Entrepreneurs & SMEs in the Rescue of the Economy

Our Nation is going through very tough times and every opportunity to contribute to its well being must be taken with both hands. It is heartening that the Church has begun to take its rightful place in setting agenda for Nation building. The Church can not be the salt of the Earth or the light of the World by being aloof or indifferent to the political, economic and social happenings in the Country. Here in lies the hope for the salvation of Nigeria.

Chronically an Under-Performing Economy

Nigeria’s economy has underperformed over many decades and seems to be getting worse. Except for the 60s and 70s, Nigeria’s economy has been under stress from the 80s with occasional flashes of growth. For most of these years, when we adjust our headline GDP growth rates with population growth, the reality is that we have been on a very long recession which has now precipitated and crystallized into the high level of unemployment and poverty in our Country today. It has been long in coming.

The primary reason for this chronic economic under performance and consequent debilitating underdevelopment is that we have largely depended on crude petroleum as the main source of our national income and expenditure. Nigeria’s economic fortune rose and fell with the rise and fall of the price of crude oil in the international market. Nigerian political leaders, for many decades seem to have been unable to have a real understanding of how an economy grows. When you hear some of them read the speeches written for them by their speech writers, you get the wrong impression that they mean what they read. Many are long on speeches and promises but very short on action and delivery.

Every sustainable economic growth is driven by INVESTMENT. I can say that without investment, there is no economic growth. Investment creates business, business creates jobs, jobs create goods and services (wealth) – driving up economic growth and reducing poverty. Public sector investment in terms of capital expenditure in Roads, Bridges, Railways, Airports, Seaports, Electricity instigate economic growth. But because public sector expenditure is very limited, their ability to drive economic growth is also limited. But in economies like the one we are currently operating, where recurrent expenditure has significantly dwarfed capital expenditure, the impact of public sector spending in driving economic growth is further minimized.

Entrepreneurs and SMEs to the Rescue

Therefore, sustainable economic growth in mature and high- growth economies is essentially driven by private sector investment. And much of this investment is made by entrepreneurs- men and women who take the risk to set up businesses to fill needs, solve problems or create value through creating products or services and in the process make some profit. It is therefore logical that the more entrepreneurs we have in an economy, setting up more businesses, employing more people and providing more products and services, the higher will be the growth of the economy. Accordingly, we should expect our governments to put their major focus in attracting these entrepreneurs to their jurisdictions. That in my view should be the major focus of any government that desires economic well being of its people.

The Plight of the Entrepreneur in Nigeria

The plight of the Entrepreneur in Nigeria, especially those in the Small, Medium Enterprise (SME) class is rather pathetic because we seem not to understand or indeed, appreciate their central role in driving economic growth. Most of them seem to operate in hostile environments all over the Country. Among the several challenges, the following stand out:

·        They are burdened by the high cost of obtaining land or adequate space for their businesses

·        They find it extremely difficult to access financing from banks and with the dearth of private-equity companies, they can not easily get equity funding. And when the funding is available, they may come at high double digit interest rates or with unattainable collateral demands. Though some effort has been made in this direction in recent times by the CBN, the gap between demand and supply remains very huge

·        They face extreme bureaucracy in obtaining government approvals and licenses. Some States are worse than others.

·        They are subjected to disconcerting policy inconsistencies

·        They face extreme challenges in enforcing contracts with a justice system that moves at snail speed.

·        They are compelled to incur unnecessary expenses in providing basic infrastructure and services – roads, electricity, security etc

·        They face multiple and multifarious taxation/ extortion from State and non state actors

·        They operate in high inflationary and high cost environment which often makes them globally uncompetitive

·        They are confronted with high incidences of unfair trade- illegal copying, imitations, look-a likes, faking and smuggling.

·        Non-existent or insignificant incentives from Government and in a few cases, where there is provision on paper, there is hardly performance

What do Nigerians Want?

Nigerians are tired of living in a country with 43% of Youth Unemployment and over 50% poverty rate. Nigerians are tired of living in a country that has failed to diversify its income sources from crude petroleum, a country that can not produce most of its needs but has to depend on other countries. Nigerians are really tired of living in a 3rd World with low human development indices.
Nigerians want to transit from a 3rd World to FIRST WORLD like South Korea, Singapore, Japan etc, countries that were in the same economic league with Nigeria in the 60s and 70s. They want

⁃ Full employment and economic empowerment for all the able-bodied especially the Youth in Nigeria

⁃ Eradication of crushing poverty from Nigeria

⁃ Increased quality of lives for all citizens

⁃ Safety & Peace to live and work

Nigerians want opportunity to live in a decent Nation which is at peace with itself, and globally competitive and respected where they and their children can live fulfilling lives. And to do so, Nigerian Governments at all levels must turn their focus to promoting and supporting Entrepreneurs and SMEs as the bedrock of the needed economic renaissance by doing some of these:
. Introduce compulsory entrepreneurial education in all higher institutions of learning in Nigeria, so we can begin to produce graduates who can SOLVE PROBLEMS & CREATE WEALTH.

. Make land and other inputs easily accessible to young entrepreneurs
. Reduce bureaucracy in providing permits and licenses for entrepreneurs
. Provide industrial and Business Parks for entrepreneurs and investors to reduce infrastructural hindrances

. Abolish multiple and multifarious taxes for SMEs, focus on job creation and increased productivity to expand tax base

. Promote access to low interest and long term financing for SMEs

. Create a stable policy environment

. Design a bouquet of irresistible incentives

. And guarantee the enforcement of law and order

CONCLUSION
The economy of this Nation can be put on the path of sustainable growth if our leaders and policy makers can focus on creating an enabling and supportive environment for enterprise growth. It is the most effective way of creating jobs, growing wealth and reducing poverty. Additionally, it is also the most effective way of sustaining income for government through taxes (corporate and personal). I believe that Nigerians want a crop of ENLIGHTENED, VISIONARY, HONEST, COMPETENT AND COURAGEOUS LEADERS THAT WILL IGNITE AN ENTREPRENEURIAL REVOLUTION THAT WILL TAKE THIS NATION OUT OF CHRONIC ECONOMIC QUAGMIRE AND UNLEASH A NEW PHASE OF ECONOMIC PROSPERITY FOR ITS LONG BELEAGUERED CITIZENS.

The above was excerpted from a speech delivered by Mazi Sam Society of Nigeria (PSN) Convener, NEW NIGERIA GROUP (NNG), at the Annual Lecture Colloquium (The Forum) of the Christ Church, Port Harcourt on June 12, 2021