There is the need to integrate the taxes to lighten the burden of taxes on businesses and ensure that they remain in business. Government must also show more political will towards SMEs in order to attract more people to the industry.
To stimulate industrialization in the country, the Chief Executive Officer of Elephant Group Holdings, Mr. Tunji Owoeye has tasked policy makers to grow the economy by ensuring that majority of businesses come up from the Small and Medium Scale Enterprises which have the capacity to contribute about 48 per cent to the nations’ Gross Domestic Product (GDP).
According to the Development Finance Institution (DFI), the number of SMEs in Nigeria currently stood at about 17million employing 25per cent of the total labour force, which constitutes 32.41Million persons amid multiplicities of challenges bedeviling the survival of the businesses.
Speaking on the theme: “Financing SMEs in a recession-for industrialization” at the Annual Public Lecture and Luncheon organized by the Nigerian Society of Chemical Engineers (NSCHE) Lagos/Ogun Chapter held in Lagos, Owoeye observed that empirical evidence has shown that finance contribute only 25 per cent of the failures of the sector in Nigeria while inability of the operators to distinguish between profit and revenue, multiplicity of tax regimes, unfavourablle fiscal policies, lack of infrastructure and succession plan among others have negatively impacted the growth of SME’s.
“Many SMEs fail between 3 to 4 years of their establishment due to multiple tax regimes from the local, state and federal government. This limits businesses. There is the need to integrate the taxes to lighten the burden of taxes on businesses and ensure that they remain in business. Government must also show more political will towards SMEs in order to attract more people to the industry”.
He explained that the observable difficulties in lending to the operators by banks is largely due to structured deficiencies of SMEs in terms of lack of customer identification, taxation laws, credit bureaus as well as collateral registries.
Owoeye who is also an Executive Member of the Agric Committee of Nigeria Economic Summit Group (NESG) urged would-be entrepreneurs to take advantage of the various SMEs targeted funds from the government and non-governmental organization such as the Tony Elumelu $100Million, the Lagos State Employment Trust-fund of up to N5Million, the N300billion power and Airlines Intervention Fund and the Federal Government Social Intervention Fund of about N6billion amongst others.
“Businesses require funding forever, though the type of funding changes as time rolls by but it requires finance for sustainability. It will shock you that some businesses have 50years projection plan and as dynamics of the environment keep coming, you need to review the projections to make the business sustainable. Skill sets are also a key resources and it must be efficiently deployed to result and for success to be made in SMEs”, he stated.
In his remarks, the Chairman of NSCHE, Lagos/Ogun Chapter, Dr. Kamilu Oyedeko said the prevailing economic situation in the country calls for innovation and investment in the SMEs sector to earn a good life. He stressed the need for government to provide basic infrastructure and further ease the cost of doing business to boost entrepreneurial spirit of Nigerians. Oyedeko commended the guest lecturer for sharing his expertise with members of the profession and urged the gathering explore the sector for economic growth.
Presenting the new corporate inductees to gathering, the National President of (NSCHE), Prof. Samuel Adefila charged them to uphold the ethics of the profession and work hard for its development. He thanked awardees at the event, which include; the Director General of Federal Institute of Industrial Research (FIIRO), Oshodi, Prof. Gloria Elemo, Dr. Dele Makanjuola, Dr. Samuel Anyakora, Mr. Kareem Salami amongst for their laudable contributions to the growth of the society.