NASME helmsman storms CICAN 2020 workshop with importance of NASME

By allcitynews.ng

Worried of seemly marginalisation of the sector despite its role in growing the economy, Dr Adams Adebayo, Chairman of
Nigerian Association of Micro, Small and Medium Enterprises (NASME), Lagos State chapter, stormed CICAN 2020 workshop.

According to him, Micro, small and medium sized enterprises are the major drivers of economies globally, and as such should command a significant amount of attention and resources from governments globally.

Wondering of the neglect of the sector by government, the NASME helmsman pointed out that having acknowledged the pivotal role of NASME, developed countries across the world always nurse and nature the growth of small and medium enterprises.

He noted that recognition of importance of small and medium made developed societies to actively taken steps to ameliorate the impact of shocks such as a global pandemic on these essential growth drivers. 

However, he claimed that historically, financing has been identified as a major challenge for MSMEs – especially in developing countries, even more so in times of economic uncertainty. It is no secret that MSMEs find it a lot harder to keep their businesses afloat compared to larger sized companies.

In view of this reality, the USA is taking steps to secure an additional $250 billion to complement $350 billion already budgeted as relief funds for MSMEs.

Nigeria, however, is currently seeking approximately $7 billion from the International Monetary Fund, World Bank and The African Development Bank to support the economy according to Zainab Ahmed, Finance Minister.

In the event of a successful fund raise from the above listed multilateral agencies, it is evident that $7 billion would be insufficient to cater adequately to the needs of Nigeria and its MSMEs thereby creating the need for alternative funding solutions for MSMEs.

One of such is the NASD Enterprise Portal (NASDeP) which was launched in 2018 to cater to high growth private enterprises.
COVID-19 and intervention measures to keep MSMEs afloat in Nigeria.

Recent news reports say the Minister of Industry, Trade, and Investment, Otunba Niyi Adebayo inaugurated a 10-man steering committee to drive the implementation of the various support schemes for small businesses especially Micro, Small and Medium Enterprises (MSMEs) in the country.

The Minister of State for Industry, Trade & Investment, Mariam Katagum is the Chairman of the committee while the Chairman, First Bank of Nigeria Plc, Ibukun Awosika is the Vice-Chairman.

In a bid to support the growth of MSMEs, the federal government has established a number of schemes geared towards providing finance at low-interest rates.

These include a special intervention fund managed by the Bank of Industry (BOI) to provide subsidized loans to MSMEs at a rate of 9% per annum. Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS) is another intervention funding scheme anchored by the CBN specifically for enhancing agricultural businesses of MSMEs.

The latest of this move is the MSMEs Guaranteed Offtake Simulation Scheme which is aimed at providing bridge financing in supporting the payroll costs of MSMEs that are currently grappling with severe cash flow problems due to the disruptions induced by the global pandemic.

The vulnerable Nigerian MSME sector has been one of the sectors that have been badly hit by the current economic weakness brought about by the COVID-19 pandemic. Several businesses have been affected by supply chain disruptions and low demand for their products and services due to the weakened consumer purchasing power, leading to substantial loss in revenue. In a survey carried out by FATE Foundation in conjunction with BudgiT, of the 1943 MSMEs surveyed, 94.3% reported being negatively impacted by the pandemic particularly in the areas of Cashflow (72.1%), Sales (67.7%) and Revenue (59.2%).

Despite the negative impacts of the pandemic, 47.1% of respondents were positive that their businesses will survive the pandemic with 22.8% being unsure while 30% indicated that their businesses will not survive the pandemic.

Most of the businesses reported needing support with Cashflow (72.1%) and Sales (67.7%) and will like the Government to provide support in the area of funding (89.4%) and access to markets (33.8%).

The MSME sector is the growth engine of any economy contributing to its development, job creation and export amongst others. According to the World Bank, MSMEs represent about 90% of businesses and more than 50% of employment worldwide. Formal SMEs contribute up to 40% of the national income (GDP) in almost the emerging economies.

The latest SMEDAN/NBS MSMEs Survey indicates Nigeria’s SMEs contribute nearly 50% of the country’s GDP and account for over 80% of employment in the country. No doubt, the sector is pivotal to Nigeria’s growth including reducing poverty levels.

However, the sector continues to be weighed down with challenges which ultimately impact the nation’s growth. The sector players, when assessing the underlying issues which MSMEs face and providing insights on this strategically important sector lay more emphasis on the negative impacts.

In the aftermath of the pandemic and as we enter an age of disruptions to traditional business models, traditional approaches to doing business in Nigeria surely must change. Does the Nigerian environment offer a platform that ensures Nigerian SMEs remain competitive,? he asked