BY KENNETH EZE
The Micro, Small and Medium Enterprises segment in Nigeria has been called upon to look beyond the shores of Nigeria and explore opportunities abroad, with corporate governance.
Nerus Ekezie, the Ag. Executive Director/CEO at the Institute of Directors, and an MSME enthusiast, made the call in a telephone interview with The Point.
He harped on the place of good corporate governance and proper documentation for MSMEs who desire success, albeit locally or globally.
He opined that strategy is vital to success in business. And top on the list of the banes of the MSMEs in the Nigerian market, he placed lax or no documentation at all, which is the main characteristic of poor corporate governance.
“Besides proper documentation and packaging, SMEs need to imbibe the culture of good corporate governance in their day-to-day operations,” he said.
He expressed the opinion that strategy is paramount for any business that wants to succeed, irrespective of the market or segment on which it is focused.
“Strategy provides the roadmap for businesses, big or small. Each business should have a clear outline of the products and markets it desires to produce and serve, respectively,” he pointed out.
He also expressed the opinion that no business can aspire to branding or raising funds without a plan on how to go about it and what to do with funds, if raised, even with financiers, looking for businesses to support.
He said, “Whoever wants to help the MSME to thrive in Nigeria should start by encouraging them to embrace corporate governance. This simply means that they need to be more transparent, honest in disclosures to stakeholders, while remaining accountable in their dealings in order to enhance their company’s image in the public eyes.”
On product packaging, branding and access to funds, he posited that each business must pay primary attention to identification of opportunities. That should precede packaging, “because, opportunities identified should guide on what to produce and how to package them,” he said.
The building plan must precede the structure. As he further pointed out, “it is when a business has a clear idea of what need to satisfy that it can conceive and package product or products to serve that purpose for value, which would determine profitability. Consequently, the business can know when more funds are needed, based on forces of demand and supply. Anything else, might tilt towards, borrowing to consume,” he said.
To buttress his point, he challenged The Point to take a count of how many businesses within the MSME segment in Nigeria who can boast of any form of feasibility studies, asserting that majority of them don’t have.
“This is the major difference between MSMEs in Nigeria and their counterparts in the developed world. The Central Bank of Nigeria or other financiers can, and do have funding plans for this segment, but how many of them in Nigeria can meet the requirements of accessing the funds. Most of them will fall short on documentation, corporate governance,” he said.
He encouraged MSMEs to think global from the conception of business ideas. That way, they will know that quality is not the prerogative of mega corporations or businesses listed at the stock exchanges only.
Ekezie stated the views succinctly. “Corporate governance practice is now for all organisations irrespective of size or status. It is no longer the preserve of quoted companies and big corporations alone. As the business world continues to shrink into one single global village, it has become more essential and compelling for all SMEs to play along in the governance environment if they have to be recognised in the global business space. And doing so will influence patronage, positive performance, sustainability and competitive advantage.”
Some of the things that can help MSMEs attract necessary funding to boost operations, as Ekezie pointed include governance principles, and building good reputation which will win public confidence and endearment. “As part of the governance principles, building and maintaining good reputation will enhance corporate trust for business success, enhance potential investors confidence and pave the way for growth,” Ekezie said.
