MSME: In dire need of support to thrive

In a small street of Ajagun Kusimi in Ijegun, and its environs, in Alimosho Local Government Area of Lagos, studies show shops are easily abandoned by their owners barely one year after commencing businesses.

Some identified micro businesses that have closed shops in this small neighborhood, which is a sub-urb of Lagos, cut across, fashion designing, shoe making, provisions, Internet café, condiments’ shops, printings, dry-cleaning, and drug stores amongst others.

One of the identified shop owners Mrs. Onyeji Nwagbo, whose restaurant shop closed barley one year after she commenced business, told our correspondent that, “lack of funds, incessant increase in commodities and high credit demand from customers, ate deep into her business as was left with nothing to sustain payment for the shop.

According to Nwagbo, her husband who could have assisted in her business also faced the same challenge in his spare parts enterprise, which she said, was also challenged than ever before.

“My husband is into auto parts business; prices of parts have gone up, they import the parts, but now, it is not easy to import anything because of the high rate of dollar. Even if you manage import, people will not buy because of high cost” she explained.

Another MSME Entrepreneur, Mr. Banji Owolabi, who owned a communication Centre with three people under his employment, had to close shop, and sought for greener pastures abroad. He said that low business volume, power challenge and very high operating cost forced him to close shop.

The above, and many their similar scenarios in the country explain the challenges facing the nation’s real sector, driven by Micro, Small and Medium scale Enterprises (MSMEs).

To buttress this, the Manufacturers Association of Nigeria (MAN) echoed that due to foreign exchange problems in the country, 222 Small and medium Scale Enterprises (SMEs) closed shop in 2016, resulting to loss of 180,000 jobs.

The Nigerian business operating environment for the small and medium scale Enterprises (SMEs) has sustained a trend, exterminating startups shortly after their inception. However, in the midst of the challenges, while many MSMEs have closed shops, very few are surviving and blazing the trail.

The success of very few surviving SMEs in Nigeria were celebrated recently in Lagos Nigeria, as 10 successful SMEs had a rare opportunity of sounding the Nigerian Stock Exchange’s (NSE) closing bell for the day.

Surviving SMEs need to be celebrated and further encouraged, hence this highest employer of labour records mere 20 per cent survival rate on annualized basis.

The United Nations Industrial Development Organisation’s (UNIDO) Investment and Technology Promotion Office (ITPO) in Nigeria, in May, called for formulation of effective strategies to halt the speedy rate Small and Medium Enterprises (SMEs) collapse in the country.

Studies, according to the organization, revealed that only 20 per cent of SMEs strive to survive in Nigeria.

Coordinator, Arab Regional Center for Entrepreneurship & Investment Training (ARCEIT) Programme, UNIDO ITPO, Bahrain, Mr. Afif Barhoumi, stressed that in order to arrest the high mortality rate of SMEs, there must be continuous enterprise development and investment promotion in the country.

According to Barhoumi, “Although everybody in Nigeria desires to become an entrepreneur, only 40 per cent of the dreamers get to start, but no more than 20 per cent survive,”

he added that government Ministries, Departments and Agencies needed to entrench enterprise development and investment promotion as a key strategy to end the scourge.

The government, policy angle to SME’s survival in Nigeria was re-echoed by the NIBC10 SME entrepreneurs recently recognized by the Nigerian Stock Exchange in Lagos.

SME operator, the Initiates Plc, listed on the Alternative Securities Exchange (ASeM) segment of the Nigerian Stock Exchange (NSE) told Daily Times of Harrowing experience SMEs face in Nigeria, reason for high collapse rate of the real sector operators.

Managing Director, initiates Plc, Mr. Reuben Ossai, driving a company listed on the NSE ASeM’s segment of emerging companies, revealed to Daily Times that that he and his company have had very challenging experiences operating in the country.

According to him, there were times when it looked like it was all over for his company, due to operational, regulatory, policy and other unforeseen challenges, but common sense and good will persevered.

He said that running SMEs in the country has remained very challenging in all fronts, from funds, to regulation, policies, operating environment, laws, tax rules including multiple taxation and infrastructural challenges amongst other threats.

The challenges he said, starts from the immediate operating community and local government level, who devised all forms of laws , bye laws and tariffs systems to stifle fund from the company,

which also provides most of the infrastructures it requires to be operational as well as offers employment to indigenes of the host community.

From the community and local government level, the SMEs face increasing operational stumbling blocks at the state level that also reels out all forms of licensing, policy, regulation, tax, standards among other inhibiting posers that focus on the revenue of the already suffocated company.

Ossai said that the trend continued at the federal level where most of the issues that played out at the community level, local government and state levels are replayed with a federal touch where compliance is also required or sanctioned without recourse to the number of jobs that would be lost or the impact such closure will have on the overall economy and other SMEs that depend on it for survival.

All, the challenges, including policy summersault, the Initiates Plc’s CEO, help to wisen the entrepreneur with the development of entrepreneurial thick skin which guards against shock and enhances the possibility to overcome more bottlenecks and problems that would lead to failure.

Mr. Ossai said that running successful SME’s thrives not just on good ideas backed with honesty, and transparency, but also entails full disclosure, which will encourage others outside the business vision to buy into the dream of the entrepreneur and support it as a going concern.

According to the initiates boss, developing the culture of ensuring that businesses outlives their founders ,is the beginning of sound entrepreneurial initiative and a move that would engender sustainability of the SMEs.

Managing partners Ciciu Consulting, Chukwuka Muonye, another thrilling story of a successful SME in Nigeria told Daily Times that the focus and strength of his consulting firm which clocked 10 years this year, is hinged on building systems that works, building collaborations and establishing sound relationship with the workforce.

“People matters so much not just in deal making, but in organizations and this justifies the training and retraining that staff are given over time ‘as a continuous measure to build people’s confidence”

Muonye did not just achieve success overnight, he worked for it tirelessly, “There has been challenges which has made it easier for us to meet better with our clients, hence we can now communicate better with them based on our challenging experiences”

Acting head corporate services, Nigerian Stock Exchange (NSE) Pai Gamde told Daily Times that SMEs could exploit the opportunity provided by the NSE Alternative Securities Exchange Market (ASeM), to attain global reckoning.

Lauding successful SME entrepreneurs as example of success story of entrepreneurial initiatives in the country, Gamde said that successful MSMEs, including the NIBC10 companies,

stand as celebration of business success of the SME’s in Nigeria and the possibility and probability of growth in the real sector of the economy driven by the SMEs.

She said honouring that the NIBC10 with awards and privilege opportunity of sounding the Nigerian Stock Exchange closing bell, was aimed at promoting and encouraging Nigerian entrepreneurs and enterprises.

“SMEs drive economic development and Nigerian has over 30 million SMEs which if well harmonized, have the ability to further enhance the nation’s economy” she said.

Meanwhile, while 80 per cent of SMEs are bound to fail, some SMEs that have weathered the survival storms in Nigeria and looking up to global reckoning are, Bestman Games Limited, founded by Nimi Akinkugbe, DBH Solutions Limited founded by Dafydd BayleyHay and Oswald Osaretin Goubadia as well as Everyday supermarkets Limited founded by Charles Dimnwobi.

Others are Healthcare Leadership Academy, founded by Kelechi Ohiri, House of Tarah Internationals founded by Tara Fela-Durotoye, and Iya Foods, founded by Toyin Kolawole.

Also worthy of mention are L’Avyanna Skin naturals, founded by Dr May Ikeora and Massey Street Children Hospital, founded by Lagos State Government