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SON in the Eyes of SMEs
An in-depth survey on the perception of the operators of Small and Medium Enterprises provides a rear insight into workings of the Standard Organisation of Nigeria, writes Dike Onwuamaeze
How does the operators of the Small and Medium Enterprises (SMEs) perceive the services provided by the Standard Organisation of Nigeria (SON)? This question was the subject of a recent survey that was carried out by the Lagos Chamber of Commerce (LCCI), in collaboration with the Centre for International Private Enterprises (CIPE). The finding of the survey was published in a report titled, “Perception Study: Efficiency and Impact of Regulatory Activities of Standard Organisation of Nigeria on SMEs.”
The SON is a standard regulatory organisation that was established to ensure that all manufactured products that are made in Nigeria and those that are imported into the country are of good international quality?
According to the LCCI, the survey was commissioned, “to understand the perception and experiences of MSMEs regarding the operations and efficiency of the SON and to advocate for regulatory improvements that will facilitate the post COVID-19 economic recovery through institutional reforms to minimize corruption and strengthen efficiency in the regulatory environment of the SON.”
It added that the study was carried out in four locations namely Lagos, Aba in Abia State, Onitsha in Anambra State and Kano.
Its key findings stated among other things that the SMEs surveyed in the study were aware of the SON and its services and have constant interactions with the organisation.
The report showed that most of the SMEs that were interviewed have limited knowledge of the regulatory services that were offered by the SON. It noted that 69 per cent and 56 per cent of the respondents respectively identified “product quality standards” and “ensuring quality” as being the most popular services that were rendered by the SON to the SMEs.
Also, 84 per cent of the SMEs that were surveyed said that product testing and inspection were there main reasons for interacting with the standard organisation.
According to these SMEs, testing and inspection of products is a vital requirement for producers and importers to verify that the items they would be taking to the markets are of high quality and could satisfy international standards.
The report also revealed that office visit is the most common method of communication between the SMEs (at least 75 per cent of them) and the SON. The justification for office visit lied upon convenience, quest for updated information and the opportunity to negotiate the service fees. “This shows that the SON processes in terms of service payments are questionable as their as there should not be for negotiating a fixed fee,” the report said, adding that “the SMEs also think that the website does not give up to date information, indicating that the SMEs lack confidence published information.”
The report also showed that the use of intermediaries in dealing with the SON is prevalent in Lagos and Anambra at 41 per cent and 24 per cent respectively. According to the report, “one third of the SMEs surveyed use intermediaries,” who are also current staff of the SON, because they think that the SON’s operational processes are complex and time consuming. Hence, they prefer the consultants to take that burden away from them.”
The report further showed that “most of the SMEs make payments to SON via the bank, however, a notable proportion (25 per cent) of the SMEs reported paying through the SON’s staff account. This shows that some SON’s staff employees may be engaging in dishonest conduct when discharging their duties.”
In addition, “over 40 per cent of the SMEs reported that they had to pay additional monies to resolve their challenges (while) 45 per cent of the SMEs had to engage the services of a third party while 35 per cent of the SMEs reported resolving their challenges via a superior officer or authority.”
The report also showed that over 60 per cent of, “SMEs reported delays in getting the services they needed from SON while 30 per cent of the SMEs also complained that they rarely meet the SON staff on ground when they visit their offices and it is also hard to reach them on telephone. Another 30 per cent of SMEs reported that they had to pay additional unofficial fees before accessing SON’s services.”
In general, the survey discovered that 65 per cent of all the organisations that were interviewed and engaged with the SON are in the manufacturing industry. Only 5.0 per cent of other businesses engaged in exporting, compared to 30 per cent of other businesses that imported.
This revealed a positive outlook on the Federal Government of Nigeria’s initiative through SON to promote locally made goods, to not only meet and satisfy the needs of Nigerians by reducing the number of defective products but also to ensure that the products can compete in global markets.
This was attested to by some SMEs who commended the realization of government’s intents through the SON by highlighting that the agency is committed to supporting the growth of SMEs while ensuring that ‘they’ adhere to the set standards and quality levels of goods and products.
A Kano based respondent said: “The SON mission is to ensure that goods and services produced in Nigeria meet up with the national and international markets.
“The SON, as the name implied, is a body that takes care of standards and makes businesses to conform to the maximum standard requirements of Nigeria.”
Data gathered from the survey revealed that manufacturing companies that participated in the survey produce wide range of products such as agricultural products, fast moving goods and plastics.
The data also showed that manufacturing industries are prevalent in Abia and followed by Kano and Lagos. “This would appear to be supported by the numerous good manufacturing practices sensation seminars reported by SON in Aba, the economic hub of Abia State that is well known for its ‘made-in-Aba’ products.
“The data also appears to support the high priority that the Nigerian federal government gives to Aba-made products and small and medium-sized businesses in promoting high quality, locally made goods to advance the Nigerian economy.”
However, most SMEs participants in the qualitative interviews expressed that they experience delays in receiving accreditation or licensing, and this for them is a major challenge.
A respondent in Onitsha, Anambra Stae, said: “There is always a delay before receiving the needed certificates. It is time wasting. Sometimes they (SON) will tell you three months… and sometimes after three months you will still have to wait before you go on to the next stage.”
The SMEss also believed that the SON is more concerned with protecting consumers than businesses. A participant in the survey’s focused group discussion in Lagos who shared this view also called for a level playing ground for all. “If we get protection from regulatory bodies in Nigeria, it will be nice. There is need for a taskforce that will hold everyone accountable. This is because those who are ‘big fish’ tend not to follow the rules. They tip one or two people and they will remain business.”
Another participant in Kano said: “I think that the SON isn’t actually concerned about protecting businesses. So, they are checking quality because of the people (consumers) that patronise the business, but they are not checking for the sustainability of the business; they don’t check for other competitors who would be using lower quality. So, they are not offering the business protection. They are only concerned about the other people (consumers). So it will be good if they can leverage that gap.”
Overall, the report showed that the SON is playing a strategic role in sustaining the vibrancy of the Nigerian manufacturing sector through the promotion of the manufacture of quality products.
Yet, the influx of fake and substandard products into the Nigerian market has remained a growing menace for the Nigerian economy, particularly the local industry.
The report said: “From Lagos to Aba, Kano and Kaduna, the Nigerian market is flooded with counterfeit products from Asia, mainly China. Some of the commonly counterfeited products in the local markets are textile, and leather products.
“The continued importation of these illicit products does not only stifle the local market but also cripple local initiatives and creativity.”
The report also observed that the influx of substandard products affect genuine local producers negatively and made customers to pay exorbitant prices for low quality goods.
Moreover, the illicit trafficking of counterfeited goods negatively impact government’s revenue through lost taxes and customs duties, especially when they are smuggled into the country.
The report emphasised that production standard must be met, both for the sake of domestic consumers and for meeting global norms. It is essential to ensure that appropriate quality goods are available in the markets to take advantage of trade agreements like the African Continental Trade Area (AfCFTA).
It added, “Standardisation can be an effective way to increase productivity and efficiency, since it defines expectations, formalize processes and creates accountability for business.”
The report recommended to the federal government that, “the ordeal of imitated products and sub-standard goods and services have lowered the confidence of domestic and foreign customers, which government needs to revive with policy to boost the credibility and acceptability of SON badge as emblem of quality in global space.”
It further recommended that, “the SON should be in the front burner of agencies that Nigeria’s government should promote in the face of global communities with a view to increasing the acceptability of Nigeria made goods in global markets.”
It added that the SON is highly understaffed, therefore, “government should invest heavily in infrastructures and equipment that would assist SON to function effectively and efficiently.”
The President of the LCCI, Dr. Michael Olawale-Cole, explained that the research was carried out in 2022, by the LCCI on the processes of the SON. Olawale-Cole stated that based on the strategic plan and reforms agenda being implemented in the agency, it is imperative that players in the public and private sectors must effectively collaborate to achieve a shared goal of creating an enabling environment.
He said: “We advocate for the ease of doing business and the transformation of Nigeria’s institutions towards making them effective and supportive to private businesses, especially SMEs and generally to be globally competitive.
“The findings of the study revealed that SMEs are mostly small businesses with local focus, businesses that are unaware of all the services provided by SON or other regulatory bodies in Nigeria.
“Similarly, SMEs lack adequate knowledge of the guidelines, processes, utilisation of technology/resources provided by SON. Consequently, unscrupulous officials take advantage of the ignorance of the private sector operators to demand for unreceipted/unofficial payment thereby casting aspersion on the entire agency.” He added: “We are pleased to acknowledge the commitment and cooperation of SON’s officials in driving through this process for a win-win situation for business and government.”