By PROVIDENCE OBUH
Stakeholders in the Micro, Small and Medium Enterprises sector of the economy met penultimate week with the United Nations Industrial Development Organisation (UNIDO) to discuss issues affecting the industry and to proffer solution on the need to meet international standards for made in Nigeria products.
National President, Nigerian Association of Small Scale Industrialists (NASSI), Mr. Chuku Wachuku, spoke with Vanguard, claiming that the government of Nigeria and banks only pay lip service to SMEs, which according to him, contributes 95 per cent to the country’s GDP.
Are Nigerian products marketable?
Once the product meets international standards, it is marketable and that is what we are trying to establish, that the Nigerian standard is able to meet up with the international standard. We cannot have a separate Nigerian product away from Ghanaian standard, it does not make sense. Standards Organisation of Nigeria (SON) and National Agency for Food, Drug Administration and Control (NAFDAC) must meet with other agencies, that is why we have international standards and once you do that, then you build confidence in the Nigerian manufacturers that our products meet international standards and you sell them abroad.
The more of our exportable goods you sell abroad, the more employment you create, the more wealth you create and when you create wealth, it drives demand and demand will trigger supply and that is how you create employment.
How is SON building this confidence in the international market?
We hold seminars and workshops abroad with interested agencies, government and media. They can hold trade fairs, and when the Ministry of Industry, Trade and Investment goes out, they can then expose this desk to outsiders, invite the people, Business Membership Organisations (BMOs) also and standard organisations.
The problem is that they do not know made in Nigeria products because some made-in-Nigeria products are labelled made in Dubai, China etc., and they buy them because they trust those standards. We have to know a made in Aba, Nigeria shoe that is of good quality when we buy them.
So just talking about it as the Nigerian government has done is not enough to make them understand that this product meets international standards and that is why UNIDO should partner with us to help us do this because it is a United Nations Organisation.
How do we start creating awareness?
This is really a problem in Nigeria. Nigerian government and banks pay lip service to SMEs. We talk about SMEs contributing 95 per cent to GDP, what are we doing about it? We just talk about it but do nothing about it. BOI talks about meeting quality standards to access their loans but how do you do that? You just sit down and expect organisations to meet your standards, it does not work that way. You have to encourage these manufacturers to meet your standards for them to have the access to finance.
As the National President of NASSI, this access to finance is something I would like to talk about because when you go to banks, they give you conditions and how do you manufacture without capital? When you approach a bank for capital, they tell you, you do not have collateral, if you give them collateral, they say it is not acceptable, so how do we solve this problem? And that is why at the national conference, I will submit a motion that there should be a fund set aside to be able to collateralise loans that SMEs require.
The policy statement/issue is just lip service, we haven’t gotten down to the fundamentals and the fundamentals are the standardisations we need to stimulate growth and if you want to stimulate growth, you must stimulate export and domestic production.
In fact, Nigeria has enough market to consume whatever we produce. We have a market of over 300 million people across the West Africa sub-region.
So why are the small scale industrialists not being assisted to produce? The simple fact is possibly adding value to production system, creating access to finance and training.
We have institutions that are just talking but they are not doing anything. If they are doing it, I will not be complaining. We have financial institutions that cater for 25 per cent of the institution that generates 95 per cent of GDP and you are neglecting the 95 per cent, that is Small and Medium Enterprises Development.
And until there is a good policy to address these issues, how you can link access to finance to industrialists; we are not going to get it right. That is why I will be proposing a motion that a particular fund be set aside under whatever act, at the national conference.
We tried it with First Bank. NASSI has MoU with First Bank, and it hasn’t worked, the reason it hasn’t worked is because part of the need to grant access to finance is for the state government to pay in fund to guarantee this funds that will be given out by First Bank, the First Bank can then give out the fund but they say they cannot give out the fund unless there is a collateral, so we came up with a policy where state governments will pay in money. First Bank will crash interest to single digit and loan this fund out to them. Again, they insisted it must be collateralised, the key issue is collateral, and so without collateral, you cannot access funds.
When I was Director- General of National Directorate of Employment, the concept was self-employment as opposed to paid employment. We discouraged young entrepreneurs and young school leavers from paid employment. Why is everybody looking for paid employment when we have enough market to consume whatever we produce?
The reason you are looking for paid employment is because you do not have access to start your own business. Everybody likes to be their own boss. We should stop paying lip service to small scale industry in this country.
We are talking about FDI, you must have a healthy domestic economy because even what you produce must be consumed. You cannot buy to consume unless you can afford it, so we try to create impetus to earn wealth.
All the efforts and songs government and its agencies have been singing about creating a market for made in Nigeria goods, is it working?
It is working even if we don’t export, we can consume everything here if we can create confidence, quality and standards to what we produce in Nigeria, and that is where SON, NAFDAC and other agencies come in. When you assure Nigerians that made in Nigeria products meet international standards and quality, Nigerians should have enough confidence to purchase such goods. It is not enough to say I decree you must buy made in Nigeria good.
And pirating of intellectual materials
There are agencies like the Customs at the borders. I will rather co-opt the question to corruption and not protecting common interest, national values, where you see agencies that are supposed to regulate, prevent these things from entering our shores, they should be able to confiscate, at least subject them to quality controls. Nigeria should not be a dumping ground, we have institutions that are required to counter those dumping. All materials coming in from China, India are supposed to be subjected to the same standard and quality regulations.
If Nigeria-made products were cheap, you will not have substandard goods dumped here. The reason it is not cheap is because interest rate in Nigeria is high, cost of production is high, we have the raw materials but who is financing you to process those raw materials to produce fine products? Nobody! And it goes back again to access to finance. If there was a holistic approach, where BOI will say let us focus on raw material production, happily, we have Raw Material Research and Development Council.
Cost of labour in Nigeria is cheaper than any where else in the world. China makes lots of gain here because they bring in inferior materials at cheaper prices so they beat domestic production, so you buy China-made suit because the cost of material in Nigeria is high.
If you want to talk of clothing material in Nigeria, then you have to talk of cotton and cotton production is dead. Nobody is talking about cotton because Indians have come and bought all the cotton in Kano and Katsina to sell to us. When we took a tour of Kano State, we discovered that most of the industries were dead so we need to address these issues.