Local manufacturers and non-oil exporters have been urged to take advantage of the devalued currency to improve their export capacity and hedge against local challenges, especially under the African Continental Free Trade Area (AfCFTA) deal.
Giving the advice during the Bank of Industry’s (BoI) yearly SME Directorate Customer virtual forum, Senior Special Assistant to the President on Public Sector Matters and Secretary, National Action Committee on AfCFTA, Francis Anatogu, urged small businesses to exploit the opportunities that the COVID-19 pandemic has offered in terms of processes and technology.
According to him, despite the losses associated with the pandemic, COVID-19 aided the adoption of new technologies and strategies to do business.
He noted that with the currency devaluation, Nigeria’s ability to scale reduces but it improves ability to hedge for export.
“The problem we have is the problem of growth. We need to grow our economy to serve the continent. The challenges to AfCFTA implementation border on production, infrastructure, insecurity, predatory trade practices, regulation and funding. We are however working on the opportunities that these challenges present.
“For the trade agreement to work, we need to produce what we will export and equally invest in people. We need to help local demand through patronage and address issues of rising cost of production. The liberalisation of 90 per cent of the products will happen over a 10-year period and this gives us time to develop capacities,” he added.
He equally urged producers to deploy local content in their products to enjoy opportunities in the Rules of Origin (RoO) requirements, adding that products equally have to be certified by regulatory agencies to enjoy benefits of the RoO. He noted that the harmonisation of regulations would equally enhance market access in many countries.
BoI’s Executive Director, Small and Medium Enterprises (SMEs), Shekarau Omar, acknowledged the impact of the pandemic on businesses, adding that the bank had continued to intensify its intervention to the SME segment.
“We are aware of the new normal and how things have changed. Support for SMEs during the pandemic has been described as commendable. We are not unaware of the challenges small businesses face in the country, but we will continue to support you to grow your businesses,” he said.
General Manager, SME North, Dr. Rislanudeen Muhammad, noted that Nigeria was able to exit recession due to the resilience of the economy and efforts of the Federal Government through the Economic Sustainability Plan.
“We complement the efforts of deposit money banks and not compete with them. With 41 million MSMEs, this segment of the economy cannot be ignored due to their job creation potential.
“BoI has been supporting MSMEs in the area of financing and we are not judged by profit but by our capacity to create impact and this is why we are not competing with DMBs,” he explained.
One of the beneficiaries of BoI loan, Mohammed Bello Sani of Belas Rice Limited, while speaking on the challenges of exporting finished goods and importing raw materials, charged businesses to build capacity both in terms of product and personnel.
According to him, businesses need enough capital or line of credit to meet market demand, find ways to reduce financial risk of international trade and deal effectively with different monetary systems.
On her part, Oluremi Martins, while speaking on challenges and opportunities in e-commerce and digital marketing, stated that the internet had created a platform for small businesses to penetrate the market irrespective of locations, adding that businesses should position themselves in the online space.