Why SMEs should open their doors to us – Odumodu
By Franklin Alli
Last week, Standards Organisation of Nigeria (SON) held a one-day capacity building programme for members of the Nigerian Association of Small and Medium Enterprises (NASME) in Lagos at the Manufacturers Association of Nigeria House.
In this interview, the Director General of SON, Dr. Joseph Odumodu, says the essence of the exercise was to discuss best practices, new technologies and managerial improvement, geared towards improving the competitiveness of the MSME sector. Excerpt:
What informed the need for this training programme?
As you are aware globalization has brought about the collapse of tariff walls and protectionist policies, thereby exposing local entrepreneurs to stiff competition. It has also therefore become imperative for local entrepreneurs to improve capacity and become competitive in order to remain relevant in the scheme of things.
Secondly, if the firms in this sector have to contribute their quota to economic development of the nation, then of course, they have to be active players in the production and distribution of goods; it means that their outputs must be of quality to meet the demands of the Nigerian consumers, export and to compete effectively with goods from other countries.
Furthermore, it is recorded that about twelve million people are unemployed in Nigeria. With almost 11 million SMEs in the country if each employ 1 person, we would have achieved full employment status in the country and we would be better than most of the advanced economies.
Beyond the talk, talk how are you going to assist them practically?
As I said earlier, there are more than 10 million MSMEs in Nigeria and we have discovered that most have the genuine intention to manufacture quality products but lack the capacity to do so. SON shall identify 2,500 SMEs and work very closely with them and ensure their products achieve ISO 9001(quality management systems and ISO 22000 (food safety management system) at no cost.
We don’t award ISO certification, but we can help them to go through that process and achieve certification. One thing I must tell you is that SMEs are small, for example, a micro enterprise having less than ten staff, it may not be easier for them to achieve certification than a big company that has 400 staff and everybody must go through that process of training and imbibing standardization processes.
Another thing we found out is that most of the SMEs in the country, if you look at their population almost 50 percent of them are in food related businesses. If they get Food safety management system certification, ISO 22000 , they will become better.
Remember, ISO is international. That is the confidence we want them to imbibe. Secondly, we want them to open their doors to us, we are coming to work with you; we are not coming to see the flaw of your process. We are not business people but we understand the processes of production. We would help them to identify and remove all activities that are not value-added. And when you remove things that are not adding value, you make the process more efficient.
You talked about linkages between the SMEs and the multinationals, what forms will it take?
In fact, the Trade and Investment Minister, Dr. Olusegun Aganga, has actually started the process of linkage between the SMEs and the big companies so that they become the processes of getting raw materials for big companies, and this would make this economy to grow to a good level. Let me go back again to what I discussed with the Minister, in the next two weeks, we are going to hold productivity seminar that would focus on local production.
From the study we have done, we identified four critical areas, namely, the influx of substandard products and smuggling in the Nigerian economy, infrastructures challenge, the issue of patronage of certified Made-in-Nigeria goods and the last one is access to credit.
The seminar is going to involve the banks, SON, the Ministry of Trade and Investment, and Finance, for funding. We are going to ask the banks why are SMEs not able to get credit facility, what are they going to do to be able to access credit, and how can government stand behind them to ensure that they guarantee .
So, at the end of the day, the outcome of the seminar will be presented by the Minister to the Federal Executive Council. The seminar is an initiative of the Minister of Trade and Investment, Dr. Aganga. I can tell you, he also intends to use that forum to create a local patronage bill that will go to the National Assembly. We need to begin to initiate law that says you must buy products that are made in Nigeria. If you have a products that meets minimum standard, why don’t we make it those products the first choice before anyone goes abroad to buy foreign goods.
NASME President, Ibrahim Gusau has actually given an example, if you are a car assembly plants, there are certain items that have local content, for example, why must we buy upholstery seat from abroad when they are available here; what we need to do is upholstery has its own standard and our job is to make sure local entrepreneurs are able to meet the standard and quality that is brought from abroad. That is how we are going to create those linkages.
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Why SMEs should open their doors to us – Odumodu