It is a common knowledge that Nigeria is grappling with the problem of high unemployment rate due largely to a number of factors, ranging from lack of a clear cut economic blue print by several Nigerian military and civilian administrations that have piloted the affairs of the country since independence in October 1, 1960.
This situation has made Nigeria rather a consumer nation, instead of being a nation that produces enough for her citizens and surplus for export to other countries to earn the needed foreign exchange. The real sector of the country has continued to remain in the throes of government neglect and insufficient action in this direction. Corruption which fertilizes capital flight and also money laundering, coupled with occasional slump in global oil prices leading to the drastic slide in the value of naira, especially at the nation's black market, have all worsened the inability of the SMEs to flourish and the unemployment situation.
Government has it as a primary responsibility to provide security, shelter and employment opportunities for the people, among other things. Government also has a duty to provide ready and functional micro and huge credits, waivers and interest-free loan facilities to the SMEs to enable start-up or stimulate their production and business operations. The existing micro finance institutions and banks, have not been able to help the SMEs much in this regard. Most of the SMEs are not able to meet up with the credits guarantees often requested by these micro finance institutions and retail banks. They often make the process of the loan facilities so clumsy and cumbersome that the SMEs get discouraged and opt to struggle on their own. In other countries where the task of growing the real sector of the economy are take more serious, these bottlenecks are virtually absent.
But the fact is that Governments alone at all levels cannot provide employment for all and sundry. For the very fact that Government alone cannot give everybody job, it can alternatively provide a favourable environment, which will serve as a springboard for the private sector to take off and function well. Small and medium scale enterprises come under this category.
Some of the operators of SMEs in Nigeria have said that the sector has helped to bridge the unemployment gap in the country, despite the harsh economic environment under which they are operating. The SMEs have therefore been described as the engine room that will transform and grow the economy and put it on the right pedestal.
They criticized the seemingly insensitivity of the Government towards the SMEs, even though the government tends to make it a sing song. But of a fact, the government does not create environment conducive enough for the SMEs to function. They argue that apart from high interest rates which has crippled people’s effort to start SMEs, power supply is inadequate and irregular, the issue of multiple taxation, high cost of legal documentation of credit facilities, both at the State Land Registry and Corporate Affairs Commission (C.A.C), and inadequate capacity building on the part of the SMEs operators in the areas of entrepreneurial ability, have been identified as some of the mitigating factors against SMEs and other relevant real sector operators.
Experts have however been calling on the Government to urgently create a more favourable and conducive conditions, not only for the SMEs to function and help to grow the economy, but also to monitor and coordinate the development and operation of the SMEs. This, they can do, by making sure that the operators possess the entrepreneurial ability to pilot this sector, generate revenue and create employment opportunity that will remove many unemployed youths off the streets.
The multiple taxation is one of the factors that discourages many people from establishing SMEs. A situation where the operators will face huge tax burden from the Federal Inland Revenue Services (FIRS), State and Local Governments tax bodies, often cripples the growth of this sub-sector. There is the urgent need for Government to harmonize the taxes to encourage operators. Although the federal government led by President Muhammadu Buhari has so far adopted some creative measures to tackle the challenges facing the SME operators in the country since his government came to power in May 2015, the government should realize that it is not yet uhuru for this critical segment of economic players that are actually the life wire of the country's economic growth and development.
The several intervention programmes and policies by the Buhari administration, through the Central Bank of Nigeria (CBN), the SMEs and other Agro funds like the CBN Anchor Borrowers Fund and the establishment of NIRSAL Micro Finance bank, owned by CBN and other banks, are all commendable steps in this regard. But it is of very significance that the Buhari government should pay attention to the establishment of functional Industrial Parks and not building Model Markets all over the cities of the country. This gives the wrong impression that the economy is not yet ready for production but more disposed to importation. SMEDAN, the federal government agency responsible for the SMEs should be made build more SME Industrial Production hubs to encourage the SMEs to thrive.
Government also should organize and facilitate programmes that will link the operators to get financial support from both internal and external sources to modernize the sub sector by having adequate technology and requisite skill that will be an added advantage. The newspaper and indeed the helpless SMEs have the opinion that transforming and industrializing Nigerian economy is very possible. And for the country to achieve macro economic growth in a few years from now, micro, small and medium scale enterprises must be well entrenched and supported by the government. Regular power supply is needed which will also be available so that the operators would not close shops or operate at almost zero profit. NNL.