Transcript SMEDAN: SERVICES AND POLICIES FOR SUPPORTING MSMEs IN NIGERIA A Paper Delivered By MUHAMMAD NADADA UMAR DIRECTOR GENERAL/CEO SMALL AND MEDIUM ENTERPRISES DEVELOPMENT AGENCY OF NIGERIA (SMEDAN) 17th.

SMEDAN: SERVICES AND
POLICIES FOR SUPPORTING
MSMEs IN NIGERIA
A Paper Delivered By
MUHAMMAD NADADA UMAR
DIRECTOR GENERAL/CEO
SMALL AND MEDIUM ENTERPRISES DEVELOPMENT AGENCY OF NIGERIA
(SMEDAN)
17th JUNE, 2010
OUTLINE OF PRESENTATION
Introduction
MSMEs: Their Relevance
Challenges Facing MSMEs
Overcoming the Challenges
Opportunities
The Role of Government
Available Services for MSME
Development
SMEDAN MSME Development Cycle
National MSME Policy thrust
Way Forward
Conclusion
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INTRODUCTION
Micro, small and medium enterprises
(MSMEs) are the bedrock of development
of any economy.
Statistically, MSMEs constitute more than
75% of all enterprises in Nigeria.
This is mainly due to ease in terms of set
up capital and human resource required to
establish an MSME.
These reasons together make, MSMEs a
veritable
group
for
socio-economic
development of any serious nation.
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INTRODUCTION
Cont’d
The ability of MSMEs to quickly adapt to
changing circumstances, along with their
potential to innovate, have given them a
critical edge in the market place.
The growth of the MSME sub-sector of
the economy is critical to the nations
economic recovery, growth and the
attainment of ‘the much talked about’
vision of becoming one of the twenty
largest economies by year 2020
MSMEs: Their Relevance
In accordance with the National Policy on
MSMEs, micro, small and medium
enterprisesEmployees
are classifiedAssets
as follows:
Category
(N’m) Excluding Land
and Building
Micro
Less than 10
Less than 5m
Small
10-49
5m-Less than 50m
Medium
50-199
50m-Less than 500m
NB: Where there is an inconsistency between employment and asset base, employment
criterion will prevail.
SOURCE: National Policy on MSMEs
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MSMEs: Their Relevance Cont’d




The relevance of MSMEs has been
recognized the world over. These
include among others:
Employment generation
Supply of potential
entrepreneurs
Ensuring sound competition
Mobilization of local
resources
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MSMEs: Their Relevance
Cont’d
 Creation of new industries
 Mitigation of rural-urban migration
 Income generation and poverty
alleviation
 Enabling adaptive technology and skill
acquisition
 Production of intermediate products
for uses by large enterprises.
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CHALLENGES FACING MSMES IN
NIGERIA
MSMEs in Nigeria are confronted
with very unfavorable business
environment.
Certain
peculiar
challenges have continued to militate
against their optimal performance.
Some of the external challenges
include:
- Poor state of infrastructure
- Weak access to production inputs
especially finance
- Corruption.
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CHALLENGES
CONT’D
Lack of trust by Nigerians in Nigerians
- Multiplicity of Taxes and levies
plus red tapism.
- Poor access to appropriate and
affordable workspace
- Low access to information.
- Low synergy between various tiers
of government.
- Inappropriate/crude technology
- Dearth
of
business
information/databank
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CHALLENGES
CONT’D
Individual/internal factors also
contribute to the problems of MSMEs.
Such factors among others include:
- Aversion to joint ownership
- Family ties, i.e. bringing family into
business
- Financial mismanagement
- Lack of basic business capacity
(knowledge, skills & attitude)
- Non-recruitment of qualified
personnel
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CHALLENGES
CONT’D
Lack of perseverance and staying power
when the business is going through
tough times.
- Poor record keeping especially
accounting books
- Lack of standardization of products
- Being the all-in-all, i.e. managing
director, accountant, cashier, admin.
Manager, etc
- Low capacity to invest in R&D, ICT &
E- commerce
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OVERCOMING THE CHALLENGES
Value re-orientation – instilling the
right attitude
Promotion
of
entrepreneurship
education
Promotion of well being (confidence &
enthusiasm for work and learning)
Improved
social-economic
infrastructure
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OVERCOMING THE CHALLENGES
Cont’d
Improved access to productive
resources such as information,
workspace, finance etc.
Economic reforms with emphasis on
job creation, enhanced economic
opportunities and access to them.
Establishment of SMEDAN
Improved funding windows (ie BOI,
NERFUND, MFIs, NACRDB, etc.
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OPPORTUNITIES
Resource Endowments
Population (vast internal market)
Stable Democratic Environment
Resilience
Deepening Supportive Economic
Reforms
Increased Awareness
Improving Human Capital
Improved Technology
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The Role of Government
In recognition of the need to establish
MSMEs as the driving force for economic
growth, government instituted the following
programmes to address key challenges
plaguing the sector:
–
–
–
–
–
–
Setting up of the Bank of Industry (BOI)
National Economic Reconstruction Fund (NERFUND)
NACRDB
NAPEP
NDE
Enabling environment for the establishment
Microfinance banks
– SMEDAN
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The Role of Government Cont’d
SMEDAN
was
particularly
established to facilitate the
growth
and
development
of
MSMEs.
In doing this the Agency leverages
on the competences of other
stakeholders both in the private
and public sectors of the economy.
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Available Services for
MSMEs Development
The Agency is mandated to among
other things; champion
the
emergence of a structured and
efficient MSME sub-sector.
Specifically, the Agency provides
the following:
1.
2.
3.
Information provision and awareness
creation/business sensitization.
Business
Development
Service
embracing training,
counseling
mentoring.
Entrepreneurship Training
(BDS),
and
Available Services…..
4.
5.
6.
7.
Cont’d
Training of Trainers
Counseling
Mentoring
Establishment of Credible Database for
MSMEs in Nigeria.
8. Promotion of networking/cluster
formation.
Available Services…… Cont’d
9. Advocacy and improvement in operating
environment, usually in partnership with
others (private-public, public-public).
10. Promotion of linkages and access of
MSMEs to vital resources, especially
finance and workspace.
11.Establishment of Sub-contracting and
Partnership Exchange (SPX) in conjunction
with UNIDO.
12.Policy formulation
SMEDAN’S MSME DEVELOPMENT
CYCLE
7. Planning for
additional
Interventions
based on M&E
report
1. Sensitization
6. Monitoring
and
Evaluation
5. Start-up
2. Needs
Assessment
4. Facilitation
(access to
critical
resources eg
finance,
workspace,
3. Training
(vocational/e
ntrepreneurshi
p)
etc)
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National MSME Policy Thrust for
MSME Development
SMEDAN in collaboration with UNDP formulated
the first ever National Policy on MSMEs in 2007.
The Policy identifies the following priority areas
for development:
–
–
–
–
–
–
–
–
–
–
–
Micro food processing
Cottage Arts and crafts
Textiles and clothing
Wood processing and furniture
Leather and leather products
Basic metal, metal fabrication and engineering enterprises
Solid mineral enterprises
Electronic and Information Technology services
Building and construction enterprises
Oil and gas
Entertainment
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National MSME Policy Thrust for
MSME Development
Cont’d
As a vehicle for implementation of the
policy, a National Consultative
Committee drives implementation of
the policy at the national level (with
the Agency as the secretariat)
While State Consultative committees
are established at state-level to for
implementation of the key principles
of the policy
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WAY FORWARD
Renewed commitment by all tiers of
government to drive the overall
development of the MSMEs sub-sector
in Nigeria.
Establishment of the National Credit
Guarantee Scheme for MSMEs to
create an effective access to finance
for MSMEs.
Re-equip and strengthen SMEDAN for
enhanced operational performance.
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WAY FORWARD
Cont’d
Pump more funds into infrastructure
development through PPP and ensure
value for money.
Continue the onslaught on corruption
Deepening and broadening the activities
Business Development Services (BDS).
Provision of workspaces and common
facility centres.
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WAY FORWARD
Cont’d
More Advocacy
Establishment of SMEDEF
Establishment of MSME Bank
Repatriation of Diaspora Funds to
finance MSMEs.
Review of operational Guidelines of
MFIs.
Provision of Take off Grants to MFIs.
CONCLUSION
In conclusion, there is significant
evidence to show that lack of appropriate
intellectual
property
protection
framework (in terms of laws and
enforcement
mechanisms)
stunts
creativity and innovation.
And for those that are bold enough to go
ahead with their ideas and make them a
reality, they are denied the benefits
accruing from their innovation and
creativity.
The growth of MSMEs on one hand and
the economy in particular bears the
brunt of such weak regulatory regime.
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Conclusion Cont’d
For the nation to be among the 20
most economically advanced in the
world by the year 2020, more
attention must be paid to the
development of MSMEs.
SMEDAN will continue to support the
innovation and creativity in the
development of the MSME sub-sector
for sustainable economic growth
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THANK YOU FOR
LISTENING
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