Mrs. Olanrewaju Oniyitan
The Chief Executive Officer, W-Holistic Business Solutions Ltd, Mrs. Olanrewaju Oniyitan, spoke with Kunle Aderinokun about how the small and medium enterprises could help catalyse inclusive growth in the Nigerian economy
How can Nigeria best use the opportunity of hosting the World Economic Forum on Africa to attract foreign investment in SMEs?
The World Economic Forum on Africa is an opportunity for Nigeria to showcase the small and medium enterprises (SMEs) in Nigeria because it is what will bring about the solution to what they have for the event, which is: “Forging Inclusive Growth and Job Creation.” If you have that as the theme of the event, that is, small and medium enterprises only because they can help with job creation and forging inclusive growth.
I believe for Nigeria to attract investment into small and medium enterprises, they need to use this event to showcase the real SMEs. I’m known to always say that Nigeria makes mistakes representing what our true SME sector is all about. We intend to call it the MSME sector and we add the micro; we intend to showcase the micro as opposed to the small and medium enterprises. There is a difference between the three types of businesses. For them to really succeed at getting investment, they need to showcase the true SMEs so that the investors will actually see that there are businesses that can grow and scale globally. We have businesses that are doing well and they are within that small and medium range.
The theme of the World Economic Forum on Africa Nigeria 2014 is: Forging Inclusive Growth and Jobs Creation. What roles do SMEs play in jobs creation or what roles can SMEs play in forging inclusive growth?
Typically, we know that worldwide, SMEs account for the greatest number of jobs. You can only have so much large companies in one country. SMEs are easier to start up and they can create jobs. In the SME sector, small enterprises have between 10 and 49 staff while medium enterprises have between 50 and 199 staff. It is easier to have most of the companies fall within this sector and the more they are, the more jobs that can be created because they are smaller businesses that can multiply quickly as opposed to big companies like Guinness. You can’t have 50 Guinnesses in one country. But for smaller companies, it’s easier to have more of them and they will replicate and have that impact that we are looking for.
In forging inclusive growth, we need to understand what inclusive growth is. The headlines that we heard recently are to the fact that Nigeria is now the biggest economy in Africa and we have all these lofty figures; inflation rate is now low etc. but the question is: Does it trickle down to the average man on the street? My mallam earns what he needs to learn to have a good standard of living. So it’s about inclusiveness when you look at the people at the bottom, look at the poor. If we look at SMEs, they are the one within communities, they are the ones that know who live around their areas, so they could give those jobs that employ people within the communities. The SMEs do most of all these low entry jobs; they also have middle-entry jobs as opposed to everybody fighting to become a management trainee at a big company. SMEs provide low-entry jobs to can help people at the bottom of the pyramid to earn a decent wage.
If you are talk to investors attending the WEFA for five minutes, what will you tell them?
There are certain SMEs in Nigeria that need investment and there are also certain enabling environment areas they need to look at as an impact investment opportunity. For instance, I have always said if I become the President of Nigeria one, I will only have one-point agenda, which is to solve power. If we can get investors to get power, you’ve solved half of the problems of our economy because if you look at profit and loss account or cash flow of every body’s, they spend money on solving power solutions; they are buying diesel, they are buying inverters, they are buying solar- they are looking for ways to solve power issues. I will tell an investor to invest in power so that we can have power, so that that will solve 50 per cent of the problems of an SME. Thereafter, I could tell them to look for viable SMEs within Nigeria, the real SMEs not micro businesses, and help provide capacity building initiatives by funding and providing support in terms of cross-mentoring between successful businesses within their own environments and the SMEs within their environments so that they can be learning. Thereafter, we can then can take up that and start to move these businesses from small to medium.
Are these sectors already receiving foreign investment?
There are certain sectors of the economy that are attractive for foreign investment right now and they are IT and retail; that is where we have seen investment. For instance, the likes of Jumia, Konga are the ones that have received foreign investments. Essentially IT mixed with retail (e-commerce) companies have been getting investments. Jobberman has also gotten investment, although not retail but its IT. A lot of venture capitalists and angel investors are looking towards the IT sector. But there are other areas because if you want to create jobs, agriculture, manufacturing, construction have the need for large human resources; they have to be invested in to be able to create the jobs that we are looking for.
What roles do SMEs play in generating jobs in advanced economies and emerging markets?
What lessons for Nigeria
They play a great role. But the biggest one I will like to give an example of is China, the Chinese economic miracle that we all talk about, which was between 1980 to 2012, about 50 million SMEs creating 500 million jobs. We know the population of China and the Chinese are largely employed by SMEs in their country. That is one. China’s economy used to be like Nigerian economy and they’ve been able to grow because they’ve been able to grow their SMEs and that is where we need to be.
As for the lesson, there has to be focus on SMEs. I’m not saying we should not have initiatives for micro businesses. We need to spur people to build on their ideas, we also need to help the ones that are existing to grow. We need to put policies in place. The way forward is for policies that will help create a better business environment, facilitate SME growth and they need to have interventions that will support the startup growth and scaling of SMEs. One of the bibles that I have with me is the National Policy on MSMEs ( I don’t like the fact it is called MSMEs). We need to ensure that there is a good policy in place and well implemented. Like I said the National Policy on MSMEs is a fantastic report; it was done properly, it was well thought-out but I’m yet to see how well it is being implemented. We need to implement this policy.