Vice President Yemi Osinbajo has said the Federal Government is ramping up efforts and incentives, including the Finance Act 2020, to further boost development in the Micro, Small and Medium Enterprises (MSMEs) sector across the country
Osinbajo stated this on Thursday in Abakaliki at the rerun version of the MSMEs Clinic in Ebonyi State, which is the 27th in the series.
Speaking after an inspection of products exhibited by MSMEs in the state, the Vice President said in its effort to address the challenges of and champion the interest of small businesses across the country, the Federal Government will continue to improve the initiatives that are aimed at supporting MSMEs.
According to him, “Small businesses, we all know, are the engines of growth of our economy and this is not mere rhetoric. It is a proven fact. This explains why the Federal Government has worked consistently to enable businesses. These efforts are evident in our Ease of Doing Business reforms which continue to be celebrated not just locally but internationally.
“Aside from that, we have a whole new Finance Act, many of us are familiar with the fact that the Finance Act 2020 introduces a wide range of tax incentives for small businesses and that Act was signed into law on January 13th this year.”
He said the principles in the Finance Act had given concrete expression to what government intends to achieve, adding that the Finance Act, for instance, completely exempts small companies with a turnover of less than N25million a year from Companies Income Tax.
“For businesses between N25 million to N100 million a year, they will now pay Companies Income Tax at a significantly lower rate of 20%, (from the previous 30% rate).
“In a similar vein, the Act now makes it clear that services provided by microfinance banks are exempted from VAT,” Osinbajo said.
Speaking further on additional incentives aimed at enhancing growth in the MSMEs sector, Prof. Osinbajo said “some of these initiatives include; the recently approved $20 million Technology Fund which is run by the Bank of Industry to support young innovators and the technology ecosystem and the N90 billion fund which is provided by the CBN through the National Microfinance Bank for agriculture-based MSMEs and the entire agro value chain.
He said these were not just farmers but all those involved in the agro-value chain were eligible for the N90 billion soft loan which the CBN was now rolling out.
Speaking further on some of the new incentives to support MSMEs growth, the Vice President said: “The rollout of NAFDAC’s e-registration platform and a 75% cost-reduction for product registration is a great opportunity for registering products just at 25% of what it used to cost to register products.
“There is also a partnership between Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the Corporate Affairs Commission (CAC) to register MSMEs en-masse and build a comprehensive database to help plan, coordinate, and deploy policy responses to some of the challenges our small businesses face.
“These are just a few of the initiatives to ensure an empowering and inclusive business environment. We will do our part, but we must work together at all levels, Local, State, and Federal to ensure that our small businesses thrive.”
Speaking on harnessing the gains of the National MSMEs clinics, the Vice President noted that effective collaboration amongst stakeholders including governments at all levels, civil society organisations and others, would enhance sustainable growth in the sector.
“I want to emphasise that it is important for small businesses to take full advantage of the opportunities offered by the MSME Clinics.
“Just as the MSME Clinics provide an opportunity for the Federal Government regulatory agencies to inform small businesses about their requirements and business procedures, MSMEs are also expected to use this occasion to bring up their challenges and problems for possible solution. It is through this symbiotic process that we will be fulfilling the key purposes for the organisation of the MSME Clinics,” the vice president said.
He urged that states keep working with the FG on developing the small businesses sector.
“Just as some other State Governments have done, I would urge the Ebonyi State Government to build on the achievements of this Clinic by considering: the creation of a one-stop regulatory shop for MSMEs in a suitable location in Ebonyi State; the organisation of a State version of the MSME Clinics in various local governments of the State; and by extension getting State regulatory agencies to key into the spirit and letter of MSME Clinics.
“At the Federal level, we are determined to take the MSME Clinics to the remaining States,” he added.
Speaking further on some of the initiatives adopted by the Federal Government to address challenges faced by MSMEs, the Vice President said the Buhari administration will prompt action on many of the issues in the next MSME Clinics update to National Economic Council.
He said: “I assure you that we will take great pains to ensure that all issues affecting MSMEs, especially ‘overzealousness’ by government officials, are addressed comprehensively in order to foster growth and deepen economic inclusion.
“We will also strive to ensure that MSMEs stay informed as to how Federal Government agencies can play an enabling role in advancing their businesses.”
Earlier in his remarks, Governor David Umahi of Ebonyi State commended the Vice President’s unique and exemplary leadership and commitment in ensuring the success of several Federal Government initiatives.
According to him, “I watch Mr. Vice President, there is so much to learn from him, his leadership qualities are inelastic. I have never seen him angry even when we governors carry our personal pressures to him at NEC. There is so much to learn from your leadership qualities, your Excellency.”
Other dignitaries present at the event include: the former Governor of Ebonyi State, Mr Martins Elechi; the State Deputy Governor, Barr. Eric Igwe, members of the State House of Assembly, heads and representatives of Federal Government agencies, amongst others.