Stable democratic environment.
• Resilience of MSME operators.
• Youth population

Entrepreneurship education