THE ROLE OF NIGERIAN GOVERNMENT IN DEVELOPING SMALL AND MEDIUM SCALE ENTERPRISES
The government of Nigeria has an obligation to create a conducive environment that stimulates growth of the real sector through infrastructure development, enactment and implementation of result-oriented economic policies, increased budgetary allocations to productive sectors, and establishment of responsive production and trade control mechanisms (Onugu., 2005). On this note, the major economic objectives of the federal government are:
- To restructure Nigeria’s monolithic economy to be market-oriented, diversified and technology-driven.
- To increase productivity and reduce unemployment level.
- To control inflation and stabilize exchange rate for a healthy balance of trade.
- To reduce cost of financial credits and improve savings.
- To provide major infrastructural facilities for equitable distribution of wealth.
- To instil accountability, transparency and probity in the public service.
- To enhance value-creation and service delivery in the SME sector.
To achieve these objectives, FG has invested huge resources in providing clean water in rural and urban areas through State Water Boards and Local Government-assisted water borehole projects. Other industrialization efforts of the Nigerian government include: privatization of National Electric Power Authority (NEPA), creation of the Emergency Power Programme (EPP), and commercialization of electric power plants across the nation. Remarkably, nationwide Road Construction and Rehabilitation Projects have multiplied the number of accessible roads built by the three-tier government since 1999 (Onugu., 2005).
Further, FG spent ₦50bn as start-up capital for the Bank of Industry (BOI) and set up Small & Medium Industries Equity Investments Scheme (SMIEIS), which allowed banks a maximum of “non-taxable” 10% from their profits but requires the beneficiaries to invest these funds in the SME sector.
To eliminate private use of public funds and ensure legal and fair business practices in all sectors, the federal government also established anti-corruption agencies such as the Independent Corrupt Practices Commission (ICPC) and Economic & Financial Crimes Commission (EFCC). Another effort to rehabilitate SMEs in Nigeria is the promulgation of the Pension Act, which has served as an extra source of income for budding entrepreneurs (Taiwo et al., 2016).
These painstaking efforts are, however, yet to produce the desired outcomes, partly because policymakers neglect SME managers and stakeholders in decision-making processes. Findings show that SMEs make up about 95% of businesses in Nigeria compared to America’s 50% and Europe’s 65%, an opportunity that can be maximized for competitiveness, profitability and sustainable growth in the West African country. The SME sector in Nigeria therefore needs radical initiatives and innovative strategies to remain relevant at the global stage (Abugu., 2007).