Procter & Gamble – Bank Of Industry SME Academy Event
KEYNOTE ADDRESS BY HIS EXCELLENCY, PROF. YEMI OSINBAJO, SAN, GCON, VICE PRESIDENT OF THE FEDERAL REPUBLIC OF NIGERIA AT THE PROCTER & GAMBLE – BANK OF INDUSTRY SME ACADEMY ON THE 12TH OF FEBRUARY, 2021
It is a great pleasure to be with you all this morning at the Procter & Gamble – Bank of Industry SME Academy. Let me begin by thanking Procter & Gamble and BOI for the invitation to speak to you all today, and for investing in such a necessary event.
This administration is determined to support small businesses because we know that this is the way of growth and prosperity for our people and that support is now even more necessary in the wake of the economic downturn caused by the COVID-19 pandemic. It is exciting and encouraging to see private sector partners who are just as committed to doing the same.
The Federal Government believes wholeheartedly that SMEs, or rather, MSMEs, i.e. micro, small and medium enterprises, are the bedrock of our economy and we are constantly aiming to support innovative ideas and interventions that can help MSMEs grow and, in turn, grow our economy and create more employment opportunities.
I am often in a position such as this, where I am asked to speak to business owners and entrepreneurs about the value of their businesses to our economy. At such events, we often remind Nigerians that according to the National Bureau of Statistics, MSMEs contribute 48% to national GDP, account for 96% of all businesses and 84% of employment. We also remind the audience that there are about 17.4million MSMEs in the country, accounting for 50% of our industrial jobs and nearly 90% of the jobs in our manufacturing sector, and I could go on and on.
But today, I want to go beyond those statistics. Indeed, I would like to unpack some of this data, with the aim of explicitly highlighting the significance of the assertion that MSMEs are indeed the bedrock of the economy.
While I’m aware that this event relates to an SME Academy, you may have noticed that I am choosing to refer to MSMEs. This is deliberate. Of the 17million odd MSMEs that we have in the country, 99.8% are classified as micro-enterprises. Micro enterprises employ less than 10 people and typically have assets valued at less than 5million. Enterprises that employ less than 50 people are classified as small, and those that employ between 50 and about 200, are classified as medium enterprises.
If 99.8% of our MSMEs are micro-businesses, a number which I imagine could be higher still given the size of our informal sector, then we cannot afford to drop that first M in MSMEs, especially not in a conversation about their importance for our economy.
One of the things I want to say in addition to this is that entrepreneurs with the lowest turnovers are the most vulnerable to economic shocks like those that the pandemic has endangered and we must support them.
Allow me to paint this picture even further. An overwhelming 76% of micro-entrepreneurs only have secondary school certification, or even less. We can assume that most of the business owners in our economy are not sufficiently exposed to formal education and are likely experiencing sizeable skills gaps. While increasing access to and improving the quality of traditional education is important, events such as this, offer an opportunity for business owners to acquire skills, especially vocational and management skills, that may otherwise only have been available through traditional education routes.
I would like to mention here and many are familiar with the work the Bank of Industry supported, the Government Enterprises and Empowerment Programme, GEEP, under which we had the TraderMoni scheme, MarketMoni and FarmerMoni Scheme. The BOI deserves all the commendation for the organisation of that entire scheme and also the enumeration of the very many petty traders who are involved in that scheme. Something the TraderMoni scheme showed us is that the bottom of the pyramid of the commercial value chain, trade and sales value chain in Nigeria, is a crucial part of the entire equation.
These traders are those who have tabletops or those who carry their wares around on trays, many of them are the last mile traders for fast-moving products such as the ones Procter & Gamble manufacture and several other major fast-moving product manufacturers.
These micro-entrepreneurs who are traders and petty traders, some of whose inventory doesn’t even exceed N3,000 are the ones that were targeted by the government and BOI’s TraderMoni scheme.
We found that it was exceedingly empowering for these micro-entrepreneurs because they were able to receive credit to continue to do their businesses and when they paid back the N10,000 TraderMoni, they then got 15,000, and when they paid that back, the received N20,000 and incrementally in that way.
The most fascinating aspect of that programme was the fact that there was a high rate of fidelity to the agreement to pay back. Many of these individuals actually paid back and many got the second tranches of their loans.
One of the very critical things that we need to keep examining and looking back at is how to continuously empower that last mile, the bottom of the pyramid in the trade chain, and I think that schemes such as TraderMoni and other programmes including those sponsored by the private sector deserve every push and encouragement.
But thinking beyond just this event, as a government and as policymakers, we must take factors such as this into account if we are convinced that MSMEs truly are the engines of growth in our economy.
One of the most important granular details of our data on micro-businesses, however, is the fact that when we look at micro-enterprises, the area where we have the highest skills shortage is in information and communication. The irony is not lost on me that I am sharing this on a Zoom call, and in an era where so much has been forced to move online. It is an extremely important consideration if we genuinely believe that these kinds of businesses are the bedrock of our economy.
How do we continue to offer accessible opportunities for micro-entrepreneurs to upskill, and close these sizeable skills gaps that are preventing their growth as the private sector, as business owners who have the chance to be at such an event and invest in your knowledge in this way?
The real question is how do we reach the largest numbers, many of whom cannot participate in this Zoom call for obvious reasons that they do not have the facility to do so? It is possible to translate a lot of the programmes that we have today into formats and platforms that are more easily affordable to the largest numbers of our people.
I am sure that this way of being able to retail these training further to the lower levels is something that the P&G/BOI Academy should take a good look at and I am sure they can come up with all manners of creative ideas of reaching that last mile with useful training.
I implore you to not only maximize the learning opportunities that came with this programme, but to find accessible ways to share what you learn with those who weren’t able to be here.
This means that as a government, we also have to get creative about how we engage our nation’s most vulnerable businesses, especially in the current crisis. Our Economic Sustainability Plan sets out a number of ways to do exactly that. One way we have begun implementing this is through the Survival Fund, offering payroll support to small businesses in order to safeguard at least 1.3million jobs, and offering interest-free credit for daily-paid and self-employed artisans.
Almost 50% of micro-businesses are owned by young people, Nigerians under the age of 35, so it is encouraging to note that young Nigerians made up 82% of Payroll Support scheme recipients and have reported that for the first time in a long time, Nigerian MSMEs are satisfied with the transparent and seamless implementation of this Federal Government Scheme.
This is evident in the reopening of the registration portal where at the beginning of the Scheme, due to scepticism that generally attends these sorts of programmes, the portal opened for 6 weeks and we received then 463,000 applications. But once the implementation of the Scheme began and the portal reopened within 1 week, we received 892,000 applications.
The whole purpose of the fund is to ease some of the effects of the pandemic on our economy’s most vulnerable businesses and we have received an impressive number of testimonials from beneficiaries.
The Payroll Support Scheme pays business owners between N30,000 or N50, 000. To some entrepreneurs in attendance today, this may seem smaller than you personally may have hoped to receive. But I began this speech urging you to consider the perspective of micro-enterprises, which make up 99.8% of our nation’s millions of MSMEs and yet, their size makes them so vulnerable to economic shocks, consider that perspective.
In conclusion, it is essential for us to acknowledge how important MSMEs are and we will continuously do so, but in order for us to effectively target our efforts in their growth and in order for micro-businesses to become small, for small businesses to become medium, we must approach this data with nuance.
To the entrepreneurs who are here today, I hope that this has put into context, the value of the opportunity that this SME academy is.
Once again, let me thank Procter & Gamble and the Bank of Industry for hosting this event. They have shown consistent commitment to our local talents and broader SME development in the country. We are truly appreciative of their efforts.
I hope that you all enjoy the rest of the programme.
Thank you very much and God bless you.