SME’s and their environment [Part 1]

In the recent national and economic discussions in the Nigeria of today, the phrase ‘SME’s are the economic power house of any nation’ has been overused, overemphasized, over flogged, overdone, with little corresponding

Lots of promises, policies, seminars and conferences steering this seemingly newly found (always found but never really acknowledged) economic tool. We have been forced as a people to look beyond our Pot of Gold (crude oil) and seek other sources like ‘kettles’ and ‘frying pans’ (SME’s), utensils we always forgot about, because of a previous forgetfulness of a fundamental law of nature, “The Law of Use and Diminishing returns”. Now the pot has been overused, over scrubbed and now it’s got holes in it.

We are desperately doing all we can to plug these leaks while trying to get the other utensils to use. Also forgetting that a kettle might boil water well but a frying pan will never deliver a ‘kokoless amala’ to you, it will be like a bad case of waffles on a pressing iron, it never ends well.

These overpromised SME’s haven’t been provided with the operating environment to make these gestures yield sustainable returns. This is operating under the assumption that a few do genuinely access these opportunities and accommodations provided by the government and parts of the organized private sector. Either they are zero interest loans (which is more of a unicorn fantasy), grants, sponsorships or collaborations, basic infrastructural developments that should allow growth organically are either none existent, poorly managed/maintained or just outright abandoned.

Massive infrastructural deficits are largely responsible for the sluggishness, massive overhead costs and in some cases the extinction of certain businesses in Nigeria, which isn’t just limited to small businesses. Commodities are overpriced due to varying factors, the most populous in our day is ‘the dollar’ excuse, even for a broom seller.

High transportation costs of moving goods and services from one location to another, either due to fuel scarcity, bad road networks which are responsible for the loss of lives and property or traffic jams, which leads to massive loss of man-hours which go undocumented.

Power generation accounts for up to 30% in the overheads of some organizations, in some cases 40%, funds that could be diverted into productive use to expand or hire more employees to tackle the employment scourge, one person at a time.

These factors cascade into spiraling expenses which the end user bears the brunt of most of. And let’s not forget the VAT that auspiciously ties it all up as a nice bow. I am a huge advocate of paying taxes, am also a huge fan of accountability and proper service delivery. Which is where the frustrations of many stem from when the issue of taxes are being raised. Taxes are paid, but the dividends are in a ‘fixed deposit’ indefinitely – benefits are postponed.

Nigeria Leadership Initiative (NLI).He can be reached on doyewole@sentinelconsult.org and www.sentinelconsult.org