Friday, March 22, 2019 10:30AM /
Nifemi Taiyese for Proshare WebTV
As the countdown to the commencement of the second term of the President Muhammadu Buhari administration begins, The Director General of the Lagos Chamber of Commerce and Industry Mr Muda Yusuf in a recent interview with Proshare WebTV, highlights key areas that should be top priority for the administration in order to develop MSMEs in the country:
Access and Cost of Credit for MSMEs
Access and cost of credit is still a major concern to the MSMEs sector. The MSMEs which contributes about 90% of business activities in Nigeria do not have sufficient access to capital.
Yusuf believes the enactment of the Secured Transaction in Movable Assets Act, 2017 (popularly called Collateral Registry Act 2017) has provided the legal framework for MSMEs to borrow fund with assets like motor vehicles, equipment & machinery, stock, inventory, accounts receivables and farm products.
Nevertheless, he states that a lotstill needs to be done to ensure greater access particularly for rural MSMEs.
“We need to encourage commercial banks to increase lending to MSMEs, but this can only be achieved if there is an effective credit guarantees to de-risk lending to the sector”, he said.
According to him Credit guarantee scheme for MSMEs will promote lending and provide guarantee of loan repayments.
Special Economic Zones
Yusuf, noted that the federal government in its 2019 budget has made provisions for special economic zones across the country. The establishment of these special economic zones will facilitate the growth of MSMEs in the country.
With Special Economic Zones (SEZs) MSMEs in the country will have access to the following to achieve scale in their operations;
· Shared facilities
· Economics of scale
· Industrial clusters that promote healthy competition
Made In Nigeria Policy
The signing of the Executive Order 3 by the Federal Government which focuses on promoting the patronage of Made in Nigeria goods is a welcome development.
Implementation of the EO3 by the Buhari administration according to LCCI’s DG will go a long way to support the activities of MSMEs, that are focused on Made in Nigeria goods and services.
He also harped on the effective enforcement of Executive Order across all the MDAs in the country
For MSMEs in the Agric sector , Yusuf stressed the need for the Buhari administration in its second term to provide guarantees that will insulate them from the variations and uncertainties of market prices.
The government intervention, he asserts would be necessary to help stabilize the activities of the Agri-MSMEs, across the entire value chain thereby encouraging production.
The Central Bank of Nigeria defines small and medium enterprises in Nigeria according to asset base and number of staff employed. The criteria are an asset base that is between N5 million to N500 million, and a staff strength that is between 11 and 100 employees.
Micro, Small and Medium Scale Enterprises are pivotal to the development of any nation’s economy, and it is important for public and private enterprises to nurture this sector to stimulate the production and patronage of goods and services. The essence of MSMEs is that it will help sustain local business sector, produce income and jobs for the country.
This is why government policies must create an enabling environment for MSMEs, to achieve economic growth, economic diversification, job creation and financial inclusion in Nigeria.