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In, “firming the economic foundation for a more prosperous Anambra state”, the Private Sector has a vital role to play and therefore, ought not to be regarded as a push-over in the economy. The Micro, Small and Medium Enterprises (MSMEs)are the veritable engine block that drive the economy in the society. This saying is a hard fact that remains undisputed, regarding the strategically positioned space of SMEs in the business spheres. SMEs invariably, influence, maintain, direct or even dictate the pace/tempo of economic activities and the mannerbusinesses could flow within the specified market area. This makes it imperative that the MSMEs should be taken seriously or be regarded and handled with utmost care and caution by the government to make the economy work, if actually she would succeedeconomically. Without such stand being taken by the government of the day, the tendency is that the economy could stand the risk to suffer adversely (directly or indirectly).
Challenges:-
1. The Challenge of Multiple Taxation:
In government and business, it is the responsibility of the government in power to simply create an enabling environment for the players (Traders, Manufacturers/Industrialists and the other Entrepreneurs) to freely operate without undue hitches, through fiscal policies. In Anambra for instance, the issue of “Multiple Taxation” has exacerbated the situation of economic growth by the MSMEs in the economy (and the mostly affected through “illegal Tax/Levy collections with daily extortion”, are the vulnerable market women that hawk Fruits & Vegetables in the streets, beingthat these are their families’ BREAD-WINNERS). This is as a result of unchecked faceless operators all over the state (posing as Government Agents on revenue drive), thereby creating uncountable loopholes and windows for “leakages of revenues” that otherwise would have accrued or trapped into the coffers of the Government of Anambra state. Not only does the state surfer losses of revenues but, the excruciating aspect of it is that the small businesses that operate within the economic space are constantly sucked dry by these unscrupulous group of lawlessindividuals, virtually in all market locations in Anambra state. At this juncture, let me digress a bit and thank the efforts of a civil society advocacy group in the state (presently fighting this scourge) known as “Njiko Anambra Tax Payers Association” (NATPA).
2. The Challenge of Financial Support:
On Funding; accessibility of Funds to SMEs to engage in more meaningful business operations that could expandand navigate to well established and properly structured money-making Ventures in the state, (in most cases) are not actualized by the operators because, they face conditionality of stumpy loans that the business operators can hardlymeet or would never satisfy. This is therefore, a major challenge in growing small businesses in Anambra state. These local entrepreneurs are not in any form, assisted/supported financially through spontaneous interventions (unlike their counterparts in other economicclimes) nor identified with, either; by financial institutions (especially the Nigerian Commercial Banks) for their much needed & desired responsive, adequate financial support (no matter how they struggle to prove their mettle,genuineness or with convincing evidence, talk less their clear visibly expressedwillingness to contribute towards the state’s industrial and economic growth, unless they have “long-leg”/”connections” in the society), considering also, the damaging impact of delays (i.e. not averting lost time incidents) . This unfair singular challenge facing most small businesses beats one’s imagination and comprehension;especially when economic policies and government initiatives keep preachingPoverty Alleviation, Wealth Creation, Economic Empowerment and all sorts of Support to small businesses. These initiatives range from the Industrial Training Fund (ITF), National Directorate of Employment (NDE), National Poverty Eradication Program (NAPEP), Funds for Small-scale Industries (FUSSI), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), National Economic Reconstruction Fund (NERFUND),YouWIN (an initiative, packaged as our youth enterprise program under the former Minister of Finance); and of course the current 50/50 partnership arrangements between Anambra state government and the Bank of Industry (BOI) and many others. In spite of these, our numerous and uncountable number of such genuine local investors (small enterprises) are mostly left out of such intervention schemes, suffering and languishing without actualizing their dream projects due to lack of financial help from the appropriate quarters. In most economies of the world where such financial assistance are extended to those entrepreneurs that stand out towards impacting positively on the growth of the government economy; testimonies areshared/heard times without number, how their governments/banks intervened and came to their rescue, why is it not so in our own society and economy?
When government talks about Socio-economic programs and services; through provision of public social welfare packages/schemes on health-care, education and etcetera (in building an equitable society), where families survive by offer of affordable access (with protection) on basic human rights/needs (i.e. projects majorly done through programs on social investments and public expenditure); could as well be better approached indirectly and achieved by prompt and adequate Intervention Funds/Financial Support (Loans) by the government for essential, laudable and viable projects (that might have even been over 75% completed and self-financed) in the real sector by our numerous entrepreneurs, who shall in the long run, end up creating job opportunities for the labor market that could account for well over 50% ofemployment opportunities; (cumulatively, at macroeconomic level) than such direct budgeted spending by government on other social programs. This fact has been proven by SMEs in contributing to the economic growth in most of the developed economies but, not so in our own business clime because Nigeria’s insensitive approach appears a recalcitrant case; making our economy to lose. For Anambra to firm a more prosperous economic foundation; I believe we need to learn our lessons, take corrections, re-strategize and hit the ground running (to avoid the mounting/ever increasing unemployment embarrassment).
3. The Challenge of Unemployment:
The Delta state government just passed out trainees after two government sponsored programmes (Youth Agricultural Entrepreneurs Programme called YAGEP and Skills Training and Entrepreneurship Programme known as STEP) that exposed them to basic business management techniques and practices; resulting to 776 small businesses being established across various cities of the state, after the passing out on 14th January 2016. Thisshall in no small measure curb crimes, poverty, unemployment and other social vices in that economy; and on one hand boost productivity, create more jobs, create wealth and impact positively on their overall social wellbeing. Such laudable programmes, if prudently implemented and executed shall improve the state’s economy (along with supporting existing genuine investors in Anambra to actualize their vision that would make their operations and the government’s economy stand firm)otherwise, it is the government that loses in the long run! This is the strategy for the firm economic foundation towards a moreprosperous Anambra’s economic growth, sought about by reason of this Summit,expected to grow in leap and bounds in the near future.
4. The Challenge of Technology:
The state government on another side needs to constantly encourage SMEs to improve technologically. This is very essential because, for an economy to besustainably competitive (both in the local and the international markets with her range of products), Research and Development in terms of standards with modern industrial machineries that could comfortably position them to compete favorably with their contemporaries on imports, they must be trendy in all aspects (including cost effectiveness, and this is where “economy of scale” as a result of Technology sets in); this is especially observed on food imports that are even cheaper and better marketed in our local market. I am sincerely sorry to say that, banks are not helping matters. If Anambra’s economy must prosper; the government of the day should step up action by mediating on behalf of “genuine” SMEs in Anambra state (with their banks). This is so because, it is a foolhardy venture too, for this group of SMEs to try the so called NERFUND loans or the likes and succeed. It is all in theory (with due respect), whenever the print media report on the beneficiaries of such loans/facilities (Nigerian Investors); the potential economic engine block for growth in the economy (the actual applicants who really needed it for growth) are not reached and they never benefitted (we need to wonder who are the actual beneficiaries). The government needs to look into this critically and factor a schedule on how the viable small manufacturers in the private sector that shall add value for growth in Anambra economy are encouraged and assisted, now that Non-oil Exports is the in thing!Manufacturers Association of Nigeria (MAN) needs to testify at this point, if it is not a statement of fact. Very sincerely, the Real sector invariably, appears to offer virtually all necessary alternative solutions to our economic challenges because, economic policies of Import Substitution, Backward Integration, attraction of Foreign Direct Investment and more; through local manufacturing in all known economic sectors, shall in overall terms give a boost to the state’s economy with the expected high productivity that drives the GDP growth rate and wealth creation at a steady increase, where unemployment rate, crime rate (though security challenges isalready dealt with by Governor Obiano’sAdministration) and poverty are constantly put at a reduced percentage, with a steady increase in the social wellbeing of the entire Anambra economy.
5. The Challenges of Power Supply andPoor Educational Enrolment:
The other two challenges (though will not be discussed in details in this discourse) are adequate Power Supply needed to sustain steady productions in the state. I know very well that alternative arrangements are on for a privately arranged Independent Power Project for SMEs in the state, through supply ofNatural Gas. This of course, would be in addition to the high hopes, all & sundryhas on the current strategy and performance expected of the Minister for Works, Power and Housing; Raji Fashola(SAN). The other challenge on SMEs in Anambra is the poor male enrolment in secondary schools. This is a very serious issue which portends danger in the future of the state because, “education is the key to Success” (most especially in this 21stCentury); Anambra cannot succeed economically if there is no future ordecline in educational exploits of Anambra citizens because they say, “knowledge is power”.
Opportunities:-
Opportunities abound! Looking atObiano’s 4 Key Economic Pillars/the Enablers (Agriculture, Industry, Trade & Commerce; and finally Oil & Gas), his economic policies and initiatives are very visionary; they are indeed the economic foundations that need fortification for more prosperous Anambra economic growth; through the efforts of the SMEs.Should we talk about Agriculture and discuss on the vast arable land in the state,cash crops that thrive within and have enormous comparative advantage over the other states of Nigeria? On Trade & Commerce, Igbos as predominantly Traders (which runs in our veins); should we talk about our age-long exploits as world-class International Merchants or the famous Old Onitsha Main Market with all the millions of people trained and produced through apprenticeship with marketing skills, scattered all over the globe? On Industry, should we talk about our naturally endowed skills to function as entrepreneurs, always creating and recreating through Artisanship, diligence and capacity to withstand pressure and challenges that are inherent in manufacturing? We have the prowess to excel in the Real sector of the economy.
Please permit me to zero down and talk about the gains in local manufacturing, with specific reference to the Oil & Gas subsector of the Nigeria’s Downstreamsector! Although, Anambrarians shall be more and better equipped on this, come 29th November 2016; here in Awka, when a Professor of Chemistry (at the Official Opening Ceremony of the Anambra Trade Fair); will be lecturing and educating all of us on things to do in our economy with our Oil & Gas. The Theme of the 2016 “Jubilee Fair” is, “To harness Anambra’s Natural Resources for Non-oil Exports, as a world-class Trade Hub”. Please, make sure that you partake in this coming all important Trade Exhibitions, billed to start on the 25th of November.
Based on the premise and known factthat, “an economy can only be as strong as its manufacturing base”; and considering this Summit’s Theme(“Firming the Economic Foundation for a more prosperous Anambra State); one is left to nothing than to hit the nail on the head! PETROCHEMICAL is it!!! We have Oil & Gas in the state, in fact, our Natural Gas Vein and stock is the best in Nigeria (from studies carried out). So why can’t we explore that avenue in the nation’s Downstream Oil & Gas sector of the economy, especially now that the future incrude business is murky? No doubt, it is a very ambitious Vision (considering the Investment, with huge Financial Outlays &Implications) but, from my professional angle I know “we can” because, it is a“money spinner”! Focusing on the Real sector (Manufacturing) with much emphasis on the Oil & Gas Downstream sector; Petrochemical Industries, Gas Projects, Fertilizer Plants and various shades of Chemical Industries in Anambra are enough to reposition our state Economy on the right path towards Economic growth and Development. Especially when it is known that over 80% of the products of the class of Industries mentioned above are “Primary” or/and“Intermediates” (“Feedstock”) for major end use manufacturing Industries in all known sectors of any economy (globally)! These render real support as the rightmanufacturing base with a solid foundation that forever sustains growth by itself. Apart from the following under-listed Primary Petrochemicals and Intermediates (methanol, ethanol, ethylene, polypropylene, isopropanol, formaldehyde, resins, ethylene glycol, phenol, acetone, polyols, synthetic rubber, latex, Nylon 66, polyvinylchloride,polyvinylacetate), major end-use markets broaden the productive potentials of so many sectors as shown below; Plastics, Adhesives, Fibers, Paper & Textile sizing, Solvents & Cosmetics, Pharmaceuticals, Paints, Urethane Foam products, Tyresand Rubber products. This economic ideas and strategies on increased domestic output, export-boost on Non-oil goods, and general reduction on importedgoods; are synergic with my concept of targeting Trade Surplus for Anambra’s Economy, if local manufacturing is encouraged.
From the macroeconomic point, the foreign sector is either considered as a closed economy or an open economy for a country’s pattern of trade transactions or dealings with the rest of the world. For instance, Nigeria’s open economy is alsocharacterized as an import-dependent economy as well as basically, a mono-economy (in terms of exports, of which our Oil accounts for as much as over 90% our total export trade accruals). But, we need a paradigm shift to an open economy that is characterized as “Export-oriented” as well, with multiple exports earnings. My take and input here is, a PETROCHEMICAL INDUSTRIALIZATION that would positively position Anambra’s economy with the right kind of manufacturing base; such that supports a stable self-sustainable economic growth & development, so that whenever Anambra state talks about “Export-oriented Economy”, we mean it. We have the “Rod” in our hands (as Moses of the Bible).
RECOMMENDATIONS:
The Government of Anambra state should have an “Economic Development Plan”; to alleviate Poverty and Unemployment among the teeming fresh University graduates. This initiative shallappreciably drive the development of the Economic sector in the state.Indeed, to sustain the impressive economic growth Anambra aspires to achieve, our Policy Makers need to focus and learn the best practice in fostering Technology Transfer and identifying critical InnovationBarriers and Gaps towards achieving increased Productivity and Structural Transformation of Anambra Economy.
For this Economy to sincerely make a sustainable progress, Real sector (including small businesses) must be encouraged, by making the government (including the 21 LGAs) monitor very closely theaffairs, problems and challengesfacing these small units/establishments, and promptly respond positively to assisting them avert any lost time incidents (LTIs), whenever they are seen grappling with any form of business challenges (especially on Finance, by mediation with their Banks).
To make Obiano’s 4-Key Economic Enablers more meaningful, “Value Addition” along Value Chains of Anambra’s Natural Resources, ought to be implemented (with specific reference to Agriculture, Oil & Gas).
To streamline collections of Tax & Levies (among state and the 21 LGAs) by effectively engaging the state’s Board of Internal Revenue with the assistance of NATPA (for instance) in the Revenue Drive. This will drastically reduceleakages on accruals and, at the same time Improve the state’s generated Income profile.
Mechanized Agriculture, at all levelsand categories of Farming in thestete’s 21 LGAs should be implemented; in view of“Agribusiness”.
The Government and ANSIPPA should further sensitize Investors (both Local and Foreign, through Partnerships) with emphasis, to setting up Petrochemicals Plants in Anambra.
Thank you!
Sunny Chuba Nwachukwu (FICCON)
Chairman, 2016 Anambra Trade Fair Planning Committee
VP Membership, Onitsha Chamber of Commerce
Secretary-General, DMGS Old Boys’Assoc. (World-wide).
CEO, Schub Nigeria Limited
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