SME Development Impossible without Good Quality Products

19 Feb 2013

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190213T.Senator Nnenadi Usman.jpg - 190213T.Senator Nnenadi Usman.jpg

Chairman, Senate Committee on Industry, Senator Nnenadi Usman

Crusoe Osagie

The Senate Committee on Industry has said that standardisation, which leads to the production of high quality goods and services, is essential to the growth of Small and Medium Enterprises (SMEs).

The Chairman, Senate Committee on Industry, Senator Nnenadi Usman, stated this during a fact finding mission accompanied by lawmakers in the National Assembly to Ethiopia, Kenya and Tanzania.  

She explained that for SMEs to be robust in production there is a need for them to meet the basic standards so that their goods would be acceptable anywhere in the world.
She stressed that the essence of the visit was to boost trade within and outside the region, adding that the basic thing necessary for economic growth is the development of the Small and Medium Enterprises (SMEs).

Usman said the SON has a critical role to play in reducing substandard products in the country and also encouraged other African countries to set up office and agencies to develop and maintain standards.

She said the visit would explore Ethiopia and map out areas of possible collaborations between both Nigeria and Ethiopia in developing and maintaining standards.
“Our SMEs should be revitalised to stop dumping. The way forward is to empower SON to train SMEs to conform to standards this would increase their productivity, expand their business; leading to more income and wealth creation”.

She pointed out that Ethiopia also suffers the same challenges faced by Nigeria in terms of dumping substandard goods but said that Ethiopia has a new way in resolving their challenges which Nigeria must adopt.

She stressed that the major challenge most African countries are facing is the area of import because most importers like to import goods at cheaper prices and said that when African products try to compete in the market, they do not do so well.

“It is cheaper to go to China to make a substandard good than to make a good of standard quality in Nigeria. Most people prefer to use cheaper goods even though it does not last. We have had influx of substandard cheap cables from China where people used to build houses which later resulted in fire outbreak destroying lives and property,” she said.

In her words, “The issue of funding is critical to maintaining standard. We have learnt something about the funding of the agency itself because without fund, the agency will never work properly and it will not produce any result.”

According to her, the summary of the three visits to the three countries showed that they have spent a lot of money to improve their standards and said that they all have well-equipped laboratories that can compete globally.

“I think Dr. Odumodu is doing a great job and if better equipped he would do more because he has the will and the capabilities,” she said.

She said when one organisation should look at standards, ensuring that goods that are substandard do not enter the country, the other must ensure that they collect duties. She pointed out that the act setting the TBS which states that substandard goods that are being imported would attract a court case and a penalty of 100 million Tanzania shillings from the importer and manufacturers.

“We have come out with open minds to see what is happening in Tanzania Bureau of Standard (TBS) to see areas of collaboration to develop standards between Nigeria and Tanzania. We want to see a situation where we can see a stronger bilateral trade between Tanzania and Nigeria. We want to see products carrying made in Tanzania market in Nigeria markets and made in Nigeria in Tanzania market.

Also speaking at the event, the Director-General, Dr. Joseph Odumodu, said Africa is faced with numerous challenges such as dumping of substandard products, stating that there is a new initiative to harmonise standards in Africa. He pointed out that one of the aim of the visit to compare notes on the economic progress of Nigeria and Ethiopia.

“We are also going to other West African countries to compare notes and after that we will able to come out with the way forward for Nigeria. Today we learnt that you now have four agencies plus the regulatory but in Nigeria most of all these things are handled by one party and I think clearly, this is different and it removes what people call conflicts of interest so that it does not become a judge and jury case so clearly it is something we have learnt from this meeting,” he said.

He therefore called on the need for both countries to collaborate in the areas of interest saying that this would create and transfer technology that will make Africa grow bigger and stronger in the world.
According to him, the trade between African countries is less than 10 per cent, maintaining that the continent is not doing enough in terms of trade.

“The more we understand our systems and processes, the more we will be able to trade and this will build our capacity. Trade with European and American countries is over 90 per cent and above so why not trade in areas that we have competitive advantage because it will be cheaper and it will make us grow our economies and this is basically why we are here,” he added.

In his words, “Standard creates commonality and it is because of standard you can have a product that is tested in one country and used in every other place. If for example there is a memorandum of understanding between Nigeria and Ethiopia which means if I test one product in Nigeria and exports it to Ethiopia, it will not undergo any form of testing and vice versa.”
He pointed out that standards are the lowest common denominator for every product that needs to be produced anywhere in the world, stressing the need for a system for testing products to be accepted globally.

He said Africa must come together to set up a system to able to stop dumping stating that the  region naturally has a weak regulatory framework.

“This is why they are dumping substandard goods here otherwise, why are they not dumping in Europe and in America because there consumers are already sufficiently educated and aware but Africa has a lot of illiteracy problems, technology problems, language problems and the like so Africa acting in unison will be a more formidable force to stand up to say no to those country that are dumping products in Africa and I think it will be better done under a strong Africa,’ he said.

The Chairman, House Committee on Industry, Alhaji Muhammed Onawo, said the cooperation between the standards agency and the national assembly, if well connected, will go a long way in helping to improve the culture of imbibing standards.

“I am particularly impressed with what I have seen. It is not about the size of the country, not about the people but the system and willingness of those operators of the system to imbibe good culture although Nigeria is a bigger to Ethiopia but there are things that we can actually achieve if we work together,” he said.
He added that the Nigerian House of Assembly, particularly the House of Representatives, is working on a law for the SON, maintaining that when incorporated, it would help Nigeria in maintaining and developing its standard.

“The problem we have is the power of SON to implement units, we are also not adequately funded and we also do not enough laboratories. Our laboratories need more funding to be able to fight the issue of substandard products in the country,” he added.

He said the prescription of punishment for importation of substandard goods is not meant to punish manufacturers and importers but to deter other people from going into unscrupulous acts.
“What we are going to do is look at what is currently happening to come up with adequate laws and say if anybody is bringing in a substandard good and you just tell him to take it back and if he takes it back he finds another place to dump it," he said.

"I have personally recommended to the organisation that if anybody brings in a substandard product that is likely going to endanger the lives of people, it should be destroyed because if you destroy it, he is going to lose and be prosecuted and would also deter other people from doing this and we have to back this up with laws," he added.

Tags: Business, Nigeria, Featured, SME Development, Good Quality Products

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