Ahead of the annual Lagos International Trade Fair which seeks to promote small businesses, as well as big-sized ones, Gabriel Idahosa, who is the Chairman of LCCI Trade Promotions Board, has said that the challenges bedeviling SMEs in the country can be mitigated at the Trade Fair.
In this interview, Idahosa also makes claims for the role of the Central Bank Nigeria (CBN), Nigerian Association of Small & Medium Enterprises (NASME) and Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in aiding SMEs with loan facilities and regulatory policies.
The theme of this year’s Trade Fair is ‘Connecting Businesses, Creating Value’. This is the grand promise for the Lagos International Trade Fair. Around the theme, we try to develop programmes that seek to achieve that view. We seek to connect businesses, both locally and internationally. It is also about creating value for all our partners. We have about 2,000 exhibitors who have to meet people from other parts. People are always in business to connect. We also want to have a hub for Africans to showcase their unique hubs. As the largest Trade Fair in Africa, we felt we should promote trade within the context of the African Continental Free Trade agreement(ACFTA), that has just been signed. As we speak, we have about 2,000 exhibitors and about 300 foreign exhibitors from about 17 countries. The Fair started as a government project before the LCCI took over. Government saw it as a vehicle for promoting trade and attract foreign investors to showcase their opportunities. Every year, local businesses are able to expose their products. As we speak, some of the distributors of foreign products didn’t actually travel abroad on their own but met the foreign investors at the trade Fair.
Impact on investment
About five big Chinese companies have been attending the Trade Fair and they told us that due to distance and language, they didn’t have more opportunities but since the Japanese encouraged them to participate in the Trade Fair, they have been coming, every year. There are now a lot of Japanese companies here in Lagos and Ogun State, including the large construction companies and retail distribution chain that started business in Nigeria as a result of their initial experience at the trade fair.
Far away in Japan, they really don’t have a lot of information beyond what they see on TV. Coming to the Fair opened their eyes to the opportunities. That’s one of the impacts of the trade fair to foreign investors. This year, we have about 7,700 square metres of space taken by Chinese exhibitors alone. This is double what thay have always taken and it is due to the annual impact. The amount of additional space speaks for itself.
Last year, they took 4,200 square metres. These are hard-nose businessmen who don’t part away with a kobo of their investment. The Chinese now have the Free Trade zone in Ondo and that is how their businesses have grown through their annual experiences at the trade fair.
There is a department that essentially gathers data about the fair,inlcuding pre and post events. As an organisation, the LCCI is not a regulatory body but a body that is meant to advocate and promote businesses. What we do is we give the regulatory agencies the opportunity to interact – from the Customs, to NAFDAC, to CAC, to SON. They also have their special days here and the investors are told what to do. The CAC is always here to register businesses and they take out the opportunity to tell them the regulations needed to do business in Nigeria. So, they are expod to all the regulatory agencies. The Customs and Immigrations clear the goods and certify them.
We know that after the trade fair, people still consume them. The fair is not a place to display fake products because every exhibitor has to come from a known origin. We have their information and it has to be licensed in our country and theirs too. So, the initial work is done to ensure that at the entry point, promotions and regulations are done. If they run foul of the law, the regulatory agencies would have to act according to the law.
Even within the Chamber, the number of our members in SMEs constitute about 80 to 90 per cent. We have our large SME group in the chamber called Small and Medium Enterprises Group. So, we feel the pains of SMEs right where it pitches. The struggle of access to finance and capacity building are very real for SMEs.
Within the chamber, we do a lot of advocacy and for example, we talk to the Central Bank, NASME and SMEDAN on the programmes they have for SMEs and inform our members to access it. We try to engage the CBN on how our members can access the N22 billion facility for SMEs. The problems are significant but we must ensure that the problems become opportunities. For instance, there is no power in the country that’s why we now have a lot of SMEs going into the solar power business. We also do a lot of advocacy to bring SMEs together to enjoy certain facilities. For example, a lot of SMEs cannot afford health insurance for their businesses because it is too high but they still need to be healthy. So, we tell them to come together to do it and benefit because we know that the law of insurance is numbers. We have them also insuring against accident, life and so on. So, we see how we can make them work effectively by grouping them to make them have the bargaining power. Even for solar, the government started the solar market and then they interacted with us at the chamber. We saw how we can encourage SMEs to go into it too. In Sura market now, for example, everybody uses solar there, and in Sabon Gari market. The way to deal with challenges of SMEs is to apply low cost solutions because a typical SME cannot afford high cost finance and even high cost data for their phones. To a large extent, we are seeing success but in low numbers because if you advocate for solar for SMEs in Sura market, you have only taken care of about 200 traders. The national impact is not visible yet, but we can see at the LCCI that efforts are in. I think it is very important to first identify that these problems are there and that gradually, they are scaling up.
How ailing SMEs can thrive
The first thing we do for SMEs is to give them maximum discounts. So, what they pay is not what the big companies pay, yet the value is there. We then group them in an area where they can have visibility even when they enjoy massive discounts. There is no how you will be at the Trade Fair and not notice their hub segregated into sectors. For all the promotions that we do, we also engage them. We have the NASME and SMEDAN, even the SME Group of the LCCI doing that.
This year, the UBA also has some discounts for the SMEs. We give them visibility so they can get value because they are the economy we know. The very large companies admit a maximum of 5,000 employees but SMEs can employ millions of people if they do a minimum of 10 each. As of 2017, we had about 37 million SMEs in the country. Imagine if they can employ 10 people each. That would be huge. That is how unemployment can be wiped out of this country. So, that is how much we are concerned about SMEs. We try to organise access to funds for them and we run training programmes all year round and a lot of them are for SMEs.
All the exhibitors are independent entities running their businesses under their normal practices. We only provide a platform for them to run their businesses and it is in their own interest to attract visitors and customers. So, when you get to the trade fair, you get a lot of high discounts because they want to encourage people to do their Christmas shopping. So, it is a platform for encouraging very good bargains for them. All the exhibitors try to do that. We don’t know their cost and cannot say you must sell at a particular price. There is no product or service that has only one exhibitor. So, competition forces everybody to want to get their own share of the market.