The Lagos State Commissioner for Commerce, Industry and Cooperatives, Mrs Lola Akande, says there is need to support SMEs as failure to do so would lead to an exponential increase in poverty and insecurity.
Akande, spoke at the Annual Seminar of the Small and Medium Enterprises Group (SMEG) of the Lagos Chamber of Commerce and Industry (LCCI) on Thursday.
The meeting which took place virtually had its theme as: “Positioning SMEs for Growth in the New Normal’’.
Akande, represented by Mrs Helen Adesina, Director of Commerce in the ministry, said: “The importance of MSMEs in any economy is impossible to overemphasised.
“They account for two-thirds of global employment and half of GDP.
“SMEs create jobs and put food on peoples’ table. Sadly, SMEs are particularly susceptible to folding up as a result of the COVID and post-COVID economic situation.
“These businesses were already faced with challenges of cash flow, competition from larger companies, non-existent economies of scale in raw materials sourcing, marketing, sales and distribution, as well as a lack of relevant managerial skills and skilled employees.
“Failure to bolster these vulnerable SMEs with necessary tools to overcome this new normal will lead to loss of employment, a reduction in the spending power of the average citizen and ultimately, an exponential increase in poverty and insecurity.’’
The commissioner said that in the wake of the COVID-19 pandemic and even the recent #EndSARS crisis, there had been decline of international business activities.
“Also, the downturn of state economies and the attrition of numerous MSME operated ventures.
“The outbreak has also resulted in the stalling of economic activities affecting trade, growth, investment and employment.
“Glaring illustration of these challenges are evident in the entertainment, events, hospitality and tourism industry,’’ she said.
Akande noted that the “New Normal’ of conducting business, social distancing and lockdown prescriptions also affected the ‘how’ and ‘when’ of physical market operations and other business related activities.
According to her, Lagos State, as the foremost economy of Nigeria with over 11,000 SMEs and 3,000,000 micro enterprises, has put measures to cushion the effect of the COVID-19 pandemic in Nigeria.
“As such, the government of Lagos State has been proactive in ensuring that these ventures stay in business and continue to do so long after the pandemic.
“To this end, a number of existing schemes have been strengthened, modified and new measures taken by the Lagos State Government since the onset of the crisis.
“Some of these include collaboration with LSETF for online and offline application to access loans for SMEs and three months moratorium was granted on loan repayments to current LSETF beneficiaries.
“The 6th Corporate Assembly in February 2020, where Gov. Babajide Sanwo-Olu interacted with the business community to deliberate on how best to create a business friendly environment in the State.
“A review of laws with regards to the Land Use Charge, 3-year waiver on penalties for defaults in the years 2017, 2018 and 2019.
“Also a 25 per cent discount on early payment of the Land Use Charge amongst others which will be expatiated on by the Director on Entrepreneur in the Ministry of Wealth Creation & Employment,’’ she said.
Akande urged MSMEs to look inwards not just to survive but to also thrive in the ‘new normal’.
According to her, MSMEs should optimise resources, adapt to changes, move towards digitisation of their processes, embrace innovation and collaborate with one another.
Also, Mrs Toki Mabogunje, President , LCCI, said that supporting SMEs is the most strategic approach toward reflating the nation’s economy.
She said that ideas on strategies that would help position small and medium business operators for sustainable growth in the new normal should be advanced.
She commended the interventions by the fiscal and monetary sides of authorities in cushioning the impact of the pandemic on the business community.
According to her, various schemes and programmes have been implemented at national and subnational levels to support the working capital requirements of small and medium business operators in a bid to rescue them from going bankrupt. (NAN)