We fully endorse current efforts to move the economy out of recession and onto the path of steady growth through the development of small and medium enterprises (SMEs). One of such moves culminated in the micro, small and medium enterprises (MSME) clinics currently on-going in the country. The first leg, which held in Aba, Abia State, was presided over by the Acting President, Prof. Yemi Osinbajo. It focused on how to help cottage industries play a more significant role in the effort to get the country’s economy out of recession.
Part of the plan involves collaboration between the Standards Organisation of Nigeria (SON) and the Manufacturers Association of Nigeria (MAN) on development of SMEs. All over the world, SMEs are known to be the engine room of real and lasting economic development. The targeting of those at the bottom of the SMEs rung is particularly significant because they constitute the overwhelming majority of players in the industrial sector.
Giving details of the partnership, Mr. Aboloma Osita, the Director General of SON, said it would include renegotiating the terms of existing MoUs to meet the current economic realities, the review of existing rates to accommodate more SMEs and the setting up of a technical committee to facilitate the implementation of the new thinking.
We must, however, sound a note of caution here. What to do has hardly been the problem in this country. It is rather the political will and discipline to see things through that have often been lacking. The fact that we are doing this today suggests that this may just be another jerk-knee reaction to the perilous state of the economy. Hence, if we recover, we go back to our sleeping mode again, until the next crisis comes. This should not be.
We should learn from the positive and abiding examples of other countries that have attained successful and sustainable economic development. As we noted earlier, the development of strong SMEs was key to all of them.
Now, as a first step under the new collaboration, the SON and the MAN are to review their processes to favour SMEs. The aim is not to water down the overall standards of goods and services in the country, but to work with operators in that segment to ensure a better understanding of the regulatory environment and how best to ensure compliance in the light of present economic realities.
One sore area that has been identified, for instance, is the rather tedious and cumbersome registration processes which prospective SMEs presently have to undergo with the apex regulatory agency for foods and drugs, the National Agency for Food and Drug Administration and Control (NAFDAC).
It has been generally agreed that this must now be reviewed downwards to give a chance to more SMEs to operate. Those who have been involved know how difficult it is now to get NAFDAC certification. Many of those who want it do not have enough education on the processes required; neither do they have the needed support to undertake those processes. This is very important as a lot of time and resources are lost through ignorance of the requirements. At a time the country is trying to grow its non-oil exports, it is a well-known fact that many of our small holders and would-be exporters can hardly obtain the required international certifications.
For example, Nigeria has not been able to take full advantage of the window opened under the African Growth and Opportunities Act (AGOA) which came on stream during the Bill Clinton administration in the United States, to improve the balance of trade figures with disadvantaged countries. Working with SMEs in areas where we have clear comparative advantages all through the production and export value chain would give the country the needed mileage in terms of growing and diversifying the economy.
Smaller and less endowed countries on the continent like Ghana and Malawi have taken better advantage of the opportunities provided by AGOA and the like to grow their GDP and foreign exchange earnings.
Nigeria’s cotton, cassava, yam, palm oil and, in fact, most agricultural and mining products, are in high demand all over the world. But, real value has to be added to them to meet export quality. This is where we have failed consistently and where the new efforts by MAN and SON should now be directed.