Olusola Bello
Renowned Economist, Ayo Teriba has warned that unless Nigeria wakes up and support the Small and Medium Scale Enterprise (SMEs) her level indusrialisation would remain a tall dream and may be hard for her to tackle unemployment.
Dr Teriba who described the SMEs sector as an orphan said unless the government supports the indigenous SMEs they would be extinct very soon because of the competition from foreign owned SMEs that operate in the country.
He gave this warning at a roundtable discussion titled: “Nigeria Economic Recovery post- Covid 19”.
He described SMEs as one segment of the corporate sector and that the problems that SMEs face is not different from the problems any other company big or small faces.
Nigeria SMEs sector he stated can be divided into two, SMEs owned and operated by Nigerians and SMEs owned and operated by non-Nigerians. He noted however that non-Nigerian SMEs are already encroaching on the Nigerian SMEs.
“Go to computer village you will understand what I am saying. the non-Nigerian SMEs have the support of their home governments, unlike indigenous SMEs that are left on their own. The Non-Nigerian SMEs have access to credit facilities from their home governments.”
He said, for instance, the Chinese that in Computer Village in Lagos, their country makes those items, they use to sell to Nigeria SMEs, but now they have arrived to displace Nigerians even in the distribution end.
“Nigerian SME is an orphan, there is no support from the government, it just leaps service,” he stated.
He said If a general statement is made about SMEs, it is those foreign SMEs that are going to benefit because indigenous SMEs have no capacity to benefit, the foreign ones have access to liquidity, supplies, and credits. They can bring the goods to Nigeria on credit.”
“Let us know that unless we solve the problems of Nigeria, or unless Nigeria as a country can back its own people the situation is hopeless.”
And Talking about employees loyalty in Nigeria, he said, “you have employees, all of the foreign businesses that operate in Nigeria, such as Chinese Restaurants, China Town, all those chain stores run by Indians, stationery stores run by Asians, the employees there are loyal.”
He stated that when our own employees go abroad they are loyal because in those environments they make work pay. “But in our environment work does not pay and yet we still expect loyalty.
“Many of the MSMEs are informal sector, how many of them have guaranteed access to energy or transport, health, education, skill or even safety for that matter. In a country where an MBA student is not safe in a hotel room, he paid for. We are not talking of Kaduna -Abuja road, or transit corridors, Idumota or Mile 2 at night, we are talking of a hotel room.”
He said every day we are talking about poverty alleviation, but two, three decades ago, he said India and China were worse than Nigeria. China had 700 million poor people, India experienced total collapse. It was because of their failure and the shame that came with that, they decided to pursue economic reforms. And the economic reforms have paid off for them.
“May Nigeria never descends to the level these two countries descended to. At the end of the day, one asset that they have that Nigeria still does not have is a history of total failure.”
He said unless Nigeria is healthy, nobody is healthy, and we cannot single out either the poor or informal sector.
Unless the country can shell out the money for infrastructure, money for health, education and skills, foreigners whose country can do it for them would come here and displace our own citizens.
He said in the past all that we were doing was producing to sell. Then there were no technological advances that are leading to the collapse of commodity prices. So then, the more you produce, because of the economics of scale, the margins are high, and this defines industrialization, with mass production and push for exports.
He stated that today, those opportunities are no more as industrial producers would not have the profit margin they use to have because of decline in prices.
Nobody, he explained, is going to buy your product but they would rather prefer to buy your inventions.
“In the face of digitization what you get to buy are the soft designs and then with 3D printing, you can fabricate metals on sites, print building, human organs. So rather than somebody producing and importing, no, he may produce where it is needed and what is needed, and this takes the opportunity away from income statement and take it right to the balance sheet because your patent is not products or outputs, but rather your assets. So people are willing to invest in your assets. your skills are your assets and not services, people are willing to attract the best of our skills.”
He said Nigeria should stock her assets, stating that the Philippians train nurses, doctors, sailors, and domestic workers because they know the global fees of those skills and they are supporting them to go abroad
