In spite of numerous social intervention programmes and entrepreneurship support funds of successive governments, aimed at giving incentives to grow the Small and Medium Enterprises sector, a sizeable number of operators and budding entrepreneurs have continued to lament the difficulty in accessing the funds.
They alleged that some of the government agencies responsible for the disbursement of such grants had either been failing in the discharge of their duties or misappropriating the
funds. Some of the operators told The Point that the failure of government to address these issues and fulfil its support promises, would perpetually keep most SMEs comatose.
Checks by The Point revealed that some of the agencies responsible for the disbursement of funds/grants to SME operators include the National Board for Technology Incubation, the Presidential Standing Committee on Inventions and Innovations and the National Economic Reconstruction Fund, among others.
Speaking in separate interviews, operators argued that the untoward development would not have occurred if successive administrations had been prudent or proactive in managing the funds. The President, Nigerian Association of Small-Scale Industrialists, Mr.
Leye Lawal, who alleged that most of the NBTI’s incubation centres were fraudulent, said government ought to have monitored and ensured prudent management of the funds released to the agency when they were released. The NBTI had been set up in 1993 as Nigeria’s central agency to support small business development. The office serves to help new companies begin operations by linking management, financial capital, technology, labour and resources to build commerce.
With 27 Technology Incubation Centres spread across the six geopolitical zones of Nigeria, the incubation process at NBTI begins with the admission of a value-added technology
based enterprise into a TIC and ends with graduation after three years of resident incubation. At the TIC, shared facilities (working spaces and offices), hands-on
management assistance, access to finance, networking and exposure to critical business, technical and legal support services that enhance the success of enterprise during incubation are provided.
But Lawal, who is the Managing Director, MYO Products, a food company, expressed bitterness while narrating his experience at the Lagos Incubation Centre, Agege. He said that the negligence and deceit exhibited by the Federal Government or the management of the centres, led to the collapse of his company.
He said, “In any sane environment, government should not make promises it cannot keep. We came in with an understanding that after five years, we would leave the centres and collect grants to build our businesses, but that never happened after 10 years.
“After spending about N5 million on my factory to meet the requirement of the National Agency for Food and Drugs Administration and Control, I was chased out of the centre.”
Lawal lamented further, “When we were chased out, I could not afford to secure another space because property is expensive in Lagos. I had to shut down production and laid off
staff. I was there between 2000 and 2013. It was impossible to survive because I had spent so much on the business.
“It is only in Nigeria that entrepreneurs would invest in their businesses, pay for power, water and other amenities in an incubation centre and still be chased out empty handed. The management used a lot of political tricks to frustrate us out of the centre.” Other operators argued that if the government had fulfilled its promise of creating a level playing field for entrepreneurs, the impact of the current economic recession would not have been this severe, because SMEs are the engine room of any economy across
the globe.
According to another entrepreneur, Mr. Sam Obi, the development, which is forcing the small players to compete in the same market with their blue chip counterparts, leaves a sour taste in the mouth. Like his counterparts, Obi, who was supposed to benefit from the
Enugu Incubation Centre, and was involved in the manufacturing of shoes, bags and belts, had also been forced to close shop.
A frustrated Obi told The Point that the management of the Centre promised that the Federal Government would give them seed capital, which was supposed to come in form
of grants or soft loan, but they never saw any. He said, “I was operating from my house before I was asked to come to the Centre with the promise that after three years of growth, I will be given money. After sometime, I found that the promises were mere political gimmicks.
The FG failed us and militated against entrepreneurs. The Centres are not set up with the mindset of delivering value or support, because the deliverables are not clearly spelt out.
“As a result, some people spent more than 10 years in the facilities. I think the centres are mere industrial parks, because they failed to deliver. Initially, we had power, but it stopped and we had to contribute to generate power ourselves. They were even supposed to provide us with secretariat services, but all to no avail.”
To the Managing Director, Green Leaves, Chief Tunde Oluwole, the Centres spread across the six geopolitical zones of Nigeria, the incubation process at NBTI begins with the admission of a value-added technology based enterprise into a TIC and ends with graduation after three years of resident incubation.
downward trend in the price of oil in the global market, which in turn led to high exchange rate, had pushed up the cost of raw materials and made the atmosphere frustrating for small players. Like Lawal and Obi, Oluwole, who manufactures agricultural grinding and mixing machines, was also forced to stop operations.
He disclosed that he had already concluded arrangements to travel overseas to make a case before his company’s foreign partner/financiers for possible extension of deadline for the loan his company was earlier awarded. He said, “We borrowed heavily Infrom overseas to fund our operations, but because of the crisis, occasioned by the dwindling fortunes of the naira, we cannot afford to settle the debt now.
“The closure of the Retail Dutch Auction System Forex window by the Central Bank of Nigeria adversely affected the company and other players in the real sector. The FG should support the real sector, by giving grants to companies or subsidise borrowing, by slashing interest rate.” He added that it was unfair for small companies to compete in the same market with bigger firms, who would not feel the impact so much.
DON’T WAIT FOR GRANTS -Experts
However, a top source in one of the agencies of the United Nations, who preferred anonymity, warned Nigerian entrepreneurs against collecting or waiting for grants or loans from either the government or the private sector. While admitting that such funds could alleviate the stress of raising working capital, he insisted that most of the financial institutions would not give loans to entrepreneurs they did not stand to benefit from. He said, “While the interests on the loans are counter-productive, grants from either government or private institutions are likely to be mismanaged. Charity remains a charity. What happened to the grants or bail-out packages given to operators in the textile and aviation sector by the government?
“Besides, who screened the applicants and their ‘great’ business ideas before being given such grants? Entrepreneurs have all they need to transform the economy.”
Also, the Director, Research and Innovation, University of Lagos, Prof. Wellington Oyibo, explained that there should be a caveat on grants. According to him, such support should be for entrepreneurial fields that require innovation, where prototypes are being developed.
He added, “Support for SMEs is all about risk. Life is a business and there is no free lunch anywhere. If that is not and we keep supporting entrepreneurs, nobody will take you
serious.
“If you have an investment, you will watch over it. If it has to do about your fund, you won’t need any other person to tell you before you take it serious and handle it accountably.”
Oyibo, however, noted that, while SMEs were the drivers of the economy all over the world, business owners must commit something to their businesses. “If the cake is for you, you must bake it and when you bake it, you can protect it,” he said.
