SMEs Sector Development under the Obasanjo

Administration (May 1999 – May 2007): Blessing

or Curse?

Ugwushi Bellema Ihua

Dunnhumby 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.
 Currently responsible for providing Consumer Insights to
several SMEs within the South-East England region.
 Has worked in Audit, Management consulting and lectured
courses in business, strategy, entrepreneurship and finance.
 Holds research interests in Knowledge Management,
Entrepreneurship and SMEs sector development, Consumer
Insights, 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’s 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 and associated problems.
 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”.
 Inadequate incentives and motivation for
Innovators, fabricators and engineers.
 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 South Africa
Products

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 Ghanaian Experience: Online
Exporter

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 Cases: Ghanaian Fashion and
Pineapples

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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.
 More needs to strengthen, support and properly equip
our institutions and agencies such as SMEDAN, NAPEP
with the needed resources for more effective service.
 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
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.
 Creation of more channels of information dissemination on
SMEs incentives and policy benefits at the grassroots level.
 More needs to be done to address the challenges of
unemployment and security concerns within the nation.
 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

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 Thank you all for listening

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