Asian countries have used SME development as a catalyst for economic development. Nigeria is set on following the example.
Small business owners say consumers have cut back on spending due to the bad economy

Nigeria’s government says it wants to address the challenges that face small to medium enterprises (SMEs) and has planned fiscal interventions for this year through the national economic and reconstruction fund. TradeInvestNigeria interviewed some managers of SMEs based in Abuja to find out if the government policies designed to improve their business environments have been effective. 

Victor Egbe is the managing director of Imagination Tools, an IT company that mainly focuses on computer software development and also provides solutions for small businesses, micro-finance institutions, schools, government agencies and hotels.

Ibe Eze is the sales manager of Fealth Building Finishings Ltd, a construction company mainly involved in installing roofs, windows, tiling and ceilings in buildings.

Gbolade Azeez is a branch manager of Godindos Nigeria Ltd, a retail company that operates clothing boutiques and distributes fabrics.

What challenges face your business and how do you think they can be addressed?

Victor: The success of Imagination Tools depends on adequate and efficient power supply, Internet services and human resources, all of which are problematic. Lack of power is adversely affecting our industries that have been forced to buy generators. In software development you cannot use generators because the noise level is not good for our business. Past political leaders tried to fix the power problem but couldn’t. I must say the power situation has eased a bit under the current administration. 

In most countries Internet services are affordable and fast, but not in Nigeria.  We are paying exorbitant monthly fees to Internet Service Providers (ISPs) to receive a sub-standard and unreliable service. 

Finding qualified personnel to work in the huge computer software market is another challenge undermining the development of the industry. The professional bodies, which should be addressing this issue, are only interested in collecting huge annual subscriptions from members and thus killing the industry. I paid only N70 000 to subscribe to a Microsoft programme that has given me access to many valuable tools that the local professional body is selling at N250 000. We are a small business enterprise and they are not encouraging us at all. The government should pass laws to regulate the excesses of ISPs and professional bodies.

Ibe: The business environment is tough and the building and construction industry is  experiencing especially hard times. Our clients now prefer to get fittings to finish built houses straight from the manufacturers where the prices are obviously lower, thereby eliminating distributors like us. This is a big challenge and it can be solved if the government can quickly address problems beleaguering the manufacturing sector in order to stimulate growth. A lucrative manufacturing sector means distributors can get cheaper goods and pass on the benefits to consumers down the line. 

Gbolade: The economy is bad and people are generally complaining of lacking disposable income, and this can be confirmed by the unusually low sales we have been experiencing in our clothing boutiques for some time now. The government must make more effort to further improve the economy in order to help small businesses.

What are the positive changes that have taken place in your business environment in the last decade?

Victor: There have been many positive changes in the ICT sector over the past few years. Among the positive developments is that the government and private companies such as micro-finance institutions that previously imported software are now buying locally. This has greatly helped our software development business to expand.

Ibe: Kudos to the Nigerian government for introducing GSM and carrying out reforms in the telecommunication sector. Recent reforms in the banking sector, which involved recapitalisation and consolidation, have absolutely boosted the confidence of depositors and investors.

Gbolade: There are more people engaged in business now indicating that the economy is getting back on its feet.

Do you think the government has put in place adequate incentives and programmes to promote domestic investors?

Victor: A lot of issues such as financing, infrastructure and security arise when you mention incentives.  If investors do not feel safe how are they going to do business? The government has to address issues of this kind because it is becoming very embarrassing for the country and discouraging investment.  Easy access to credit would immensely benefit domestic investors who are now suffering because banks are very reluctant to lend. The government should especially speed up the implementation of the programmes and policies designed to spur the growth of small businesses, which contribute greatly to the economy of any country.  

Ibe: Approving bills that then become laws is not a big hurdle. The problem lies in the implementation of those laws. Past governments came up with so many ideas, agendas, programmes and bills but today we are still suffering. We just want our current president to stay focused and work for the overall good of the people and development of Nigeria.

Gbolade: I do not think Nigeria has put in place adequate incentives because if they have done so, domestic investors here could have invested heavily thereby creating jobs for citizens. The bill is a good one with good intentions but the government has to put in place those incentives and quickly.

There is a general election coming up next year. Do you see this process affecting businesses?

Victor: Definitely, ICT will play a role in the upcoming election. The Nigeria Computer Society recently held a meeting to discuss how ICT can positively impact the political process and the opportunities available for operators in this sector.

Ibe: I do not really see the process affecting my business but the government’s huge budget for Nigeria’s 50th anniversary celebrations, in my own opinion, is wasteful expenditure.

Gbolade: I do not think the process will affect my business because there will always be an election no matter the kind of business you are in.