James Emejo in Abuja
The Managing Director/Chief. Executive, Nigeria Export-Import Bank (NEXIM), Mr. Abba Bello has said the federal government’s current efforts to diversify the economy and achieve rapid economic growth under the Economic Recovery and Growth Plan (ERGP) will be unrealistic without proper focus and policy responses to the issues and challenges affecting the growth of the small and medium scale enterprises (SMEs).
He therefore argued that though poor financing had often been identified as a major constraint to the optimal performance of the sub-sector, yet, “improper project conception, coupled with poor project implementation and poor management practices, which essentially are issues of innovativeness and entrepreneurship development, rather than those of access to finance,” remained the bane of small businesses in the country.
Speaking while delivering a keynote address titled: “SME Innovativeness and Sustainable Growth: Issues, Challenges and Way Forward for Nigeria,” at the SME exhibition and international investment forum in Lagos, he listed other challenges to include poor access to market, poor record keeping, lack of corporate governance practices and absence/lack of proper business plans.
He added that infrastructure, including access to roads, power, water, among others further constitutes critical problems for the sector.
However, “while these are often cited as problems and challenges impacting SME growth and development, these to me also present opportunities, though for medium to large organisations, where the private sector could tap into through public private partnerships.
“Once these issues have been addressed, entrepreneurs will have access to finance and incidents of business failure will reduce, while sustainable growth and development can be achieved.”
According to Bello, SMEs are known to record a higher rate of business failures as about 80 per cent of start-up projects are unable to survive the first five years of operations due to identified obstacles.
Yet, he said about 37 million MSMEs in the country employ about 60 million Nigerians and deserved adequate attention by government to achieve meaning impact on the economy.
However, he said the NEXIM had developed some funding schemes, specifically targeted at the small-scale exporters.
He pledged continuous support to SMES through financial support to exporters in the bank’s target sectors of manufacturing, agro-processing, solid minerals and services.
According to him, since the inception of the bank in 1991, over 1,000 SMEs had been supported, many of which had grown from start-ups to become enlisted among the top 100 exporters published annually by the Central Bank of Nigeria (CBN).
He added: “However, often times, many of the target beneficiaries find it difficult to access the funds simply because of their inability to come up with bankable projects, which essentially is a problem of poor entrepreneurial education, rather than lack of finance.”