An entrepreneur has asked governments at all levels and the financial institutions in Nigeria to implement stable policies, provide improved infrastructure, reduce multiple taxations and offer interest friendly rates for SMEs to have a breathing space in the country’s business ecosystem.
Ada Osuagwu, an entrepreneur and a Human Resource consultant in an interview with business a.m. lamented that the financial institutions in the country are not set up to create wealth but to kill businesses such as the SMEs in the country due to the alarming interest rates attached to loans they give out to small business owners in the country.
She said, “If the government can initiate stable policies and create an enabling environment, providing funds with very minimal interest rates for a longer time so that business owners like us can have access to grow. When I say funds that is, not that when I am given N3,000,000 you ask me to pay within the next one year with a double-digit rate, that is what kills businesses in Nigeria.
Our banking sector hasn’t gotten it right. The banking system in my own point of view is set up to kill businesses and not to support businesses because all of them are focused on the oil and gas, real estate, nobody is looking down on the Small and Medium Scale Enterprises (SMEs).”
She pointed out that one of the many challenges facing SMEs in the country is double taxation, urging the government to reduce the number of taxes levied on small businesses.
“These are the businesses that have been providing employments; by the time we employ 1, 3, or 4 unemployed youths from the streets and we are stable with them, banks will recruit 200 and next year they sack 100 but SMEs are actually the ones that grow the economy but the policies are so unstable. Like in Lagos where we have multiple taxations, at the beginning of the year, the state government will come; the local government with their own [demand for] money, and the Federal Government will come as well – multiple taxations. There is no policy to actually support SMEs to thrive,” she said.
She, however, urged the government to make the educational sector more vibrant in establishing entrepreneurship studies and constitute internship training programmes in tertiary institutions in order for graduates to be equipped with the needed entrepreneurial skills.
She said, “Starting from our educational system, it does not train you to be independent when you leave school. Maybe these private universities that are just coming up now that are trying to model their curricular after the ones abroad, I went to a federal government university; University of Nigeria, Nsukka, (UNN), I took an elective course; computer 301 and 302, I didn’t see any computer set throughout the two semesters I attended. The fault is first of all from our educational system, we are taught to graduate from school and look for employment. Ideally, entrepreneurship should be a general course till you graduate so that by then when you are in school and preparing to graduate that, should you not get an employment you should start something on your own, you don’t need to wait to get employed. Our educational system does not support entrepreneurship. I read English and today I am washing clothes for people. Ideally, one should think with my English degree I should be teaching or work in a media house but that is not my thing. For university was just to broaden my horizon. So, our educational system is faulty. It doesn’t prepare one for any form of entrepreneurship, no matter the course you are studying, the system does not prepare you for entrepreneurship. It’s just to prepare you to have this knowledge and come out to look for a job.
“Secondly, I think that this thing we call internship, it is not robust in Nigeria. Abroad, students, as they are going to school, they are given some hours to work to get some experiences.
The so-called Students Industrial Work Experience Scheme (SIWES), because there is a mark attached to it that is why students go through it just to get the mark at the end not necessarily for the experience on the job. Ideally, they should be understudying what the companies that they are attached to are doing, who runs the whole department, knows exactly what the business is all about. Even those in full employment, somebody can be in a department and has no clue of what the company is doing except that thing they are doing on their table. So, in the educational system, there is no provision for entrepreneurial study, in school, they should make provision for internship, no matter the course you are reading there should be internship on that course, you should have a time when you go to work on the course you are studying so that you can gain those experiences and be able know more. I wish we can be at a point whereby when graduates can’t get a job they will not be bothered but they would be able to start something on their own because of the entrepreneurship training they have received while in school.”
Osuagwu, however, suggests that the government can do a lot for entrepreneurs and SMEs to thrive by providing interest-free loans for potential businesses and also giving tax waivers for new businesses.
“The government should provide an interest-free loan for businesses, not just businesses but for businesses with the potential for growth. An interest-free loan, maybe for a four-year duration for payment and when they finish paying they should be given another loan, and also, a lot of support, some sort of tax waivers for entrepreneurs during the four years period until their business is well established. This would encourage a lot of unemployed to go into business,” she said.