Prince
Rotimi Ogunleye, Lagos State Commissioners for Commerce, Industry and
Cooperatives, has big plans for Miro, Small and Medium Enterprises operating in
the state.
He
restated state government's commitment to make Lagos the business hub of the
country which would be achieved with massive incentives to entrepreneur.
Ogunleye
also spoke on the benefit of the recent trade fair held for Micro, Small and
Medium Enterprises, noting that this was the time to put MSMEs on the forefront
of the state economy.
Excerpt.
Essence
of the MSME fair
The
rational behind the fair was to give the MSME a platform to exhibit their goods
because of the problems of our mono product economy. We have come to realise
that Nigerian economy has to be diversified, because by my experience and many
years of study, I know that MSME sub-sector is a vital tool for economic
transformation and development.
So,
we came up with this idea that SME should be given a platform to display their
goods so that people could see them and by that, they could be assured of
patronage.
In
Lagos alone, we have over three million MSME. Our governor, His Excellency,
Akinwunmi Ambode, gave us the approval to go ahead and we decided to put in
place the fair for them between May 3 and 8, to display what they are
producing.
What
we achieved organising MSMEs fair
Many
of the operators in the sub-sector were happy that they have that platform and
over 125 people came to participate in the fair to show their products. If not
for space constraints, they would have been more than that and we could have
recorded thousands of them at the fair. That is why our governor said that the
second edition should be done in a bigger space.
The
patronage and the response was very encouraging and it shows that operators in
this subsector were waiting for the platform to display their goods.
What
participants paid to showcase products
We
did not charge any amount. It was free. Many people came at the latter end of
the fair. The Ministry is meant to assist them to access market and draw
patronage from people. So, if the fair is able to do these for them, it will
boost their business and make them to sell their products. Many of them made a lot
of contacts for sale and supply of goods. I am sure, with this, they will
produce more and get market accessibility so that they could employ more hands.
That is our aim and that is why we did not charge anybody any money for putting
up a stand at the exhibition ground.
Next
exhibition
The
next one will come towards the last quarter of this year. From the response we
got from this first one and the calls we received, we have seen that many
people are really interested in the fair. People were happy that we came up
with this viable option. We expect greater participation in the next one coming
up next this year.
One
thing about this event is that we really partnered with some private sector
operators such as the online e-commerce operators, who gave incentive to the
SMEs by listing their products on their e-mall platform. This means that, we
have achieved what we set out to achieve from the fair.
The
visibility of operators and their accessibility to the market matters a lot
including patronage. Quite a lot of them told us during the fair about the
benefits they got in terms of visibility from the people that came to the fair.
This is because many of them did not know before that one could produce good
soap from carrot that one could birth with. They did not also know that one
could recycle waste sachet water nylon into very good nylon bag that could be
used as containers. They all saw those things at the fair and they were very
happy.
A
lot of business deals were done and that is what we set out to achieve. By
this, many of our country men will be able to patronise many of locally
produced goods. This will, in effect, lead to reduction of our import dependent
attitude because our tilt towards foreign goods and foreign items has been the
bane of this economy. This has subjected our currency, the naira, to a lot of
downward pressure, thereby making it to fall ceaselessly against the dollar. If
we look inwards and embrace backward integration by using our locally made
goods, this pressure could be reduced drastically. Also by patronising the SME
operators, they will be able to produce for exports and this will lead to a
win-win situation for the country.
Cost
of organising fair
It
is not the cost that matter. This Ministry was set up to initiate, formulate
and develop policies that will create enabling environment for commercial,
industrial and cooperative activities with the sole aim of gathering the
necessary potential available in Lagos State towards massive economic
development and transformation.
Policies
being put in place to assist SMEs
I
have told you about the platform provided by Konga-the e-commerce operator that
listed them on its platform. This is to make it possible for any interested
party to see their products and make order. From us in government, we have
incentives for the operators such as the N25 billion packaged by the government
to assist the SMEs. Out of this, N6.25billion will be put in charge of board of
trustees in charge every year for the SMEs to access. It is three per cent
interest rate and it is the cheapest you can get anywhere.
We
have also spoken to a number of financial institutions for conventional bank
loans. They have their own excuses because they have the minimum rediscount
rate (now monetary policy rate) at 11 per cent double digit. They will add
their own margin which does not allow them to come below the MPR rate.
But
we have also spoken with the Bank of Industry because they have 5 per cent
interest rate which we have encouraged the SMEs to look out for. Incidentally,
BoI was also at the seminar to display their products. Their forms were
available and they attended to people at the fair. We spoke with them to assist
the SMEs at the fair.I equally know that at the level of CBN, there is a pool
of fund for the SMEs.
Conventional
banks should look at this in conjunction with the CBN so that we give loans to
the SMEs at a lower rate. We should not use the market rate for the SMEs
because if we want to grow the economy and diversify it, we must develop the
SME. The fair done by the Lagos State has shown clearly that the Nigerian
creative spirit is high. Our people have the creative ability to produce
locally made goods. The skill could be low because of lack of fund. This could
have enabled them to produce on a larger scale. Financial institutions should
assist the SMEs. I was reading a story recently that there was SME intervention
fund in CBN that was grossly under-utilised. Why should that be when we have a
lot of SMEs looking for funds to develop products. If we want to assist the
SME, we must make sure that interest rate on their loans is not more than five
per cent. That is why Lagos State has used the benchmark of three per cent
interest rate for the SMEs and I believe that appropriate policy should be put
in place to allow interest rate come down for the SMEs like what is down by
Lagos State.
Gone
are the days when people used to say that SME will only collect money to marry
wives. Now, that mindset should be dismissed and we should do away with that
prejudices. SME operators are serious minded people and they have shown that at
the last Lagos fair as many item needed in the house were displayed at the
fair.
CBN
should adjust MPR
Yes.
CBN should reduce the MPR for the benefit of SME operators. Double digit
lending rate is not good for these operators. If we are talking of
diversification, the key lies in that sub-sector.
Helping
SME to package proposals to banks
At
the last fair, there was a business clinic where agencies like NAFDAC, SON,
LIRSI, FIRS and others attended to people and many operators were very happy.
The fair was not only for them to display their goods but for them to get
services.
This
was done to further enlighten the operators on the need to package their
products very well so that they could be more competitive. This will enable
them to stand the test of time and standardise their production processes. It
will also enable them to package their business profile very well to reflect
identifiable team of operators and not "I and my wife" business. This
is necessary so that they could approach financial institutions for loans and
get good response. BoI actually mentored quite a number of these operators at the
fair and many of them confessed that they received good service from the bank.
This mentoring issue has been part of the negative factors that has been used
by many people to withdraw attention from SME and to score them low. We were
able to address that problem at the fair and many operators said they left the
exhibition as better operators and that they are looking forward to another
one.
Changes
to be introduced at next fair
You
know that in anything you do, you must improve on it. That is the essence of
life. I have not seen anything negative in the first one but we will ade sure
that we expand the space to accommodate more participants.
Apart
from the product display, I want to see many fabricated machines that SMEs
could use to produce better goods at the next fair. An operator displayed
certain machine at the last fair that could produce sachet water nylon. The
picture was brought but I would have loved to see the machine physically. Some
Nigerians made this machine, we will like to give such a person platform to
display such machine so that other people can emulate him.
I
will also like to see conventional financial institutions such as commercial
banks displaying their products for SMEs at the next fair. When we were
planning the last fair, we discussed with some conventional banks but they
could not make it because the time was short. I will like them to come to the
next fair so that they could meet face-to-face with their SME customers.
Late
entry
Yes,
many came late. We have already fixed the date for the fair and we could not
wait for them.
Banks'
role in next fair
They
are more in number and they have their various outlets across the country.
Sometimes, we read in the newspapers that banks were doing this and that for
the SMEs but we failed to ask them how many SMEs have they funded and how many
are they funding.
We
want them to come to the fair so that they could really meet with the operators
that actually need the fund. Let them say exactly to the people what they
wanted them to do to access their money and the sacrifice they have to make.
I
know that they banks are using depositors fund and that they have to make their
profit but they must be able to do social responsibility from a portion of
their profit. I know there was a policy like that before that banks should
devote part of their profits for SME development.
That
was during the era of Joseph Sanusi as Governor of CBN.
Yes.
That policy is no more. They must bring back the policy. When these SMEs grow,
they could become bigger customers to banks and banks should know that. It is
like planting a seed. It a risk. Business is a risk. By the time you nurture an
SME which, by your judgment has a future, it will become a bigger customer that
will be depositing millions into your account.
I
urge conventional banks to do these sacrifice. That is why I want them to come
to this fair next time. We are going to start preparation for the next one
early enough so that they could get whatever approval they want from their
management for them to participate in the fair.
What
other incentives are you packaging for these SME?
We
did not do the last fair alone. We did it with other government agencies and
some private sector operators. They all have their stands there. Lagos Chamber
of Commerce and Industry (LCCI) and SMEDAN were there. We have Technological
Incubation Centre (TIC) where people with ideas are first nurtured. The TIC in
Agege is being managed by the federal government and we are collaborating with
them. They work with the private sector and they provide platform for SMEs to
operate.
Is
the next fair too going to be free?
Of
course yes. We don't intend to charge money. Every year, we sponsor SMEs to the
Lagos international trade fair free. We use to take a big stand there for them
to display their goods free of charge. This ministry is to enable, empower,
sustain and encourage SMEs.
Are
you organising any workshop on capacity building for the SMEs soon?
Our
ministry of employment and wealth creation do a lot of that. That ministry
takes huge portion of our mandate such as informal sector and issue of capacity
building for cottage industry. They were taken from us to that ministry.
We
interfaced with them and they are doing a lot of that capacity building.
What
is going to be your message for the participants in the fair?
To
the participants in the fair, I want to praise them and say that it shows that
they have a lot to offer by coming to the fair to display their goods. It has
shown that Nigerian economy can be revived and redirected in the right
direction to promote local entrepreneur.
This
is what the Chinese and India did to develop. All these various companies that
are now multinationals, such as Leventis, Suzuki, John Holt and started as
family businesses SMEs before they became big. They were able to grow because
they created platforms for them to grow. They were able to grow by coming out
that they have something to show the world.
For
those who did not come to the last fair, I want them to come and participate in
the next one because we have planted the seed and the seed is germinating. We
have also come to the realisation that SME is the key to the economic
development of this nation. Let us patronise the SME products so that they can
produce more goods, sell them and employ more people on the system. By that, we
will be growing the economy and make it larger.
SOURCE: THE SUN