By Ishaya Ibrahim
Faith Moses finished from a university, decided to be making laptop bags, folder files, wallets, instead of looking for a job in a corporation or government offices.
As an undergraduate of the University of Maiduguri, she witnessed first hand the horror of schooling amidst bombs. What good could come out of the state? That was the inspiration for her new found love – bag making.
To be unique, she decided to use a traditional fabric from Borno State known as the bunjuma, a sky blue material to accessorise her wares. The idea of the bunjuma was to carve a selling niche for her products, especially among the Borno people.
For two months, she worked hard, produced many of the wares, advertised on social media, visited many offices, including Borno Liaison, politicians, businessmen, some of whom she gave her products as a souvenir. She soon burned out. Sales were low. No money to pay the workmen. No funds to continue production. Only good wishes and commendations.
“Doing business is hard,” she lamented, after trying and failing to secure funding for her budding business.
Many great business ideas like that of Moses have died at their infancy due to lack of funding.
“Even though Micro and Small Medium scale Enterprises (MSMEs) are generally believed to be the most effective catalyst for economic prosperity because they are the biggest employer of labour and a veritable sources of internally generated revenue for government, they are at the bottom rung of the ladder in terms of investments,” says John Nnaemeka, an investment analyst at Market Concept, an asset management company.
Available data on the website of the Central Bank of Nigeria (CBN), show that in seven years, 2008 – 2014, credit granted to the SMEs as a percentage of total banks credit to the private sector was 0.1 per cent.
While the average monthly credit to construction and the real estate industry for the period under review stood at about N1.1 trillion, SMEs monthly credit is N16 billion.
In Lagos, the impact of such high lending to the construction and real estate sector can easily be felt across the state. Big malls, tall buildings, mega-markets are springing up at rapid speed.
In Ikeja alone, two major malls like the type found in Dubai, are almost completed. One beside the Alade Ultra Modern market, and the other, along the Adeniyi Jones – Ogba road. In Abuja, Port Harcourt and other big cities, the story is the same.
Investment in Treasury Bills (T.Bills) is another preference of investors and banks. T.Bills is a short-dated instrument with almost zero risks, unlike SMEs.
Whenever the government issues this instrument, the subscription is total, sometimes oversubscribed like the one of January 16 this year when the government issued a T. Bill of N193 billion for 364 days, N26.6 billion for 182 days, and N5.8 billion for 92 days.
Why SMEs should be supported
Investing in SMEs is the fastest way to grow the economy, to strengthen the local currency and provide jobs for the teeming unemployed Nigerians.
For Muktar, her interest was to provide quality bag packs as against the low-quality import that are easily spotted in local markets. But she lacks the capital to compete.
For Gbenga Olanipekun, a shoemaker and 2014 graduate of Linguistic and Communications, at the Osun State University, Osogbo, it was absurd that 80 per cent of the shoes paraded as foreign made are nothing but inferior ‘China clones.’
He wanted to bridge that gap by taking advantage of Nigeria’s finest leader quality and be producing quality footwear. Even though he has been a bit successful, lack of funds has made him unable to compete effectively against those imported ‘China clones.’
“If I tell you how much I spend on power. But I could also choose to go to China and make that Gucci shoe. If I’m making 100, I can make one for N5,000. But they’ll start peeling off after two, three months,” he told TheNiche in an interview.
The government has long acknowledged the place of MSMEs in the economic growth of the country. How soon can the words transform into action remains to be seen?
