Breaking News
Translate

2020 outlook for SMEs – Mabogunje, LCCI President

Kindly Share This Story:
Mrs. Toki Mabogunje

…Hails CBN SME lending policy

…VAT increase to make business more difficult

…AfCFTA: Says agreement will be tough

…Apapa gridlock: We are engaging FRSC, LASTMA

By Naomi Uzor

IN this interview with the President of the Lagos Chamber of Commerce and Industry, LCCI, Mrs. Toki Mabogunje, she envisaged in her 2020 outlook for Small and Medium Enterprises (SMEs) that things will not be as difficult as they used to be  due to the instructions by the Central Bank to banks to lend or risk being penalised. Excerpts.

What is your driving force as the 3rd female president of LCCI?

At LCCI, I am not just the 3rd female president but the youngest woman ever to become the president and my driving force is the vision of the chamber which is to be the voice of business.

At least the last 20 years of my life have been in business development. I actually have a real passion for business and my bent is towards Small and Medium Enterprises because in any economy, the SMEs are the foundation of development, so what am looking for generally is to continue to ensure that the mandate of the chamber is achieved and that it’s a better business environment for all of us to thrive and in that process we contribute to the GDP of Nigeria, we improve economy of the country, our people prosper and all those good things that come with development will also follow.

What has been the performance of SMEs in 2019?

In 2019, the performance of the SMEs is a mix bag, and it is always a mix bag here in Nigeria. Many of the things that limit their performance are still there, is it power you want to talk about or infrastructure?

There were certain things that improved slightly. CBN decided to take up the mantle, they are not a retail bank nor a commercial bank but a regulator but because they saw the poor performance of banks at making funds available for SMEs to be able to grow, they now put out a policy, asking banks to give out about 60 per cent of their portfolios to the SMEs.

This is an effort by the CBN to try and engender growth in the economy. There are more funding windows for SMEs as a result, whether it is coming from development banks like the BoI or commercial banks, but of course, there is still the issue around other types of funding that are not necessarily tied to CBN intervention because ordinarily, you should be able to borrow from your bank and the issue of interest rates which are still very high.

What government policies affect your members?  Any policy of government that has to do with business- even starting from the finance bill that the president just signed- to all the other laws and policies that exist.

Our job in the chamber is to continue to advocate; advocacy is our biggest responsibility and that means constantly talking to government either state or federal and drawing their attention to those policies that are affecting various sectors. One of the interesting things about the chamber is that it is not a sector specific business organization. It covers so many sectors, so it gives us a very wide scope for advocacy. We don’t want them to be removed, we want to continue talking to government about making things better, we want our business ranking for ease of doing business to become better and better so that we can start ranking with some of the developed countries in the world.

As the president of the chamber, what can you do to help the SMEs?

The chamber does not grow SMEs, the chamber enables them to survive in the environment. The other job that I have is straight promotion so I ensure that they have more opportunity to take their goods and services outside and showcase them and then those other countries that are coming to Nigeria to show us what the opportunities are that limit them. The other one will have to do with business development, so as a chamber, we provide training for companies and their staffs.

We will have networking, ensuring that our members meet others within the business environment that will help their business sales to grow. Then you know as the press, we always have a press briefings, which serve as   notification to government on how we who  are in the business, think and what we like to do. So as the president of the chamber, I have a good idea of members required because at council meetings, all the chairmen of all our sectoral groups are there; they are the ones that leads   the president to the particular issue that disturbs them at the sectoral and we bring all those things to the attention of government. So yes, it’s really to ensure that we work hard to improve in the business environment for members.

READ ALSO: FG to US investors: We’re addressing your concerns

Government recently approved 7.5% on increase VAT, what is your take on this and how does it affect your members?

My take on this is that it makes life more difficult for business; it’s going to increase the prices of things. From 5 to 7.5 percent, I think part of what government did in finance bill was actually on one hand, to reduce tax burden that small business that is less than 25 million turnover will be exempted from the tax, but on the other hand they now increase VAT. I think it will affect the price of goods and services.

What is your take on the border closure?

It appears that the original intention around the border closure is that it has a lot to do with security concerns and it seems as if shutting down the borders, the government in some ways achieved a more secured border but the resultant event is something very negative for many sectors because it has limited people’s ability to trade, taking goods across the border. But guess what, there was an advantage that wasn’t quite on the front burner when it was done, there came out our farmers, singing to the bank and they were begging the government not to open the borders again because Nigerians are now being forced to eat Nigerian rice, so no more rice from Thailand.

But there are rumours that this foreign rice still comes in illegally?

Well, I have heard that rumour also, but that is the disadvantage or negative aspect of some of our Nigerian people that some of these things will still happen. But it’s not on the scale of what was happening before so it should be good for agriculture in Nigeria.

I know of farmers that say chicken was not available before Christmas. We had a discussion with the minister, Mr. Adebayo and he said the government will take their time to open the borders, the terms and conditions need to be addressed   so that Nigeria does not suddenly become a dumping ground. We on our side, will continue to engage government in discussions around the border issue, there is no doubt that the borders have to open but I am sure certain things need to be addressed.    What is your position on the AfCFTA and how will the SMEs fit in?

I think the agreement is going to be tough for all African countries but there is no doubt, Africans should start trading with each other. We need to start selling to each other if Africa is going to prosper, and Africa as a continent is there territory biggest market in the world. That is why everyone is looking at us as a market they can sell in. SMEs have a lot of preparation to do, they have to be export ready because to benefit in that agreement, you have to become export ready so that your product must be such that is acceptable in that territory.

Already, we have all the agencies that are required for us to be export ready: the Standard Organisation of Nigeria (SON), which will tell you the standards that will certify you, and tell you if your product is good enough to consume not just in the country but outside. We also have some of the funding windows which we haven’t been taking as serious as we should have which enables SMEs to be able to export.

There are a lot of support services that are given to SME organisations, like LCCI, NASME, etc. Each of these organisations must create a system that helps to develop their members so that they can take the advantage within those organisations. They should make sure they have current training programs to develop their members so that they will be export ready.

Will you say Nigerians benefitted from the AGOA program?

The AGOA program is really an attempt by the administration to really give Africans an opportunity to export and it was definitely looking at the SMEs. When they saw that for some years, it was difficult for Africans to access loans, they set up AGOA offices so that they will be able to export outside and export legitimately and legally. As we speak, Nigerian goods still go outside but they are not being exported officially; they are being carried across the border. AGOA gave not just Nigerians but Africans opportunity to export.

The idea was to hold weekly seminars, workshops to help people with packaging, connections, certification of their products and so on, and for some reason at which am not pleased, we haven’t taken advantage so you would go abroad and you will see products coming from Ghana, South Africa label, Kenya labels and you will see the countries taking advantage of AGOA; but for Nigeria, we have not taken advantage of AGOA program. The deadline was extended for more of our SMEs and they became a bit aggressive.   I know that some Nigerians were able to take advantage but not the number that America was expecting.

What’s the outlook for businesses in 2020?

The outlook for SMEs is not as difficult as it use to be. I am not saying it’s not difficult, but not as difficult as it used to be because now unlike before, banks are actually being encouraged to lend money. That was not the situation before and if they don’t lend money, CBN will penalize them. Every year, there are certain sectors that will shine. There is a great push on agriculture, the tech companies are doing marvelous things, the Fintech companies are giving banks a run for their money, from light manufacturing to heavy manufacturing, they are making money. The major constraint is power. Power may not improve by much, we are still going to have kind of issue because there is not much you can improve in the span of a year, so looking at just a year, power may not improve to any great extent. Infrastructure like roads may improve slightly all because we know Dangote is working on some roads, Sanwo Olu is also working on some roads, so hopefully, we will see some of those roads before the end of the year.

The Nigerian Ports Authority are working seriously on port congestion, so I was so happy when I saw the news that stakeholders meeting was called, residents/business people in Apapa on how to solve the problem. I think the fact that government keeps to its promise that the railway is going to kick off by the end of the year is going to make a big difference because trailers are taken off the road, the congestion will reduce. Goods will go from Lagos to Kano state on train, and to other far states on train, that will truly decongest the expressways.

I think that Nigerians generally score very high in creativity and entrepreneurship skills globally but I think we have to find creative solutions to our problems. The regulatory authorities has begin to develop a listening ear, before you talk and talk but you get no response, but now, you actually know that if you complain, you will get an answer, whether you like the answer, it doesn’t matter but you will surely get an answer, so as long as they have listening ears, that means there is hope for resolution of problems.

How would you rate the business environment in Nigeria?

You know what is happening that everybody is using the World Bank rating, so the World Bank is being used across the world and that is how you can know where you rate. According to the number of countries that they are rating, so with regards to Dr. Oduwole and PEPEC, they have realised that as of last year, a lot of their work at the national level, getting results is not even making a difference at the stage, so you will not be hearing of them at the national level anymore. Now they are working with the state government, those successes they had at the national level, they need to have similar successes at the state level.

Apapa gridlock has been ongoing for some years now, how does it affect your members and businesses in Nigeria?

We actually have a sectoral group who are freight forwarders and their network is around Apapa port. Because of them, we are on top of it, because of the complaints of several years of suffering from congestion of Apapa port the chamber was able to secure a grant to actually do research at the port and we actually prepared a report of our findings and we have officially submitted to the president and to the out-gone minister of industry.

We are now in engagement with those at the Ports Authority, we are even looking to do a follow up, like a review on what it is that has improved, what else we should be doing, etc. The port issue is of great concern to even people that are not in the business, so we at the chamber will continue to advocate. In terms of traffic control in Lagos, we have actually engaged FRSC, LASTMA and all those who are in charge of traffic control. We will engage them at least once in a year: they come here, we have a meeting, we let them know what is the new issue that has risen and let them know that there is more work to be done.

Vanguard

Kindly Share This Story:
All rights reserved. This material and any other digital content on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from VANGUARD NEWS.

Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.
Do NOT follow this link or you will be banned from the site!