Peter Olowu, the Managing Partner of Wistraledge Consulting, talked
about the challenges of SMEs in Nigerias and also the possible
solutions to them. He spoke with Ikechi Nzeako. Excerpts:
What is your assessment of SMEs in Nigeria?
SMEs have played and continue to play significant roles in the growth, development and industrialization of many economies the world over. In the case of Nigeria, SMEs have performed below expectation due to a combination of challenges which range from attitude and habits of SMEs themselves through environmental related factors, instability of governments and frequent government policy changes and somersaults.
The nation needs the Small and Medium Enterprises (SMEs) because they contribute to economic development. They are in the forefront of output expansion, employment generation, income redistribution, promotion of indigenous entrepreneurship and production of primary goods to strengthen industrial linkages. The agricultural sector, which comprises mainly of SMEs, has promoted indigenous technology and increased utilization of local raw materials but more has to be done generally by all stakeholders.
What services does you company provide?
Wistraledge Consulting Services is a consulting firm that specializes in human capacity building (training) and various business support services and management consulting services such as advisory, financial and tax services, strategy and solution, special SME business support services, recruitment and outsourcing. Business from start-ups, SMEs to big companies can benefit from our services to stimulate growth and excellence in their businesses.
What are the challenges of SMEs in Nigeria?
At Wistraledge Consulting, we have carried out research in many areas, business and market analyses on SMEs and our conclusions have similar things in common. We have identified the major challenges and constraints, which have militated against the SMEs from playing the vital role in the Nigerian economic growth and development; many SME promoters claim that the government is not doing enough to encourage, stimulate and protect the Nigerian SMEs.
The main challenges of SMEs in Nigeria include: management, access to finance, infrastructure, government policy inconsistencies and bureaucracy, environmental factors, multiple taxes and levies, inability to access modern technology, unfair competition, marketing problems and non-availability of raw materials locally. Thus managerial problems represent the greatest problem facing SMEs in Nigeria while non-availability of raw materials locally is the least problem. The problems and challenges that SMEs contend with are enormous but it is curious to know that some SMEs are able to overcome them.
Another problem confronting SMEs is paucity of funds for growth and expansion. When the funds are there, the interest rates are prohibitive thereby making goods uncompetitive with the imported ones.
What do you think the government can do to enhance the growth of SMEs?
The high degree of poverty and unemployment with their attendant high crime rate in Nigeria has been of great concern to the various governments as well as the civil society.
Given the vital and salutary role and contributions, which SMEs play in other developed and developing economies, and considering the ongoing reforms by the government of Nigeria, which are primarily aimed at creating wealth, reducing poverty, generating employment, re-orientating values, and stimulating real economic growth, it becomes compelling for the SME sub-sector to be revamped, overhauled and energised towards playing its expected roles.
The SMEs remain a veritable vehicle for such an expected complete turnaround in the economy of Nigeria.
In other words, if the government at all levels is to realize the lofty objectives of their various programmes, the SME sub-sector has to be thoroughly revamped and focused on for a while.
This is one of the ways that the government can be sure of realizing the objectives of the well-intended reforms and be sure of moving the economy forward to the delight of all stakeholders.
Another key thing that the government can also do is human capacity building. The government can engage the services of training and consulting firms to assist in training micro businesses and start-ups. Existing SMEs are not also left out. There is a need for capacity building. Many SME promoters or owners have been frustrated out of business by their own ignorance because they lack the technical know-how or manpower to survive in business. Human capacity building is one of our key services at Wistraledge Consulting and we encourage SMEs promoters or owners to also train and retrain themselves. Many of them need more than technical skills to survive in business. Some just need one or two soft skills training to enhance their entrepreneurship skills.
Some SMEs owners claim to be in business and they do not even know what entrepreneurship entails. The role of human capacity building is very key in business development. People need to embrace not just technical knowledge but soft and interpersonal skills to really take their business to the next level.
Apart from the government, do you think other large organizations have
roles to play in the development of SMEs in the country?
In as much as the government is saddled with the responsibility of creating an enabling environment, larger organizations should understand that they are stakeholders in the country. They can also support SMEs through various corporate social responsibility (CSR) activities. Many SMEs are found in various value chains. Financial institutions can give loans at affordable interest rates. Also the requirement of loan acquisition can be made more flexible rather than being rigid. At Wistraledge Consulting, we run a free business and investment clinic for start-ups and existing SMEs. We give them free, consultation, advisory, business analysis etc. Many SMEs have taken advantage of our free business and investment clinic and we diagnosed their businesses and gave the necessary solutions. We do not just give or recommend solutions but we also assist with implementation of the required strategies and solutions.
You will agree with me that if other organizations too can play various roles as a way to contribute their quota to the nation building just the way Wistraledge Consulting does assist numerous SMEs through the free business and investment clinic then many SMEs will be positively affected and this will surely stimulate growth. They are many start-ups that are technologically driven. Imagine a big organization committing aside a reasonable amount of money just to encourage these start-ups in the innovation and technology market. They can just see it as part of their CSR. The government can also come in by giving some concessions to them in the areas of tax for impacting positively in the development of SMEs in the country. The same model applies to other sectors. We at Wistraledge Consulting have also advocated several times both in the print and digital media that big organizations can also be organizing various competitions for start-ups. Many of these micro businesses have great ideas but unfortunately they do not see the light of the day.
Are there potential and opportunities for SMEs in Nigeria?
The potential and opportunities for SMEs in Nigeria to rebound and play the crucial role of engine of growth, development and industrialization, wealth creation, poverty reduction and employment creation are enormous. The realization of this requires a paradigm shift from paying lip service to a practical radical approach and focus on this all-important sector of the economy by the government realistically addressing the identified problems. While SMEs themselves need to change their attitude and habits relating to entrepreneurship development, the government needs to involve the SMEs in policy formulation and execution for maximum effect. There is also the need to introduce entrepreneurial studies in the curricula of our tertiary institutions in addition to emphasizing science, practical and technological studies at all levels of our educational system.
Promoters of SMEs should ensure the availability or possession of managerial capacity and acumen before pursuing financial resources for the development of the respective enterprise. At Wistraledge Consulting, we do emphasise this to our clients. We make them know the importance of training and re-training of employees. If you want to get the best from your workers, you just have to train them because it is not only the business owners that need human capacity building, the workers do too.