25% Of Our Members Have Closed Shop, Egbesola Cries Out
Dr. Femi Egbesola, the National President of the Association of Small Business Owners of Nigeria (ASBON), recently expressed concern over the economic challenges faced by MSME operators in Nigeria. In an interview with Entrepreneur Excellence, he urged the Federal Government to take urgent action to support the sector and called for a state of emergency declaration. This would go a long way in helping to³ revitalize the MSME industry and drive economic growth in the country.
Excerpts:
Introduction
My name is Dr Femi Egbesola, I am the current National President of the Association of Small Business Owners of Nigeria (ASBON). ASBON is the umbrella body of those in nano, micro and small businesses in Nigeria. At the moment, we are in 27 States of the federation with over 20,000 members. I am also the thematic lead of policy and regulation in the Nigerian Economic Summit Group (NESG). I am an Adviser to the Fate Foundation and a host of others.
What Are The Criteria To Become A Member Of ASBON
Registration for membership is free. All anybody who wishes to be our member needs to do is just visit our website (www.asbon.org) and fill out the registration form online, we will respond to you and that makes you a member. We will confirm your membership and you will begin to enjoy the benefits that the association offers.
What Are The Benefits Of The Members
The benefits are numerous. One is that you will have access to the market, one of the major challenges of entrepreneurs in Nigeria is the market. One thing is for you to have a product you want to sell, and another thing is for you to have where you can sell it. So, we provide the market in different forms. We open you to different market opportunities, one of which is export. We help you to export your product, if your product is something exportable, even if it is a ‘Ghana must go’ bag size. You don’t need to have plenty of money to load a container. We ensure you don’t fall into the hands of the scammers. We provide all the certifications you need for export purposes. We will take you to different trade missions, through trade exhibitions to different countries.
As we speak now, we have some of our members in Togo, and by next week some are going to Egypt. Three months ago some were in the US, all these were made possible by the association. Most of these exhibitions are sponsored by the government through the association, so, you can sell your products or services to a wider market beyond the shores of the country.
We also have a partnership with the government. You must be aware that there is this procurement act where the government states that 40% of their businesses must be done with local entrepreneurs. That means they have to purchase locally-made products or services. So, we open our members to new deals with the government, they supply, and they do contracts with the government through that act which is most likely not possible if you are not a member of the association.
We also open you to online marketing. We have a lot of online platforms where you can also market. We have partnerships with quite several organisations, including banks. Most of the banks now have online malls where you can exhibit your products. We are in partnership even with existing malls and social media platforms for marketing like Jiji, Conga, Jumia and the rest.
Another one is finance, we give you access to finance, access to funding. Funding in the form of grants, is the money you don’t need to pay back. Also, in the form of loans. Talking about grants, this year alone, we have over a thousand of our members who have collected one form of grant or the other. Most time, these grants come from international organisations, and even the government, both state and federal. So, through the association, you are being positioned to benefit from such grants. We also help you to get loans from different funding partners including commercial banks. The difference of going through an association is that you have the loan at a discounted rate, and the interest rate will not be as high as what it used to be when you go alone. The repayment period is also not as high. The terms and conditions are also not as stringent as they would have been if you went alone. We open you to the cooperatives we have in the house for funding. We open you to investors, people who will bring their money to invest in your business. We give you access to information, so much information is there for business owners that is not in the public domain. The government passes specific information through business membership organisations alone and not in the public space. So, when you want to get information that relates to your business, the best place to get it is through an association and that is one of the things we do. Every Monday we dish out relevant information to our members as many as possible that can help them grow their businesses.
Another thing we do is that we build capacity. We run training programmes from time to time. most of our training is free, some are sponsored by the government, corporate organizations and international NGOs. So, there’s no month that we don’t have training, training on how you can run your business better. How you can manage your business. How you can package and brand your product. How you can get registered with relevant agencies of government. How you can do things innovatively and creatively in the modern world. How you can use technology to improve your business and so on. We also assist our members to get their products registered with NAFDAC, Standard Organisation of Nigeria, (SON) and the rest at a very discounted rate. Sometimes, all these fees are what you can pay in instalments. So, these and more are the benefits of the association.
Prices Of Commodities In The Market Have Skyrocketed. What Do You Think Should Be Done To Address The Situation
One way prices of commodities can come down or better put, inflation can come down is if the government decides to fix the anomalies in the system.
Firstly, our infrastructure must be fixed. If we have good infrastructure in place, the cost of doing business will come down and that will also bring down inflation. One critical infrastructure is power. If we have constant stable electricity many entrepreneurs that depend on generators will have no business in buying petrol or diesel. The barbers, the welders, the small production factories.
Another key infrastructure is the road, if there are good road networks, we will spend less on moving our products from one point to the other because the cost of moving things will be cheaper.
We also believe that the government needs to now work critically with stakeholders in the MSME sector, such that we can sit down to review these policies.
The problem we have in Nigeria is that we have a lot of policy summersaults that are affecting businesses. If we have good partnerships and collaboration between the private sector and the government, a lot of things will change. It will bring down the cost of doing business and it will ease the doing of business in Nigeria. There are so many policies, I can go on and on. One of them is the change in Naira policy, we can see the adverse effect it had on us. Another one is the issue of the free fall of the Naira, this is a policy that is supposed to be good but because there’s not enough dialogue between the private and public sectors the policy has brought negative effects because as of today the dollar is over a thousand naira and we believe if there had been consultations, we would have been able to advise the government on some of the things we feel will work. One of them is that this may not be the right time to introduce that policy and if it has to be introduced, it may not be one at a go, it may have been done in segmentation. Another one is the new policy of lifting the forex ban on 43 items, this also is going to immediately begin to make prices of commodities go above the roof. It is unheard of, to bring in products like toothpick, chicken, rice, clothes, and things that we can do here on our own.
When the ban was there, quite several organisations, including some of our members, went to collect loans to buy equipment so that they could begin to produce these things locally and they are already making them. Now, coming to compete with foreign products again is a big challenge and it is going to increase the cost of doing business. So, it is important for the government to see the need to collaborate with the stakeholders in the making of policies from the inception, if this is done I think a lot of things will go right.
What Are The Major Challenges Of Your Association?
The major challenge we have at the moment is the very harsh economic environment of doing business. Why we call it major is that it has made over 25% of our members close shop. So, a lot of businesses are folding up to relocate back to the village. Some are folding up because they have died of natural death caused by this economic hardship. Some have folded up to join the Japa syndrome. It is a big challenge because these are employers of labour. When we close up shops, a lot of jobs are lost, those people go back to the street and if they do not find another job they go into crime because they just must make ends meet.
It is a big challenge and we feel that it is time for the government to declare a state of emergency in the MSME sector, according to statistics we are the engine of growth, we employ 96% of all the employees in the country and we own 87% of the businesses in the country, so, if anything is affecting the sector, it should be a call for concern for the government and government should give more than needed attention. So, that’s our major challenge. Anything that causes death either natural death of the person or economic death to the business is a big issue.