Ugo Aliogo examines the growth prospects of Micro, Small, and Medium Scale Enterprises (MSMEs) in the country
The need to train more artisans to acquire skills that will drive development in the country, has become inevitable as Nigeria lacks sufficient skills in repairs and maintenance from various fields. Organisation also need to invest more in their corporate social responsibility programmes in order to train more people to bridge existing skills gap in the country.
Tackling Skills Deficit
Commenting on the skills deficit in the MSMEs space, the Founder, Field of Skills and Dreams (FSD), Mrs. Omowale Ogunrinde, stated that a lot of the manufacturing industries that are doing well usually engage the services of foreign experts, adding that tertiary institutions and training institutes don’t teach students technical skills that would be useful for industries.
She also asserted that in the last 18years, the training school has been providing professional and technical training for unemployed youths, and they have realised that as the students are given professional training, they get jobs immediately in the labour market.
Ogunrinde said: “For the past 18years, we have been providing professional and technical training for unemployed youths. We have realised that as we give them professional training, they get jobs immediately. I recently reviewed a report which showed that we graduated 68 technicians on June 15 and everyone of them is in a well-paying job. For most of these jobs, we have no connections with the employers, we give them the letters, ensure that our students have the skills and they go for their interviews and selection process and they are given the jobs to start immediately. The organisation confirms with us and we give our endorsement. We are not an agency that connects people to jobs; we provide the skills that grant these guys access to jobs. In the electrical installation department in the school, we realised that many of our students who had gone through five years of training in higher institutions don’t have practical knowledge of anything in that space. So the question is how many people are going to employ them? If they are employed their services will not be required in the technical skills department, but administration department.”
The FSD founder argued that tackling the skills deficits requires training university graduates in professional technical skills programme to ensure that they are employable in industries.
She remarked that many of the students after going through the school’s intensive training programme become reluctant to go for internship programmes; therefore they decide to setup on their own and employ others to work for them.
In his reactions, the Director-General, Nigeria Employers’ Consultative Association (NECA), Timothy Olawale, stated that efforts have been in place to tackle the skill gap in the MSME space, while pointing out that 12years ago, a survey report revealed that most factories had a deficit with regards to mid-levels and lower-level skills requirements.
He argued that the skills gap is very wide despite the availability of technical school and polytechnic graduates that should fill space, “we discovered that they passed through the school, but the school didn’t pass through them.”
He maintained that many of those graduates had paper qualifications, but they were not job-ready and jobs that are skills driven require practical experience.
According to him, “We introduced the interventions of the technical skills project that we are partnering with the Industrial Training Fund (ITF) on. Our focus is to identify our partners such as FSD that are willing to make available their training centers for us to support these MSMEs with equipment and funding, so that they can train these youths on these skills that they are deficient in society. We are not only focusing on the factories, because even when you train for the world of work, there is a limit to how much you can train which is why most of them are really relevant especially those of them that focus on the daily skills of the MSMEs, so that these youths can become employers of labour.
“We have had wonderful testimonies when we graduate these students; however you can only do the much your funding capacity can take which is also one of the reasons why we are showcasing the model to the federal government to expand the capacity to accommodate more youths. The jobs are available, but the capacity is lacking. Another area, we have discovered is the digital space which keeps increasing and there is a knowledge deficit. It goes beyond being able to use the computer and our youths are not ready. We need to help them by giving them those requisite skills.”
Record keeping and Governance Culture
The FSD boss explained that for every training organised at FSD, the focus revolves around teaching business owners’ management strategies, book keeping, bankable finance, and others.
She added that as part of the provisions of the curriculum, the other phase of the training focus on teaching the students skills that would help them to access jobs in terms of teamwork, communication, grooming and etiquette, the mindset of an entrepreneur, and others.
She posited that the school provides training for the students in the areas mentioned above because “we want them to understand that by the time they are going to startup on their own, they should understand that business is different from personal affairs.”
Continuing, Ogunrinde stated: “We usually organise a two-day vocational conference known as emerging entrepreneur to support MSMEs. The conference doesn’t talk about vocational skills, but the only section that focuses on vocational skills is the mentoring session, where we bring resources persons to talk about the challenges they faced in business, agro-allied, ICT, food science technology and how they were able to overcome those challenges.
“The focus of the training is to help emerging entrepreneurs understand what is required to scale up their businesses, management strategies and under it, you have things such as Business Model Canvass (BMC) that gives you the understanding and clarity on what you need to do.
“BMC is pictorial information that describes your business just at a glance. It has nine major aspects which include value proposition, channels, revenue streams, target size or market, raw materials sourcing, key activities, key partnership, cost structure, and others. It is designed in such a way that you either go from left to right or right to left. It was an enlightening conference so when you are even talking to them about the business model canvass and how they need to put things into perspective, it is not as if they didn’t know, but they don’t have access to information and education.”
Market Growth and Business Performance
The NECA boss explained that the economic growth of a country is premised on MSMEs, adding that it goes down to the root and takes care of the disadvantaged and vulnerable.
He espoused that businesses prefer to stay longer as MSMEs because it insulates them against regulatory gangsterism, “even those in the formal business space don’t have pleasant experiences. So when you occupy your space as an informal business, you still have your relief.”
MSMEs and Insurance Policy
He remarked that the issue was not about adopting insurance policies, but queried the end results of those who even insured and if the insurance policy came through for them after the destruction caused by the #ENDSARs protest.
“We understand that some businesses were not compensated because the insurance companies said they defaulted in the prompt payment of premium. Even those that paid there were so many issues of technicalities which we felt should not even come up. For us, as business people, it is very simple, if you insure a building and it was attacked and looted, there is a value to it. All I expected was for the insurance company to compensate me so that I can get back to business, but instead, we started seeing different technicalities that you insure the building, not the content, which was aligned to the owner of the business, the facility was insured against fire and natural disaster not against looting. I’m saying it is not good to take up insurance policies, but there must be clarity about what the expectations are in the event of any form of hazard.”
Challenges of MSMEs
In defining the problems facing MSMEs, Ayeni was of the view that one of the major problems of MSMEs is a lack of access to finance.
He argued that government support to MSMEs is still very low and when they even provide intervention funds for MSMEs don’t get to those who need the finance, and at other times, the processes are cumbersome.
According to him, “There is a particular machine needed for servicing air conditioning, it is known as AC Service station and it is sold for N1.5 million and the highest loan I have received for LSTE is N250, 000.
“Another challenge facing MSMEs is lack of knowledge sharing. Most business owners don’t like sharing knowledge with their workers so that those workers cannot grow and understand the trade properly, the owners enjoy hoarding such knowledge. As a result, when the business owner is not around everything is put on hold, which is not supposed to be.
“There is also the issue of lack of division of labour is a problem also facing Small businesses. You find out that in most small businesses, the business owner handles everything in the organisation, without delegating duties and functions to his workers and that affects the business, especially when the owner is not around.”
In her remarks, Ogunrinde argued that the major challenge for MSMEs is the absence of the requisite information that would be needed to start setup and sustain viable businesses that would have a multiplier effect on the economy.
She hinted that many MSMEs are looking for access to the right information, the market for their products, and who needs their services.
“Most people are of the view that MSMEs are looking for capital and the most important things to them are capital. There are some businesses that don’t require anybody’s money to setup especially when you are selling intellectual capacity. So even before you offer your service, they have paid you ahead of time. So MSMEs require access to the right information that will help them to scale up the business. Access to information is the important thing that is lacking in our economy and that is what FSD has positioned itself to do to support MSMEs,” she stated.
Addressing Challenges
In addressing, the problems facing MSMEs, Ayeni called for the provision of loans with low-interest rates, and improving the ease of doing business which he said would translate to having the enabling environment.
He said: “Government needs to reduce the taxation for small businesses. The few days we have been here, we have been paying taxes to different government agencies. Another area in which government will help us is to see how they can regulate the auto spare parts market that is infiltrated by crafty and dubious businessmen. Most of the auto spare parts we have in the market are substandard and they are brought from China. This is the time for the agency of government to step in and regulate the problems in that sector.”
The NECA DG stated that in positioning the MSMEs for growth, there is a need for government to review the ease of doing business indices and address them one after another.
He stressed that access to capital is very critical to the growth and survival of MSMEs, adding that there is a need to free capital for MSMEs.
“There are a lot of windows that the federal government has created through the Central Bank of Nigeria (CBN) unfortunately they are political windows that the MSMEs find difficult to access because of the bottlenecks and conditions that different MSMEs cannot meet. There is need to review those conditions and make it easy for them to be able to enjoy the benefits in all those schemes.
“Importantly, there is need for experience sharing, our policymakers and implementers should create that forum where they listen to the MSMEs and share experience, and they take learning points from them on what they are going through in business. But what we have done today is that representatives of government feel they know what is good for MSMEs without getting feedback from those concerned.”
