Small and Medium Entrepreneurs (SME’s) have sought the intervention of government to help increase their capacity so that the sector could connect resourcefully in export of their products to heighten governments non-oil sector export drive.
At the moment the sector claims it lacks sufficient export potential muscle except determined effort is made to strengthen its processing capability in order to make it compete in the international market where price disparity has impeded its competence.
An industrialist and the chief executive officer of SPECTRA Nigeria Limited whose firm is promoting the development of industrial cluster initiative in Nigeria Chief Duro Kuteyi in an interview with the Leadership noted that Nigerian SMEs do not possess the ability to export their products in the face of stiff competition in the global market.
Export he said was a big business and risk bound of which our SMEs cannot take on considering their inadequacies and lack of incentive to make them thrive.
?According to him, local SMEs can scarcely process their products because of dearth of infrastructure to support production processes. ‘How many SMEs are in the category of exporting their products? Export is a serious business that you have to sign an agreement with the buyer whereby if you agree to supply him two containers a month and you supply one then you sign an undertaken that you will pay the profit that he would have made if you had supplied the two containers, so which means whoever that wants to export must have a big manufacturing outfit to meet export demand’.
Kuteyi said however that government could help in providing the capacity needed to improve export even if it means committing part of the funds usually expended every year on trade fair outside Nigeria.
He stated that when the right environment is provided and some SMEs can produce and export, then the Export Promotion Council (EPC) will be in good position to promote products in the international market.
He said further that the manufacturing sector is not properly positioned to give adequate support to the growth of the national economy as a result of numerous challenges it faces.
Kuteyi said it will be premature to project what the sector could add to the Gross Domestic Product (GDP) this year as a number of critical issues should be addressed in the first place.
He gave instance with inadequate supply of raw materials which he said is key to production. ‘It is not certain we don’t have any reserve to show that so much quantity of raw materials is what we can get at certain price and once the prices are not right therefore it is difficult to say what the sector can add’.
However he noted that ‘if everything is right and there is money at reasonable interest rate for the manufacturers at a single digit, for farmers below five percent interest rate, this will actually boost production, anything outside that it will be difficult for the sector to add much to the economy’.
He also urged that less emphasis should be placed on collateral if government want to move forward in SME development as he said that all these challenges has affected his plan to begin export of his products.
For instance he noted that though his product SUCO has almost 100 percent local content yet he could not export due to price issue. ’I don’t export because cost in Nigeria has made nonsense of export, when things are cheaper outside like you have so many cocoa beverages outside Nigeria in Europe and America, they prefer to buy raw cocoa and when they get raw cocoa they process it and it is cheaper than we process in Nigeria because they have big processing capacity, the cost of production is cheap and cost of electricity is cheap’.
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