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SMEs Sector Development under the Obasanjo Administration (May 1999 – May 2007): Blessing or Curse?

Ugwushi Bellema IhuaDunnhumby Academy of Consumer Research University of Kent, Canterbury

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Content

Preamble Objectives Strides & Successes Drawbacks & Bottlenecks Some Considerations Conclusions

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Preamble Introduction

Ugwushi Bellema Ihua, fondly called Bell’ Hails from Ahoada, Rivers State in the oil-rich

Niger Delta region of Southern Nigeria. PhD Doctoral Researcher at the Dunnhumby

Academy of Consumer Research, University of Kent.

Has worked in Audit, Management consulting and lectured courses in business, strategy, entrepreneurship and finance.

Holds research interests in Knowledge Management, Consumer Insights, Entrepreneurship and SMEs sector development, Youth Unemployment and Poverty Eradication.

Contact me: ubi2@kent.ac.uk or ihuaub@yahoo.com

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Preamble Why Small to Medium-Sized

Enterprises? Their importance cannot be over-

emphasised as they have been identified as the economic hub and engine-room of most developed economies and the Asian Tigers;

They hold the key to transforming less-developed nations;

They play tremendous roles in employment creation, provision of goods & services, and wealth creation.

Personal interest with the sector.

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Objectives To X-Ray some of the SMEs Sector Policy

Reforms in Nigeria between May 1999 – 2007. To identify and discuss some successes &

drawbacks of the policy reforms. To set in agenda, some points for

consideration by the present administration.

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Strides and Successes Overall Awareness

Government seriousness towards plight of SMEs.

Enterprise re-orientation in Nigeria. Spontaneous rise in workshops, conferences,

seminars and expos targeted at the sector. Strengthening and giving voice to SME

associations like NASSI, NASME, SMSI. Assertive statements on the need to develop

the sector as catalyst to the economic growth.

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Strides and Successes

Institutional & Policy Re-Direction National Economic Empowerment and

Development Strategy. Small and Medium Industries Equity

Investment Scheme (SMIEIS) 2001 guideline.

Nigerian Industrial Development Bank (NIDB) re-christened Bank of Industry (BOI).

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Strides and Successes Change from Community Banks to

Micro Finance Institutions (MFIs). National Poverty Eradication

Programme (NAPEP) 2001. Re-Structuring the Corporate Affairs

Commission (CAC) for effective performance.

States’ focus on SMEs sector development as part of their poverty alleviation strategy.

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Drawbacks and Bottlenecks Economic Drawbacks

Impending inadequate access to finance and credit facilities. Change in the SMIEIS policy guideline.

Inadequate infrastructural amenities such as power, effective transport system, good roads, water and so on.

Inadequate mass and co-ordinated markets. Inflation, interest rates and high cost of

doing business. Multiple and arbitrary tax regimes.

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Drawbacks and Bottlenecks

Socio-Cultural Drawbacks Corruption, insincerity and the “get-rich-

quick mentality”. Insecurity of persons and properties

necessitated by high unemployment rates. Problems of negative orientation

associated with loans and debts. Inadequate information dissemination

channels.

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Drawbacks and Bottlenecks Technical Drawback

Inadequate of skilled manpower resulting from lack of training and human resource development.

Policy implementation problems: NAPEP, NDE, Telecomms misunderstanding.

Lack of motivation to stimulate the creative and innovative abilities of our engineers, fabricators and scientists.

Inadequate small business research efforts and the “pure water mentality”.

Inadequacy and affordability problems associated with business advisers and consultants on business strategy, marketing, branding, packaging, exporting and business modelling.

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Cases: Made in China Products

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Cases: Made in Africa Products

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Ghana Export

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Some Considerations Economic Considerations

More efforts needed in the area of funding of SMEs either via MFIs, banks, development institutions and so on.

Government should do more to address the high-cost of doing business.

Inflation and interest rates needs be tackled and reduced to single digits.

Efforts need to be stepped up towards providing better infrastructural facilities. Issues of energy, bad roads, alternative transport systems such as railways should take priority in government activities.

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Some Considerations Technical Considerations

The need further to invest in capacity building and human resource development such as trainings, skills workshops, coaching and mentoring on issues such as packaging, branding, project management, pricing, strategy.

The need for government to fund qualified business advisers and experts to help facilitate SMEs development in the model of business links advisers.

The need for the establishment of more related research institutes, centres and business development organisations.

The need to fund of researches, studies and consulting works to investigate problems and come up with solutions to enhance the development of the sector.

The need for more effective programme and project management & monitoring for SMEs.

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Some Considerations Socio-cultural Considerations

Societal re-orientation towards respect for hardwork and honest gains.

Sincerity and openness on the part of policy makers, institutions, financiers and SMEs owners.

Provision of more channels of information dissemination, especially to the grassroots.

Motivation, encouragement and appreciation of works of ingenuity by our fabricators, engineers and scientists in order to spur them to be more creative and innovative.

Entrepreneurs and owners of SMEs need to consider their efforts as social responsibility to the community and the nation.

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Conclusion SMEs continues to act as catalysts, engine-rooms and

hubs of economic growth and development in developed and developing nations all over the world, and the case of Nigeria shouldn’t be an exception.

If our nation is determined to attain the UN Millennium Development Goals (MDGs) of drastically reducing the poverty level, and achieve our national economic vision of becoming one of the top 20 industrialised nations by the year 2015; then our focus should be on granting pivotal attention to the promotion, development, management and growth of the SMEs sector.

Also see http://www.nigeriansinamerica.com/articles/1926/1/National-Economic-Reforms-in-Nigeria-Did-the-SMEs-Sector-Benefit/Page1.html

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Thank you all for listening