Rebecca Ejifoma writes that given the effect of COVID-19 on SMEs, the Revv programme is set to mitigate the effect of the pandemic on about 10,000 small businesses across Nigeria
In Nigeria, Small and Medium Enterprises (SMEs) have continued to contribute their fair share to the growth of the country. According to reports, SMEs employ over 80 per cent of the country’s total 90.5 million labour force, contribute 48 per cent to Nigeria’s GDP and constitute over 80 per cent of registered exporters in Nigeria.
But despite the huge potential they possess, they remain largely bedeviled by a number of problems with limited financing options being one of the main drawbacks they face coupled with the recent ravaging effects of the COVID-19 pandemic.
SMEs Prior COVID-19
In 2017, long before the outbreak of the COVID-19 pandemic, the SME sector was doing well. In fact, the sector – comprising approximately 40 million SMEs – was doing so well that it contributed an estimated 48 per cent to Nigeria’s Gross Domestic Product (GDP), and employed 84 per cent of the country’s entire workforce according to a 2018 National Bureau of Statistics (NBS) report.
This is no small feat. GDP is an important indicator of a country’s economic power; it is the aggregate value of the goods and services produced by a country within any given year. According to the NBS, Nigeria’s 2017 GDP was worth about N113.7 billion. Of that amount, the SME sector contributed 48 per cent; that’s two percent short of half the total amount. This value that the SMEs provide that ensures the smooth running of the country is why they are referred to as the bedrock of the economy.
Ravaging Effect of Pandemic
All this was before the pandemic and the accompanying lockdown that resulted in an unprecedented economic tailspin affecting business operations, consumer spending, loss of jobs and livelihoods. SMEs are no longer doing well. According to a survey published by the Fate Foundation and BudgIT on the ‘Impact of COVID-19 on Nigerian MSMEs’, 94.3 per cent of the total 1,943 respondents said the pandemic has negatively affected their business.
The report further states that among the businesses still managing to stay afloat, 72.1 per cent cannot find the cash flow to continue running their business, and 59.2 per cent p are struggling to increase their revenue base.
When asked in what area they want to be supported, 72.1 per cent answered with cash flow; 67.7 per cent said they’ll need support to make sales; 89.4 per cent want the federal government to provide them with funding; 33.8 per cent need access to markets; 74 per cent want the private sector to support with funding; and 62.9 per cent want business support.
Recently, MTN Nigeria came up with a novel initiative tagged The Revv Program to mitigate the effects of the pandemic on small businesses across Nigeria. Working with relevant stakeholders, subject-matter experts and the company’s executives, MTN Nigeria aims to support over 10,000 small businesses through The Revv Program.
Chief Executive Officer, MTN Nigeria, Ferdi Moolman, at the virtual launch of the programme called on large corporates to join MTN and “strongly position themselves to support SMEs as a foundation to the growth of a stronger economy going into 2021 and beyond”, saying “The Revv Programme is our way of standing with SMEs in their journey to rise through these challenging times”.
Adopting a four-pronged approach that includes masterclass sessions, support with productivity tools, access to market and advisory initiatives, the programme seeks to help SMEs relearn, readjust and retool their businesses. The masterclasses, which commenced immediately after the launch of the programme, focus on core areas of business management as part of a broader strategy to uplift the SMEs.
This will be followed by the selection of The Y’ello 200 (two hundred top-performing SMEs from the sessions) that will enjoy exclusive access to a broad range of technology and productivity tools and services absolutely free, for a period of six months. They will also receive productivity support to enhance their business performance, in addition to access to MTN’s media assets for product marketing, which will open up new market opportunities for their business’ growth and expansion.
Speaking at the launch of The Revv Program, Nigeria’s Minister of Communications and Digital Economy, Dr. Isa Pantami, enjoined private and public stakeholders to support SMEs to bounce back, saying “it is our collective responsibility” to transform Nigerian entrepreneurs, most especially those in the micro, small and medium enterprise sector.
Pantami’s colleague in the Ministry of Industry, Trade and Investment, Otunba Adeniyi Adebayo, CON, was optimistic that The Revv Program will address “the foundational digital needs as well as other skills such small businesses need to develop; these include access to information, infrastructure, funding and new markets.”
The Revv Programme will not be the first time MTN is supporting small businesses in the country. In 2018 the company launched the viral “Man In The Box” campaign with commendable outcomes for SMEs in the country. The idea was to support small businesses with technology solutions and create awareness for them by showcasing their businesses in the “Box” to the entire world.
For 24 hours and for free, selected businesses were showcased within the “Box” on LED screens, and across MTN’s social media platforms. Man In The Box was a huge success; it awakened Nigerians to the enormous untapped possibilities that litter the SME space. SMEs that were featured in the “Box” told amazing testimonies of how they witnessed growth and increased patronage of their businesses.
Again, MTN has proven to be that reliable support that’s always there for SMEs in Nigeria. Like what happened with the ‘Man In The Box’, The Revv Programme will not only see small businesses increase their sales, but will aid dying businesses suffering from the drastic effect of the COVID-19 pandemic brought back to life.
Access to Right Funding
Majority of the small businesses affected by the pandemic are facing funding problems. The first masterclass, themed “Accessing the Right Funding for Your Business”, addressed this need. MTN Nigeria’s Chief Financial Officer (CFO), Modupe Kadri, together with other subject-matter experts threw light on ways SMEs can access funding from investors, and the role a properly managed cash flow system plays.
“Anybody that wants to advance some securities to you will want to know the strength of your cash flow management; how you generate the income streams and how you’re going to keep the lead on that. Same thing also applies to your costs.”
“Compliance is key. From the start, make sure you have the proper structures; set up your businesses and register them properly; be tax compliant, because ultimately these are some of the requirements investors will check before injecting funds. If you’re able to sort that out in the early stages, you will be presenting yourself as a serious minded business owner who will attract the right kind of funding,” according to Kadri.
The Executive Director, Commercial Banking, Ecobank, Carol Oyedeji, says a business wanting to raise capital must show strong managerial skills of its cash flow, among other things. “There must be records showing the business has been doing well. So you must keep your books well. Also, how the loan request is presented matters. Then you must show that you also generate more money than you put into the business.”
A federal agency that has been very instrumental in assisting SMEs in getting funding is the Bank of Industry (BOI). The bank’s Executive Director on SME, Shekarau Omar, said it is easy to get funding from the BOI when you understand that though the fund is provided by the government, it however remains limited, and so you have to know how to compete for it with other serious-minded small business owners.
As we transit to a post-COVID environment, small businesses that had their cash flow affected by the pandemic and are looking for new sources of income will have to pay attention to these tips. The good thing is, it does not matter how bad the pandemic may have affected their success, business will soon shape up for SMEs, especially the 10,000 small businesses to benefit from The Revv Programme. And with that they will continue to provide the much needed backbone for Nigeria’s economy.