The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has stated that the Micro, Small and Medium Enterprises (MSMEs) policy review is awaiting approval from the Federal Government.
This was disclosed on Thursday in Abuja, by the Director-General of SMEDAN, Dr Dikko Radda, during a meeting with the Commerce and Industry Correspondents Association of Nigeria (CICAN).
The SMEDAN DG disclosed that the MSME policy was initially developed in 2006 in partnership with the United Nation Development Programme (UNDP) and was later reviewed in 2010 and 2015.
- “We are reviewing it again and have concluded everything about the policy. We have done the validation and have received input from stakeholders in the MSMEs ecosystem. It was presented to the Ministry of Industry, Trade and Investment and for the Federal Executive Council’s approval. It is still awaiting approval to bring into effect the new MSMEs policy in the country.”
Mr. Radda added that major areas of the reviewed policy include the classification of MSMEs based on turnover, as well as manpower. He noted that a major challenge facing MSME’s in Nigeria was packaging their products for export, citing the inclusion of the Export Facilitation Programme, which orientates small businesses on brand strategies, regulatory challenges, including products packaging and quality control for export.
He said the reasons for the scheme was to prepare Nigerian businesses for the African Continental Trade Agreement (AfCFTA) which would go into effect from January 2021.
- “We have quality products in Nigeria but most of the problems MSMEs face are lack of proper branding and quality control of their products as well as regulatory issues. Nigerian MSMEs have regulatory issues that are challenging in terms of National Agency for Food and Drug Administration Commission (NAFDAC) registration, Standards Organization of Nigeria (SON) certification and products registration. Through the project, the MSMEs are being enhanced.”
What you should know
Nairametrics reported in August that Partner & Chief Economist at PwC Nigeria, Andrew Nevin (Ph.D.), said even though the SMEs employ over 80% of the country’s workforce, the start-ups in Nigeria hardly get to the point where they are valued at over $1 billion, because the uncertainties of doing business in Nigeria are quite high.
According to him, SMEs entering the formal sector means higher productivity and monitored payment of taxes. Yet, entry into the formal sector is still a choice most small businesses do not want to embrace due to the economic environment. He was quoted saying:
- “… if the cost and complexity of entering the formal sector is too high, then the SME will elect to stay in the informal sector with all the attendant issues, including that they can be subject to harassment by the authorities. These type of statistics always tell us the sector is huge, but it is huge because it is too difficult to grow big companies, so this is not a sign of strength. The best structure for the economy is to have strong large companies that then create room for SMEs to be part of their ecosystem.
- “Large companies raise standards (look at the quality of Dangote companies for example) and raise productivity and create opportunities for others, so large SME sector is a sign that business is too difficult because if Nigeria was functioning correctly, we would have 100+ Dangotes in the Economy.”