Ever-increasing numbers of women in Nigeria have been choosing small-business ownership in an apparent attempt to escape their well-documented inequality in the labour market. With the just-released data from NBS, it was estimated that the overall number of persons in labour force was 80 million out of which males were 41.6 million while females were 38.6 million.
According to the statistics, it obviously shows that women are marginalized in the labour market. With the marginalization in labour market, some women decide to try other areas of expertise which is moving into small and medium enterprises. However, there are some challenges faced by women who want to venture into SMEs in Nigeria. In this article, we try to list some of the barriers affecting women in small and medium enterprises.
Lack of Skills
Lack of skills has been one of the challenges women face when starting a successful business. It has imbibed in them inferiority complex that they lack the capability to succeed. Nevertheless, such mindset must be altered as there is nothing unfeasible to accomplish in life, all it entails is a positive mindset and determination. Everybody must not be naturally skillful, there are proficiencies you need to learn on your own. You can pay to learn or enroll in free online courses to equip yourself.
Moreover, some commercial banks are offering free SME training, The likes of Zenith bank plc is offering free online training on exportation business. The idea of the training is to give anyone finding it difficult on the nature of the business to venture in a heads-up.
Traditional & Societal Limitation
Traditional and societal limitation is another barrier some women encounter when starting a business. Some traditions believe a woman is meant to stay at home and take care of the children & the household, such norm has left a lot of women depressed and frustrated in their marriages. As a woman, if you are facing such limitation, it is imperative you have a heart-to-heart conversation with your spouse, convince him of the importance of you having your own means of income and the financial ease it will have on him.
Issue of Unforeseen Circumstance
The issues of unforeseen circumstances have been one of the major issues affecting women from owning a business. A vivid example was what some businesses faced during the Covid-19 lockdown and vandalization of some people’s businesses by miscreants during the EndSARS protest. These incidences left some business owners’ bankrupt.
However, to avert such, it is advisable to get your business insured to a premium package. Premium packages cover 70% of your business from risk
For some women, what causes constraint for them when it comes to creating their own business is the issue of patriarchy and gender inequality. This ideology portrays men as dominant in the business world as women are meant to take care of the home.
Furthermore, some men believe that once a woman becomes too successful, she might become uncontrollable. This principle has kept some women at home as they have had to depend on their spouse to provide virtually everything they need. It is important for a woman venturing into a business to strategize how to balance family & business soas to reduce the possibility of such issues erupting.
Lack of humility
According to T.S Eliot, “The only wisdom we can hope to acquire is the wisdom of humility”. Some women have the mindset of having up to millions of naira before they can set up a business. Such mindset has kept a lot of women jobless. It is important to start with the little capital you have as you will be surprised how the business will surge & flourish in the years to come.
Lack of knowledge
Before venturing into any business, it is important to have a good knowledge of what you are going into which is the act of navigating. Thorough investigation, navigation, and knowledge of a business you want to go into is very vital, to prevent the issue of wasting your resources and time.
A lot of women make that mistake of not having a good knowledge of what they are going into, such businesses usually go down the drain within 6 months to one year. It is crucial to navigate and find out if the business is worth venturing into. Ask yourself these salient questions; who has done it before? what are they doing right? what are they doing wrong and what can you do differently in order to excel once you start yours? If you are not able to answer these questions you might end up making the same mistakes every other person is making.
Fear of failing
Another factor that women need to look out for when starting a business is a negative mindset. They feel the business they want to venture into is an extensive one. One key thing to note is, there is no business without a competitor. Your focus should be on how to revamp your business to stand out. For example, you are in a community, you want to go into tailoring, and everybody is going into tailoring around that locality, the question should be what will be my unique selling point? Or you are in Lagos state where event planning is a lucrative business, and everybody is going into it, the question should be what can I do differently to stand out? You will see some of the people saying, if you are looking for an event planner, Event by Bisi is top-notch.
Not opened to critics
Business is not always rosy especially at inception, negative reviews might come in from customers. Such reviews should not deject you rather it should inspire you to re-strategize and reshape your business. Customer’s review is important as their opinion matters for business owners. Once you noticed that your customers are not patronizing you like before or you are facing customer retention issues, the first thing to do is to find out what their reasons are. And the best way to find out is through a review. We are in a digital age and there are software and applications that enable you to determine your customers’ behaviour. Aside from that, you can put a call through or send messages across to your customers and potential customers to find out ways to serve them better. Also, you can put a Q/A on your social media business pages to get your customers’ feedback as it will help you to revamp your business.
Lack of finance
Lack of finance has been a major issue hindering women from starting a business. The good thing is that banks are offering loans to women going into SMEs in Nigeria. Some of these banks have special loan packages with a very low-interest rate. Their criteria are; Have a registered business, open a business account, and run it for 6 to one year. That way you will be qualified for a business loan.
Poor business structure
Poor business structure has led some women to close their businesses. It is essential to have a business module and hire competent hands to help your business to flourish and assist with the seamless running of your business. An example is hiring a salesperson, logistic persons, an accountant, social media specialist, etc.
AfCFTA: The underlying principles, objectives and benefits
The fears around the issue of dumping and border security should not outweigh the huge benefits that AfCFTA offers to the member-states.
The Agreement (the “Agreement”) establishing the African Continental Free Trade Area (the “AfCFTA”) has continued to generate discussions following the commencement of trading under the new economic bloc. The Agreement was signed on 21 March 2018 at the Extra-Ordinary Summit of the African Union held in Kigali Rwanda and came into force on 30 May 2019 after the Gambia became the 22nd State to ratify it.
Nigeria signed the Agreement on 7th July 2019 and after initial dilly-dallying, ratified it in November 2020 leading to the formal deposit of the Instrument of ratification before the 05 December 2020 submission deadline. Paradoxically, Nigeria (34th member State to ratify the treaty) who was at the forefront of developing and negotiating the AfCFTA Agreement later became jittery at the point of ratification. The initial hesitation has been explained on the basis that prior consultation with the manufacturing community and other stakeholders was needed before ratification.
COVID-19 pandemic delayed the phase 2 negotiations and commencement of trading under AfCFTA which was earlier scheduled to start on 1st of July 2020. Trading eventually kicked off on 1st January 2021 and it is too early to assess the impact of trading yet particularly as some countries are yet to ratify the treaty. The AfCFTA has been lauded as a game-changer and ambitious project capable of lifting over 30 million people out of poverty on the continent, through trade liberalization and economic integration in line with the Pan African Vision (Agenda 2063) of an integrated, prosperous and peaceful Africa.
In terms of structure, the main Agreement is divided into 7 Parts and 30 Articles. In addition, there are Protocols, Annexes and Appendices which equally form part of the AfCFTA Agreement. Three of these Protocols are (i) the Protocol on Trade in Goods (ii) the Protocol on Trade in Services, and (iii) the Protocol on Rules and Procedures on the Settlement of Disputes. Article 8 of the Agreement is to the effect that the Protocols, Annexes and Appendices shall, upon adoption, form integral of the Agreement.
The Phase Two Negotiations for both Trade in Goods and Trade in Services include (i) the Protocol on Investment (ii) the Protocol on Intellectual Property and (iii) the Protocol on Competition Policy as well as the associated Annexes and Appendices. As common with most treaties, the AfCFTA Agreement is expected to be organic as future amendments and updates are possible, provided that any additional instruments deemed necessary are to be concluded in furtherance of the objectives of AfCFTA and shall upon adoption, form an integral part of the Agreement.
Modelled after the principles of the World Trade Organization/General Agreement on Tariffs and Trade and General Agreement on Trade in Services (WTO/GATT/GATS), the AfCFTA has some of the trappings of custom union and common market even though one of the AfCFTA objectives is the creation of Continental Customs Union at a later stage. Conceptually, economic integration is broadly classified into five stages, viz: free trade area, Custom union, Common market, Economic union (single market) and Political union.
One key feature of Custom Union being the acceptance of a unified external common tariff against non-members. The European Union presents a unique example of the Customs Union through the instrumentality of the Union Customs Code which applies a uniform tariff system for imports from outside the EU. Unlike the Custom Union, the AfCFTA under its rules on Most-Favoured-Nation Treatment allows member States to conclude or maintain preferential trade arrangements including different tariff arrangements with Third Parties provided that such trade arrangements do not impede or frustrate the objectives of the Protocol on Trade in Goods. By default, WTO member countries trade based on conditions laid down under GATT. It is in a bid to address the tariff and non-tariff barriers existing under the WTO, that some regions have opted for more favourable trade deals as seen in Europe, Asia, North America and now Africa.
As with any WTO-based trade treaty, there are key non-exhaustive underlying principles that underpin the AfCFTA. Some of these principles will form the subject of our discussions in subsequent publications. These include (i) the Most-Favoured-Nation Treatment and (ii) the Rules of Origin. Whilst the former mandates the State Parties to accord preferential treatment to one another, the latter spells out criteria for goods that will be eligible for preferential treatment under the AfCFTA. Equally important is the Anti-dumping and Countervailing Measure which provides trade remedies and remedial actions against imports which are detrimental to local industries. In relation to the Trade in Services, the Most-Favoured Nation exemptions afford State Parties a margin of leeway to exclude certain sectors or sub-sectors from their Schedule of Commitments and limit market access to those sectors or sub-sectors.
The overarching objective behind the AfCFTA is the elimination or reduction of tariff and non-tariff barriers amongst the 54 Countries that agreed to be members of the bloc by providing a single market for goods and services, facilitated by movement of persons in order to deepen the economic integration and prosperity of the African continent. This key objective is to be achieved through successive rounds of negotiations that are to be done in phases.
In specific terms, the Agreement also seeks to (i) lay the foundation for the establishment of a Continental Customs Union; (ii) promote and attain sustainable and inclusive socio-economic development, gender equality and structural transformation of the State Parties, (iii) enhance the competitiveness of the economies of State Parties within the continent and global market, (iv) promote industrial development through diversification and regional value chain development, agricultural development and food security, and resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes. In order to actualize these noble objectives, Article 4 of the Agreement mandates State Parties to:
- Progressively eliminate tariffs and non-tariff barriers to trade in goods;
- Progressively liberalise trade in services;
- Cooperate on investment, intellectual property rights and competition policy;
- Cooperate on all trade-related areas;
- Cooperate on customs matters and the implementation of trade facilitation measures;
- Establish a mechanism for the settlement of disputes concerning their rights and obligations; and
- Establish and maintain an institutional framework for the implementation and administration of the AfCFTA.
There is no doubt that the actualization of these objectives will put Africa on the part of economic posterity and industrialization. It is expected that each State Party should demonstrate commitment, sincerity, and integrity in dealing with other member States. The success of the European Union and other similar regional trade blocs has shown that with the right political will and commitment from member-states, regional trade deals as seen in AfCFTA often contribute to the economic development of the participating region.
The AfCFTA is the world’s largest free trade zone since the establishment of the WTO in 1994 and offers a lot of benefits to member States particularly those with competitive advantage and enabling infrastructures. Africa has a population of 1.3 Billion people and a combined GDP of over $2.6 Trillion (more than 6 times of Nigeria’s GDP). According to the Brookings Institution’s report, intra-African trade accounts for 17 percent of Africa’s exports compared to 59 percent in Asia and 69 percent in Europe.
The report projected that the removal of tariffs if well implemented could boost intra-regional trade up to 50 percent by 2040, from the current 17 percent. Nigeria has a competitive advantage in a number of sectors and stands in a position to benefit from the newly enlarged market. This will further increase investment in the distribution and logistics supply chain as cross-border trades will spiral up. Nigeria’s increasing unemployment rate of over 30% which has been made worse by the pandemic is expected to reduce when trading starts in commercial quantity.
The AfCFTA will progressively reduce trade tariffs by over 90% by 2022 and by extension address the increasing inflation and infrastructural deficits within the continent. Nigeria, being the largest economy in the continent with strong service sector should position itself to benefit from the economies of scale that will follow the localization of industries. Oil refineries, cement, agriculture, food processing, minerals, banking and financial services, aviation, information technology and legal services have been identified as some of the critical sectors where Nigeria has competitive advantage.
The fears around the issue of dumping and border security should not outweigh the huge benefits that AfCFTA offers to the member States. Rather, this should be a wake-up call for Nigeria to invest heavily in rail and road transport, port infrastructure, border security, internal security, electricity, education, and other enabling infrastructures. The last border closure was largely attributed to the issue of dumping and security as it was alleged that Nigeria was amongst other things being swamped with fake and sub-standard goods mostly from Asian countries through the Benin Republic.
The AfCFTA Rules of Origin provision is meant to address this, and it is hoped that the AfCFTA member States should demonstrate the political will to ensure strict compliance. While the regime of Trade in Goods appears to be taking shape, particularly with the commencement of trading early this year, the progressive framework for the negotiations of specific commitments by the member-states in the area of Trade in Services, should afford Nigeria the platform to ensure that the service sectors benefit from the huge opportunities provided under the AfCFTA.
Prince I. Nwafuru, MCIArb (UK)
Repricing of yields reduces activity level in January
For foreign investors, outflows fell to N30.8bn (US$78.3m) compared with N48.8bn (US$124.5m) in December.
Based on the data released by the NSE on Domestic & Foreign Portfolio Investments for January 2021, total value fell 13.7% m/m to N232.5bn (US$590.8m) from N269.2bn (US$687.1m) in December 2020. Furthermore, total value declined 1.27% y/y to N232.5bn (US$590.8m) in January 2021 from N235.5bn (US$600.8M) in January 2020.
Activity level among domestic investors decreased 7.2% m/m to N184.9bn (US$470.0m) while foreign investor transactions also took a dip, down 32.0% m/m to N47.52bn (US$120.78m). Domestic investors still retained dominance of trading activities on the local bourse as their share of total transactions in January stood at 79.6%.
On the domestic front, transactions were dominated by institutional investors who traded N117.5bn (US$298.6m) while retail investors executed transactions worth N67.4bn (US$171.4m). Notably, the volume of transactions declined 14.9% m/m at the institutional level contrary to an increase of 10.16% m/m at the retail level.
For foreign investors, outflows fell to N30.8bn (US$78.3m) compared with N48.8bn (US$124.5m) in December. In the same vein, foreign inflows decreased to N16.7bn (US$42.5m) in January from N21.1bn (US$53.9m) in December, resulting in a net outflow of N14.1bn (US35.7m) compared with a net outflow of N27.6 (US$70.5m) in December.
Looking ahead, for as long as yields in the fixed income space continue to rise, the equities market will continue to take a hit in our view. In the near term, we believe good corporate earnings and dividend announcements will support some stocks in the equities market. We, however, expect FPIs to retain apathy towards the Nigerian market in the short term, though the inability to source FX for repatriation may continue to force reinvestments.
CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.
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