By Moses Nosike

The blue print report recently released by the Institute of Credit Administration (ICA) has recommended that the Federal Government should make a strong and emphatic policy statement for all government agencies, multinationals and blue chip companies operating in Nigeria to pay small businesses within 14 calendar days of receiving a correctly rendered invoice for goods or services provided, urging the government to boost the growth of Small and Medium Enterprises through tax incentives, single digit interest rate among other supports.

Speaking, the Registrar/CEO Institute of Credit Administration, Prof. Chris Onalo, FICA, said, “this was stated in ‘ICA blueprint report for growth, development and sustainability of micro, small, medium size enterprise sector in Nigeria’.

Explaining the necessary supports further, he said that public Credit Guarantee Scheme is a common form of government intervention to unlock finances for MSMEs towards economic development. “While successive governments including the incumbent had introduced various CGSs, the findings in the report stated that more efforts are still required in this regard.

Continuing, Onalo said that CGSs in Nigeria should be designed to take into consideration the peculiarities of the Nigerian MSMEs. “Even though most of the CGSs come at a single digit interest rate, accessing them is pretty difficult by MSMEs because of the conditions imposed on accessing such finances by the banks.

Analo further said, “In terms of single digits loans, many MSMEs contend with several economic factors while running their ventures. Because of the scale and wherewithal of the MSMEs, these factors have significantly impacted on their profitability. The ICA blue print report canvasses for the support of CBN in conjunction with the Developmental Banks to create more sector specific funds which MSMEs can access at single digits and without so much difficulties or strenuous conditions.

Under tax incentives, the Institute suggested that the Federal Government can jump start growth and development in the MSME sector by implementing targeted tax incentive policies.

While this may immediately lead to reduction in revenue generation of the government particularly in this dire period of dwindling government revenue, the medium to long term benefits on the economy cannot be over-emphasized. The institute also stated in its blueprint that the governments at Federal and State levels should thinker with the idea of setting up industrial parks with state of the art technology in each of the state capitals in the country. The industrial parks will reduce barriers to entry for MSME as they will be able to produce without thinking about the cost of installing infrastructure and other equipment.

With the industrial parks, MSMEs will be able to manage their cost of production, achieve scale as well as improve product quality due to the state of the art infrastructure already provide by the government.

To help Nigerian economy grow faster and sustainable, the Institute has imposed on itself the responsibility of assisting the Nigerian governments towards economic development. We will also assist political managers, policy makers and regulators with freshly sourced economic-growth roadmap every quarter. This is being done by the Board of Fellows (BOF) of the ICA through its blueprint report, research and development activities, in addition to its traditional mandate as a professional body”.