The Small and Medium Enterprises Development Agency of Nigeria SMEDAN has signed a Memorandum of Understanding, MOU with the Nigeria Export and Import Bank NEXIM to enable MSMEs benefit from the African Growth and Opportunity Act (AGOA). The signing ceremony took place on the sidelines of the Exporter Enlightenment Forum for North West Zone held in Katsina State on Monday. The MOU would see SMEDAN providing entrepreneurship trainings and capacity building for exporters while NEXIM would provide the funding.
In his address, the Director General of SMEDAN Dr. Dikko Umaru Radda, said the signing of the MOU was a demonstration of the Agency’s desire to promote synergy among agencies of government and expressed hope that the MOU
would be beneficial to MSMEs considering the fact that the present administration is focusing on non-oil export which will soon drive the economy of the country.
He said the northern states and Katsina in particular has the potentials to lead the non-oil export drive. He added that the state should capitalize on the forum and gain knowledge and benefits from the opportunities offered by NEXIM.
In a paper titled repositioning MSMEs for sustainable growth in non-oil exports, the DG SMEDAN Dr. Dikko Umaru Radda stated that Nigeria’s economy was quite diverse prior to the discovery of oil but that presently the nation depends on earnings from crude and gas export. He added that massive innovations and general glut in international market has made crude oil not so attractive. Other major oil exporting nations have proactively widened their export base and that Nigeria cannot be an exemption.
He stated that the National Bureau for Statistics 2013 survey reports has revealed that only 1-12 per cent of over 37 million MSMEs are involved in some form of exports as such Dr. Radda said there was an urgent need for synergy and collaboration among enabling ministries departments and agencies to promote and develop MSMEs in the country.
On challenges bedevilling MSMEs in Nigeria, Dr. Radda said most MSMEs are unable to access funding windows, as over 90 per cent are not covered by insurance policy, while almost 96 per cent operate below optimum capacity, and almost 95 percent operate without business plan. He posited that MSMEs contributions to export is 7.27 Percent according to the Nigeria Bureau of Statistics 2013 and 9.2 Percent according to the World Bank 2017, adding nothing has changed significantly.
The Director General also listed Small and Medium Enterprises, SMEs priority areas of support namely; infrastructure, Taxation and Access to Finance, and restated Governments efforts in diversifying the export basket of Nigeria. He said the federal government introduced some initiatives to ensure MSMEs play more important roles and become competitive in global market. He mentioned the Economic and Recovery Growth Plan ERGP, Ease of Doing Business Grants and the Non- Oil Export stimulation facility NESF as some of the measures put in place..
On the importance of Non-Oil export, he said the non-oil export value for the first quarter of 2018 was 577.64 billion and non-oil export was about 12.3 per cent of the total export of 4.69 trillion.
Dr. Radda said SMEs needed to be involved in export for increased sales and profits, opportunities to gain market share globally, foreign exchange earnings, increase in GDP, acquisition of useful knowledge technology and information as well as job creation.
He called for increased investment in infrastructure provision, create and offering of accessible financial incentives such as Tax, Development fund, licenses and subsidies. Dr. Radda further called for the initiation and implementation of targeted key policies, such as massive investment in knowledge and capacity enhancement and increase awareness campaigns, town hall meetings on export initiatives for SMEs.
The DG SMEDAN reiterated the Agency’s commitment to serve as a one stop shop to harness and harvest MSMEs benefits, as well as create and connect potential SME exporters to appropriate mentors and advisers and facilitate the establishment of shared facility or common processing facility.
Dr. Radda noted that the federal government is determined to pursue a fiscal strategy framework based on non-oil, adding as MSMEs account for over 91 percent of enterprises in Nigeria, there was the need for a deliberate effort to enhance them for competitiveness and export readiness.
He said looping a significant number of SMEs into the export market was the surest way of diversifying and sustainably growing the economy.