The recession dropped on us like cluster bombs, producing horrendous multiple effects that have impoverished many Nigerians in an unprecedented scale. So, it was welcome news, when in a terse announcement scrolled on Television screens, the National Bureau of Statistics, NBS said the nation is out of recession. My immediate reaction was: Amen!
Government officials have urged cautious optimism, warning that the much expected rebound of the economy is going to be gradual. For me, I always want to canvass the view that to bring our collective desire for economy recovery to fruition, individuals must be more productive in whatever they are doing. Lasting wealth can only be created and sustained through productivity on a large, universal scale across the nation.
If we are to achieve that, we must focus on Small and Medium Enterprises, SMEs, and the cottage industry segment. It is erroneous to think that unless you open a shop, rent a large office space or rent a big factory, you’re not in business. Many spend their little capital on rent, office decoration or fixtures when their business does not require it.
Let me put things in perspective. A cottage industry is a business you can do from home. In our traditional society, weaving by hand looms is a popular cottage industry, as pottery, carving, production of mat, broom, tye and dye clothing, bead making, etc. New businesses can start from the home to save cost of operation.
Confectionery is a booming business in the urban centers. You can start this business from your home. You can bake your cake, fry your doughnut, chin chin, and other small chops at home, package them well and sell at your target markets. There’s always space in your garage, back of the house or somewhere in the compound to do your chores. The cottage industry is the way to go if you want to get out of the unemployment trap and earn a decent living for yourself. Many large eateries with branch networks actually started as small one – man catering business from homes.
Thank God for internet technology, there’re scores of new businesses you can do on – line today, that do not require renting an office space.
In today’s economic environment with all the challenges of being governed by a corrupt political elite, Nigerian youths must seek ingenious, but legitimate ways to do small business in order to climb out of poverty. Starting your own business from home is the easiest way to start. You don’t have to wait for government’s help. It’s fine if they do help. Other available sources of business financing like the micro – finance banks and the Bank of Industry (BOI), should encourage cottage industry operators.
Generally, our bank lending policies disenfranchises the cottage industry, a large portion of those who really need funding for their business. The widow who sellers grilled fish in front of her home; a local bean cake (Akara) or moi moi and other food seller who make brisk business in street corners or front of their homes, cannot benefits from the conventional bank loan structure, going by the preconditions given to lenders by many banks. There’s an urgent need to address this policy because it is non – inclusive.
The BoI itself should broaden its medium of communication and marketing, to include advertisements, and street carnival in major Nigerian languages of Ibo, Hausa and Yoruba. The process of accessing its loans should be by traders and those involved in startups and this ought to be simplified and the conditional ties more relaxed. This is without prejudice to the imperatives of securing the loans with collaterals.
All micro –lending institutions, like the new Lagos State Employment Trust Fund, should extend their facilities to the road side traders and operators of cottage industries national-wide. Effective packages can be designed to accommodate this important segment in the large informal sector of the economy. Any poverty alleviation initiative that excludes poor women, road-side traders, and operators of the vast cottage industries misses the point.
The vast majority of business operators in Nigeria are in the informal sector. Most are traders and artisans. They are overwhelmed by the demands of the banking institution because of the complicated processes of account opening/ operations, etc. Yet, much of the bank deposits are from teachers, artisans, traders, operators of cottage industries, etc. It is an irony that it is the wealthy elite, not the poor depositors, that are able to access large credit for business operations. This is probably why the Nigerian economy is under-banked.
It is estimated that about 70 percent of money in circulation do not go through the banking system; and that’s because only few benefit from a system that is skewed in favour of the elites. Leaders of the capital and money markets need to step up awareness for financial education so that every Nigerian would appreciate the benefits they stand to gain in banking and investment in the financial system.
Thank God we didn’t slide into a depression before this gradual rebound from the recession. Our youths should seize the moment and sail with the wind. This calls for a more determined effort at private entrepreneurship, even at the level of a cottage industry. That’s the way up.
Weekend spice: Courage is not simply one of the virtues but the form of every virtue at its testing point – C.S. Lewis.
OK, folks, let’s do it again next Friday, stay motivated.
• Ladi Ayodeji is an Author, Conference Speaker, Pastor, Business Consultant and Life Coach. He can be reached at [email protected] and 09059243004 (sms only).