SMEs as solution to employment and income distribution challenges

The 20th edition attracted captains of industries, entrepreneurs and some world business leaders from within and outside the state. It was the second time Nigeria hosted such global event and the first time the international business gathering was held in the Niger Delta region.The conference was organized by the World Association for Small and Medium […]

The 20th edition attracted captains of industries, entrepreneurs and some world business leaders from within and outside the state. It was the second time Nigeria hosted such global event and the first time the international business gathering was held in the Niger Delta region.
The conference was organized by the World Association for Small and Medium Enterprises (WASME) and also had in attendance the President of WASME, Alhaji Babale Girei, the Director-General, Security and Exchange Commission (SEC), Ms. Arunma Oteh and the United Nations Aids Ambassador and Chairman/Co-Founder of Africa Rising Foundation, Mr. Ndaba Mandela.
The World Association for Small and Medium Enterprises (WASME) has been spearheading the development of Small and Medium Enterprises (SMEs) the world over since its inception in 1980. WASME enjoys consultative/ observer status with agencies in the UN system such as ECOSOC, UNCTAD, WIPO, UNIDO, UNICITRAL, UNESCAP, ITC and ILO.
It also cooperates actively with several intergovernmental and international organizations and its Mission Statement calls for WASME to be a strategic resource centre for SMEs, to foster international co-operation, to encourage linkages among SMEs and governments and to provide leadership to make SMEs competitive.
The DG of SEC, who played significant roles at the conference, decried the endemic nature of poverty and unemployment in Niger Delta and Nigeria. She dwelled on SMEs as a potent tool in curbing the embarrassing poverty and unemployment levels in the country.
She observes that SMEs are of critical importance to the growth and development of a nation especially countries with significant employment and income distribution challenges.
Ms Oteh said: “SMEs do not only contribute to GDP growth and creation of decent jobs, they also enable inclusive growth due to the broad-base population participating in the economy. Globally, SMEs account for over 95 per cent of the business population, constitute between 60 to 70 per cent of employment and contribute between 50 to 60 per cent to GDP.”
She observes that governments worldwide are increasingly recognizing that SMEs are drivers of entrepreneurship, growth and job creation as well as an effective tool for poverty alleviation and inclusive growth.
The DG explained that such realization informed the Federal Government to establish the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in 2003 to promote the development of micro, small and medium enterprises in the economy.
She further lauded the Governor of Bayelsa State Seriake Dickson for according SMEs their pride of place in the state through a number of initiatives such as appointing a special adviser on SMEs and dedicating a special fund of N20bn for small businesses.
“He has a partnership with Lagos Business School, with Niger State University and other partners around the world so that entrepreneurs can get the skills they need to promote their enterprise in a particular sector. We understand that there is a technology incubation centre in the state. Bayelsa State has a youthful population, so there are things for the older people, there are also things for the younger people to do.
“This is a state that God has blessed in many ways with oil and gas with sea around it. So fisheries is an important sector, agro businesses is also important. There are many areas where you can have many good businesses, so I am glad that the government is providing this support, and also drawing attention to the business opportunities that you can have in Bayelsa,” She added.
Ms Oteh identified some challenges of SMEs in the country which includes lack of robust business incubation systems. She urged states including Bayelsa to move from SME-support to effective business incubation system, which speeds up the process of starting and growing companies and provides entrepreneurs with expertise networks and tools needed to make their ventures successful.
She cited the examples of Isreal, United States of America and Brazil as countries where incubation programmes and the ecosystem they engender have helped to diversify economies, commercialize technologies, create jobs and build wealth.
She noted that through SMEs, Israel has attracted venture capital all over the world adding that Isreal, a country smaller than Bayelsa, has more companies listed on NASDAQ than the whole of Europe and invented some of the widely used technologies in the world.
Ms Oteh said the USA has remained a role model for countries seeing to boost SMEs contributions to their economies. She recalls that as far back as 1953, USA enacted the Small Business Investment Act which set up the Small Business Administration (SBA) to deliver loans, loan guarantees, contracts, counseling and other forms of support to SMEs.
“One of the earliest incubation centres to benefit from such support is located around the South Bay portion of the San Francisco Bay Area in Northern California, the area we today refer to as Silicon Valley.
“Silicon Valley today remains an enduring ecosystem for the development of SMEs into large and successful companies comprising 33 universities and colleges, three government agencies and hundreds of venture capital funds all working in synergy to support start-ups”, she said.
In Brazil, she said SMEs represent 98 per cent of existing companies, employ about 60 per cent of the active population and contribute a quarter of the Brazilian GDP.
Ms Oteh added that Nigeria has understood the importance of SMEs observing that through MSMEs, many programmes and initiatives have been launched at various levels to spur the development of small businesses such as the National Enterprise Development Programme (NEDEP), the Youth Enterprise with Innovation in Nigeria (YouWiN), the N220b CBN MSMEs fund and the innovative $15million venture capital fund targeting software developers set up by the Ministry of Communication Technology.
In the capital market she said SEC is conscious of the importance of SMEs and that is why the commission is working very hard to build a world-class market that supports nurtures and enables them to continue growing.
Minister of Trade, Industry and Investment, Dr. Olusegun Aganga, represented by the Director-General, SMEDAN, Alhaji Bature Masari, commended the state’s untiring efforts at developing the entrepreneurship and building the capacity of enterprises in the state.
He noted that SMEs provide employment opportunities to 32.4 million Nigerians and stressed the need for all stakeholders to tackle the problems facing the sector.
In a keynote address, the United Nations Aids Ambassador and Chairman/Co-Founder of Africa Rising Foundation, Mr. Ndaba Mandela, said SME is the centre of any economy and the foundation is established to ensure, that young people have access to technology and information to empower themselves and take full advantage of the opportunities that exist.
The World Association for Small and Medium Enterprises’ (WASME) annual International Conference on Small and Medium Enterprise development (ICSME) is a prestigious annual event, which brings together under one roof business support organisations, policy makers, banks and financial institutions, international experts, academics, entrepreneurs, UN and other international and multi-national aid agencies involved in small business development.