Dike Onwuamaeze
The federal government is set to provide a legal framework that would position Nigeria as the gateway for franchise development in Africa and enable the country tap into the immense potential of franchise business to bolster the growth of its economy.
This was disclosed yesterday in Lagos, by the Minister of State, Federal Ministry of Industry, Trade and Investment (FMITI), Ambassador Mariam Yalwaji Katagum, during the launch of the pilot program of “Franchising as an Investment Alternative for Lagos MSME’s.”
The United States of America’s Department of Commerce Report had in 2019 projected that Nigeria has the potential of earning $100 billion annually from franchising.
Katagum said Nigeria, “with a population of about 200 million, is the most populous country in Africa and has the potential to become the gateway for franchise development in Africa.”
She added that the federal government was working through relevant Ministries, Departments and Agencies (MDAs) to deepen collaboration with relevant stakeholders to address some regulatory clauses and disclosure documents of the Franchise Bill it would send to the National Assembly for passage into law.
The minister of state, who was represented at the ceremony by a Deputy Director, Industrial Development Department of the FMITI, Mrs. Olumuyiwa A. Ajayi-Ade, said the, “Industrial Development Department of my ministry will deepen the existing collaboration with the National Office for Technology Acquisition and Promotion, an agency promoting regulatory roles, control of foreign technology into the country, to chart a way forward with other relevant stakeholders like government MDAs, private and developing partners in addressing some regulatory clauses and disclosure document of the Franchise Bill to be sent for passage by the National Assembly.”
Katagum added: “The federal government is committed to improving the business environment in the country, as franchising allows not only expansion but an empowerment tool, which can benefit start-up companies and develop Nigeria’s SMEs to bring about growth and sustainable development in the economy.
“Today, there are a number of emerging and developed economies that have embraced franchising as an effective means for job creation. For example, South Africa, whose economy is comparable to Nigeria’s, generates 12.5 per cent of its GDP from franchising.”
In her welcome address, the Special Adviser to the Lagos State Governor on Sustainable Development Goals and Investment, Mrs. Solape Hammond, described the franchising industry as a quiet achiever with amazing contributions to many national economies around the world.
Hammond added that although the market demand for the franchise industry is growing by as much as 30 per cent each year in the global markets, “majority of Nigerian businesses are still not aware of this option and how they could access this space.”
But, “interestingly, the Lagos State Government has woken up to smell the roses” and is currently “encouraging investors to set up franchises in Lagos because of our healthy business climate.
“For many businesses, franchising is an excellent route to growth, opening up new opportunities and markets. Particularly in a society like Nigeria where company reputations are highly valued, therefore, operating under a trusted brand name puts one ahead of the competition in many ways.” she said.
In a presentation on the “Lagos MSMEs Franchise Framework Development Initiative,” by the Lagos State Office of SDGs and Investment in partnership with the Founder of the Frandis Forum, Mr. Tayo Adedugbe, said the goal of the initiative was, “to support the development of franchising as a viable model for helping MSMEs scale their business, attract investments, expand across the state and internationally and create new jobs while stimulating and diversifying the economy.”
The components of the initiative, according to the presentation, included a workshop for 300 Lagos MSMEs on franchising and capacity building as well as franchising awareness, process and structures. This would lead to “selection of 20 MSMEs from the 300 MSMEs with the highest potential to expand into a franchise for Franchise Support and Roll Out.”
