For any nation to experience sustainable development defined by economist as a development which meets the needs of present generation without endangering/compromising the needs of future generation, there the need for business development. Industrial associations and support agencies exist to accelerate sustainable development. What are the meanings of industrial associations and support agencies? What are the roles they perform with regard to enterprise development in Nigeria?
Industrial associations are bodies established to support and protect the rights of a particular industry and the people who work in that industry Business (English Dictionary, 2010). Industrial associations in Nigeria lobby and urge governments or its agencies to take stronger action on things affecting their members or their line of interests. Those active in the Nigerian business environment include:
i. National Association of Small and Medium Enterprises (NASME): NASME is a Nigerian private sector association, which brings together Small and Medium Scale enterprises across the country. It was registered in 1996 as a Business Membership Organization (BMO) to coordinate and foster the promotion of Micro, Small and Medium Enterprises (MSMEs) in Nigeria. It is devoted to networking, capacity building; policy advocacy and promotion of the performance of its member firms and operators. It works consistently to improve the welfare of its members.
ii. Nigerian Association of Small Scale Industrialists (NASSI): This association was established in 1978 to cater for the needs of the small scale business industrialist through the provision of socio-politico economic support for the members. NASSI organizes workshops, conferences, exhibitions, trade-fairs, study tours and also provides advisory services to the members. It also provides information on sources of raw materials, market situations, plants and equipments and the required manufacturing standard. NASSI grants micro credit facilities to members and sometimes stands as sureties for bonafide small and medium enterprise (SME) in their relationship with development finance institutions. The association links up its members with various opportunities both at home and abroad as well as serving as the mouthpiece of members against unfavourable public policies.
iii. Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA): NACCIMA was founded in 1960 as a voluntary association of manufacturers, merchants, mines, farmers, financers, industrialists, trade groups who network together for the principal objectives of promoting, protecting and improving business environment for micro and macro benefits. The body provides a network of national and international business contacts and opportunities. It also promotes, protects and develops all matters affecting commerce, industry, mines and agriculture and other form of private economic activities by all lawful means. NACCIMA promotes, support and oppose legislative and other measures affecting commerce, industry, mines and agriculture in Nigeria as well as contributing to the overall economic stability, orderly expansion and social, political and economic development of Nigeria.
iv. Manufacturers’ Association of Nigeria (MAN): This was formed as a company limited by guarantee to perform important roles on behalf of its members as well as the development of the country. The Manufacturers’ Association of Nigeria performs so many functions. The body encourages a high standard of quality for members’ products through the collection and circulation of useful information and the provision of advice. Secondly, it encourages the patronage of Nigerian made products by Nigerians and by consumers in foreign countries. Thirdly, it develops and promotes the contribution of manufacturers to the national economy through government. Furthermore, it provides the manufacturers in the country with information on industrial, labour, social, legal, training and technical matters.
v. Nigerian Employers Consultative Association (NECA): It is the umbrella organization for employers association of Nigeria and was founded in 1959 with its memberships drawn from the private and public sector employers associations. It performs many roles in Nigeria. Firstly, it promotes and encourages any technical or other forms of education for the development of employees. Secondly, it assists in the maintenance and promotion of good relations between members and their employees. Thirdly, the body encourages the payment of equitable rates of wages and salaries to the employees. Lastly, it promotes influences, modifies or seeks the repeal of legislative and other resources affecting or likely to affect the employers.
vi. Small and Medium Enterprises Agencies of Nigeria (SMEDAN): This agency was established by the SMEDAN Act of 2003 to promote the development of the MSME Sector of the Nigeria economy. Its mission is to facilitate the access of micro, small and medium entrepreneurs/investors to all the resources required for their development.
SUPPORT AGENCIES IN NIGERIA FOR MSMEs
Support agencies refer to public and private agencies that provide support for enterprises in areas related to production and product development, financial management, administrative and human resource systems, institutional and organizational design, technology upgrades, and product/service marketing. The interventions of support agencies are offered through advocacy, workshops, financial support, technical advice and trainings. Some of the support agencies in Nigeria include:
i. Traditional Micro-Finance Institutions: Before the emergence of formal microfinance institutions, informal microfinance activities flourished all over the country. Informal microfinance credit is provided by traditional business support groups that work together for the mutual benefits of their members. The informal microfinance arrangements operate under different names: ‘esusu’ among the Yorubas of Western Nigeria, ‘etoto’ for the Igbos in the East and ‘adashi’ in the North for the Hausas. The key features of these informal schemes are savings and credit components, informality of operations and higher interest rates.
ii. Community-Based NGOs: Community-based NGOs provide micro credits to their members in order to keep their businesses going, few of these institutions are: Farmers’ Development Union (FADU) Ibadan; Community Women and Development (COWAD) Ibadan; Country Women Association of Nigeria (COWAN) Akure; Life Above Poverty (LPO) Benin; Justice Development and Peace Commission (JDPC) Ijebu-Ode; Women Development Initiative (WDI) Kano; Development Education Centre (DEC) Enugu; Development Exchange Centre (DEC) Bauchi; Outreach Foundation (OF) Lagos; and lastly Nsukka Area Leaders of Thought United Self-Help Organization (NLTNUSHO), Nsukka.
iii. National Directorate of Employment (NDE): The National Directorate of Employment (NDE) was established to give training opportunities to the unemployed, especially the youth, by providing guidance, finance and other support services, to help them create jobs for themselves and for others. A major problem of the programme has been inadequate funding. Nearly two million people have benefited from the NDE programmes.
iv. National Poverty Eradication Programme (NAPEP): This programme commenced in 2002, as a platform for poverty eradication and business empowerment. There are four major intervention schemes in Nigeria’s current poverty eradication programme. One of them is targeted at youth – the Youth Empowerment Scheme (YES). The brochure describing the YES programme emphasizes that YES is more than an employment scheme as it is aimed at the provision of training opportunities, skill acquisition, employment opportunities, wealth creation through enhanced income generation, improved social status and rural development. It is primarily aimed at the economic empowerment of youth. Despite the massive tax payers’ money appropriated to NPAPEP poverty and destitution is still waxing stronger in Nigeria.
v. Micro Finance Institutions (MFI)/Micro Finance Banks (MFB): These are set up to meet the credit needs of the rural and urban poor, artisans, farmers, petty traders, vehicle mechanics, etc. Central bank of Nigeria gave a directive to all erstwhile Community Banks were converted to MFI in December 2006 through recapitalization to meet the new guidelines for setting up of MFI. In Nigeria, there are many MFI or MFB providing easy and cheap micro-credits to small business owners in Nigeria.
vi. Community Banks: This is a defunct financial institution created to support MSMEs. While operational, the community banks were designed around the informal mutual savings and loan associations operating in rural areas. Organized by the government sponsored National Board of Community Banks (NBCB), these financial institutions are meant to be self- sustaining and managed by communities to provide credit and deposit banking facilities. These banks use the strong local networks present in many rural areas of Nigeria and community boards are generally drawn from respected leaders within the community.
vii. Small and Medium Industries Equity Investment (SMIEIS): The Bankers’ Committee took a decision that 10 per cent of the funds accruing to the Small and Medium Industries Equity Investment (SMIEIS) would be channeled to micro enterprises through registered microfinance institutions. Under the SMIEIS arrangement, banks in Nigeria agreed to set aside 10 per cent of their pre-tax profit annually for equity investment in small and medium industries. In December, 1999, the Small and Medium Industries Equity Investment Scheme (SMIEIS) was initiated, conceived and designed by the Bankers’ Committee at its 246th meeting. The scheme has not been very successful because it has a lot of conditionalities attached to access, hence the utilization rate of the accumulated fund in only 3 per cent.
- viii. Raw Materials Research and Development Council (RMRDC): This is an agency of the Federal Government of Nigeria vested with the mandate of promoting the development and utilization of Nigeria’s industrial raw materials. First mandate is to draw up policy guidelines and action programmes on raw materials acquisition, exploitation and development. Second mandate is to review from time to time, raw material resources availability and utilization with a view to advising the federal government on the strategic implication of depletion, conservation or stock piling of such resources. Third mandate is to advise on adaptation of machinery and process for raw materials utilization. Fifth mandate is to provide special research grants for specific objectives and service awards or systems for industries that achieve breakthrough or make innovations and inventions. Fifth mandate is to encourage the publicity of research findings and other information relevant to local sourcing of raw materials. MSMEs could benefits from RMRDC’S research works/findings.
ix. Nigerian Export-Import Bank: The Nigerian Export-Import Bank (NEXIM) was established by Act 38 of 1991 as an Export Credit Agency (ECA) with a share capital of N50, 000,000,000 (Fifty Billion Naira) held equally by the Federal Government of Nigeria and the Central Bank of Nigeria. The Bank which replaced the Nigerian Export Credit Guarantee & Insurance Corporation earlier set up under Act 15 of 1989, has the following main statutory functions: One, provision of export credit guarantee and export credit insurance facilities to its clients. Two, provision of credit in local currency to its clients in support of exports. Three, establishment and management of funds connected with exports.
x. Nigerian Economic Summit Group (NESG): The Nigerian Economic Summit Group is a private sector think-tank body established to facilitate and carry out all activities that lead to the implementation of acceptable policies for the economic growth and development of Nigeria. The aim of the NESG is to create an enabling environment conducive to good governance, responsible private sector investment and sustainable economic growth. The priority of the NESG is to promote a private sector driven economic growth. The NESG vision is to become “Nigeria’s leading private sector think tank committed to the development of a modern globally competitive economy.
xi. Nigerian Export Promotion Council (NEPC): This council was established in 1976 and formally inaugurated in March, 1977 through the promulgation of the NEPC Act. In order to minimize the bureaucratic bottlenecks and increase autonomy in dealing with members of the organized private sector, the act that set it up was amended in 1992 through a decree. It has as it is goal the promotion of the non-oil export sector as a significant contributor to Nigeria’s GDP, facilitates opportunities for the exporters to promote sustainable economic development. If you your production is export- driven go to NEPC.
xii. Federal Institute of Industrial Research, Oshodi (FIIRO): The primary objective of FIIRO is to assist in accelerating the industrialization of Nigerian economy through finding industrial utilization for the country’s numerous raw materials and upgrading indigenous production techniques. Some government agencies, private organisations and non-government international organisations do approach the Institute to carry out innovative research works that would be of benefits to the society.
- xiii. Nigeria Investment Promotion Commission (NIPC): This agency was established in 1995 to coordinate, monitor, encourage and provide necessary assistance and guidance for the establishment and operation of enterprises in Nigeria.
- xiv. United Nations Development Programme (UNDP): The United Nations Development Programme (UNDP) is on ground in more than 400 communities in the 36 states of Nigeria including the Federal Capital Territory. It assists the country in building capacity as well as managing the economy to be able to fight poverty. One of the four programmes supported by the UNDP is Job Creation and Sustainable Livelihood. Micro credit delivery aims at increasing access of communities to small loans and other productive inputs to empower them and expand their livelihood opportunities. From the foregoing, discussion it clear that industrial associations and support agencies provide monumental assistance for entrepreneurial development in the forms of training, logistics and funding for their members, clients and support-seekers.
In conclusion, local prospective investors are advised to contact the industrial associations and support agencies in Nigeria to avail themselves of the invaluable benefits waiting to be explored. Join us in our next edition to appreciate the concept of entrepreneurship education.