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.


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.