Obstacles to SMEs, by IHS boss

The largest mobile telecommunications infrastructure provider in Europe, Africa and the Middle East, IHS, has said that the import and customs charges, which are often unpredictable and costly, place an additional burden on businesses’ growth potential in Nigeria. IHS, which stated this in a report, sets out the factors that empower SMEs and looks to identify both what is driving growth as well as the issues holding them back. Executive Vice Chairman and IHS Towers Group Chief Executive Officer, Mr. Issam Darwish, disclosed this in a report launched to coincide with the World Economic Forum on Africa. The study – the Economist Intelligence Unit, titled: “Enabling a more productive Nigeria: Powering small and medium enterprises (SMEs) was sponsored by HIS. Darwish said: “Many of us have invested in Nigeria’s future prosperity, yet, little is known about the universe of Nigerian SMEs and the entrepreneurs behind them, particularly the obstacles and enablers of their growth.”

He said that the report recognises the efforts of government institutions in supporting SMEs, but, also importantly, shines a light on the innovative thinking embedded in this vital part of Nigeria’s economy. “It helps us all to understand what can be done to support their growth and drive their productivity,” he said. The HIS boss said that the importance of mobile telecommunications and its role as a leapfrog technology is readily apparent from the study, “affirming our belief that an enhanced mobile network materially contributes to the growth of both urban and rural businesses, with the potential to reduce societal inequality.” Darwish stated that a way to lessen the urbanrural digital divide is to deepen the application of mobile networks to agriculture, the sector in which the majority of Nigeria’s rural dwellers work.

“Combined with improved mobile networks in rural regions, the penetration of ICT across wider geographies will significantly support favourable income distribution trends throughout the continent,” he said. Darwish explained that for IHS, the report is fundamental to its business. “Our belief is that the future economic and social development of Africa will be accelerated exponentially by mobile connectivity, and our team of over 2,000 engineers in five countries is focused on making this happen. We are committed to developing the communities we serve and to help people and businesses across the region build a powerful, prosperous future,” he added.

The study looks at SME productivity across five categories such as policy, transport, technology, energy and finance, combining SME interviews from across the country, with expert insights. The findings suggest that Nigeria’s government has supported SMEs by reducing the costs of registering a business and through the launch of SME-targeted funds. However, Darwish said that further attention should be given to the tax system, Nigerian SMEs are subject to complex and overlapping rules, which need to be streamlined and simplified.

“In addition, import and customs charges are often unpredictable an costly, placing an additional burden on businesses, with no recourse available through official channels,” Darwish said. On infrastructure, the report explores how SMEs are being affected by mobile networks, transport and power deficits. While transport projects and power privatisation are underway, these will take time to deliver benefits. In the interim, SMEs, he said, are adopting innovative technologies from solar panels to cloud computing.