MICRO, SMALL AND MEDIUM -SCALE ENTERPRISE (MSME) DEVELOPMENT IN BAYELSA STATE: PARTNERING WITH UNIVERSITIES Prof. Mobolaji E. Aluko Vice-Chancellor, Federal University, Otuoke Talk Presented to 2013 SME Summit (Enterpreneurial Capacity Building Workshop) May 2-4 2013 @ Yenagoa
Outline of Talk: *Introduction * SomeTroubling Quotes * MSMEs a World Perspective *Nigeria s & Bayelsa s MSME Sector *Education - Meeting the Challenge *Looking forward *Info on Federal University Otuoke *Concluding Thoughts
Introduction Expression of Gratitude to *Bayelsa State Government *Various Donors to this Summit *ESDU-FUO (Enterpreneurship and Skills Development Unit the Federal University, Otuoke) *Participants
A Troubling Quotation [Umar] decried the near neglect of the Small and Medium Enterprises (SMEs) sub-sector. He said the development of SMEs in the country has been largely ignored; a situation which he lamented has led to the slow growth of the sub-sector and lack of positive national development - SMEDAN Director-General Muhammad Nadada Umar (Small and Medium Enterprises Development Agency of Nigeria) (Daily Independent, May 18, 2012)
Another Troubling Quotation It is regrettable that 35 per cent of Nigerians over 15 years are illiterates, with two-thirds of them being females. - Executive Secretary of the National Mass Literacy, Adult and Non-Formal Education Commission (NMEC), Alhaji Jibrin Yusuf Paiko [Independent, May 18, 2012]
The Nexus Between Education & Business Education makes businesses sustainable, while businesses engage our youths positively, making them both politically and economically independent. Therefore, the importance of collaboration between NMEC which educates, and SMEDAN which trains in skill, cannot be overemphasized. It is the only way business development, survival and sustainability can be ensured... This is why NMEC, a basic education outfit mandated to educate and empower adults and youths is establishing vocational training centres to develop the relevant people in skill acquisition. We believe this will go a long way in reducing youth restiveness in the country, [Independent, May 18, 2012]
My Definition of Slavery *An un-employed person cannot be politically and economically independent *A person that is not both politically and economically independent is a slave *Syllogism: An un-employed person is (practically) a slave! *A government that cannot and does not actively and continuously find employment for the greatest number of its citizens that are willing and able to work is a slaving government
Another Quote [Minister Aganga] lamented.. the [alarming] rate of unemployment in the country.. saying that the best way to checkmate the situation is to have a virile MSME sub-sector..[recently] SMEDAN, in conjunction with NBS, revealed that there are close to 20 million MSMEs in Nigeria, [representing] over 80%of the total number of enterprises and 75% of Nigeria s total employment base. If we don t create an enabling environment for this important sub-sector to thrive, we will all suffer its negative consequences, he said, adding that the MSME community has been complaining bitterly of not being able to access cheap funds from the banks and that where services are available, it takes the banks forever to process them, noting that the vision of the Ministry of Trade and Investment is to increase the contribution of SMEs to the nation s Gross Domestic Product from 10% cent to 30% and increase export earnings through SMEs from 3% to 25% within the lifetime of this administration.
Small Scale Enterprises World-Wide In many developed countries, *Number: more than 98% of all enterprises belong to the SME sector *Labour Force: 80% of the total in Japan, 50% in Germany and 46% in USA are employed in smaller firms. *Contribution to National Income: In USA, small business contributes nearly 39% to the national income. Figures in many developed countries are even higher. Source: CENTRAL BANK STUDY 2003
Micro-, Small-, and Medium-Scale Enterprises (MSME) and Large-Scale Enterprises Definitions for Nigeria First Defined 1992 and revised Every Four Years Definitions agreed at the At the 13th Council meeting of the National Council on Industry held in July, 2001 Micro/Cottage Industry An industry with a labour size of not more than 10 workers, or total cost of not more than N1.50 million, including working capital but excluding cost of land. Small-Scale Industry An industry with a labour size of 11-100 workers or a total cost of not more than N50 million, including working capital but excluding cost of land.
Micro-, Small-, and Medium-Scale Enterprises (MSME) and Large-Scale Enterprises Definitions for Nigeria (Ctd) Medium Scale Industry: An industry with a labour size of between 101-300 workers or a total cost of over N50 million but not more than N200 million, including working capital but excluding cost of land. Large Scale An industry with a labour size of over 300 workers or a total cost of over N200 million, including working capital but excluding cost of land.
Micro-, Small-, and Medium-Scale Enterprises (MSME) and Large-Scale Enterprises Definitions for Nigeria (Tabular Summary) S/N Type of Enterprise Labour Force Total Cost (including Working Capital and Excluding Land) 1 Cottage/Micro 1-10 N1.5 million 2 Small-Scale 11-100 N50 million 3 Medium-Scale 101-300 N50-200 million 4 Large-Scale >300 >N200 million
MSMEs in Nigeria (2012) about 17-20 million MSMEs representing over 80% total number of enterprises 75% of Nigeria s total employment base, employing about 31 million Nigerians.out of 87 million (?) labour force (15-64 year olds) Important question to determine: What are these numbers for Bayelsa State? Medium 1,654 [Bayelsa 0] 50-199 Employees Small 21,264 [Bayelsa 134 or 0.63%] 10-49 Employees Micro 17,261,753[Bayelsa 42,099 or 2.43%] <10 Employees TOTAL 17,284,671 [Bayelsa 42,233 or 2.43%]
MSMEs Compared Nigeria and Bayelsa (UNDP s Niger-Delta Human Development Report, 2006) S/N Type of Enterprise Labour Force No. in the Nation No. In Bayelsa % Bayelsa 1 Cottage/Micro 1-9 17,261,753 42,099 2.43 2 Small-Scale 10-49 21,264 134 0.69 3 Medium-Scale 50-199 1,654 0 0 Total 1-199 17,284,671 42,233 2.43
BAYELSA STATE S/N LGA HQ 2006 Census MALE FEMALE 1 Brass Brass 184127 94359 89768 2 Ekeremor Ekeremor 269588 137753 131835 3 Kolokuma /Opokuma Kaiama 79266 39952 39314 4 Nembe Nembe 130966 66768 64198 5 Ogbia Ogbia 179606 92015 87591 6 Sagbama Sagbama 186869 95667 91202 7 Southern Ijaw Oposuma 321808 165329 156479 8 Yenagoa Yenagoa 352285 182240 170045 Total 1,704,515 874,083 830,432
Some Comparative Data on Nigeria and Bayelsa State S/N Item Nigeria Bayelsa State 1 Population (2006 Census) 2 Size (sq. km) 3 Number of LGs 4 GDP (PPP) Per Capita 2011 est. 5 GDP (Nominal) Per Capita 2011 est. 140 million %Bayelsa 1.70 million 1.2% 923,768 11,007 1.2% 774 8 1.03% $2,578 n.a. n.a. $1,490 n.a. n.a.
HUMAN DEVELOPMENT INDEX (HDI) IN THE NIGER-DELTA REGION 1992, 2005 All except Bayelsa, Delta and Edo improve between 1992 and 2005 Bayelsa 3 rd Highest (out of 9 States) in 1992; Lowest in 2005
REVENUE ALLOCATION TO THE NIGER-DELTA STATES MAY 1999 OCTOBER 2005 In Decreasing Order of Revenue Allocation (May 1999 Oct. 2005): Delta - Rivers - Bayelsa - Akwa-Ibom - Ondo - Imo - Cross Rivers - Edo - Abia
Nigeria Population Structure 160 million people, almost 1 million square kilometers (roughly 1,000 km by 1,000 km), 36 states, 774 local governments, 120,000 wards, 4 neighboring countries (with international borders with 16 of the Nigerian states). Arable land and rich mineral deposits Population (CIA.gov): 170,123,740 (July 2012 est.) Age structure (CIA): 0-14 years: 40.9% (male 32,476,681/female 31,064,539) 15-64 years: 55.9% (male 44,296,228/female 42,534,542) 65 years and over: 3.1% (male 2,341,228/female 2,502,355) (2011 est.) Age structure (NBS): 0-14 years - 39.6%, 15-64 (the economically active population) -56.3%, 65 years and above - 4.2%
Nigeria Population Needs Information Nigerians Need to be: *1. Fed *8. Clothed *2. Housed *9. Powered *3. Educated *10. Protected *4. Transported *11. Medicated *5. Entertained *12. Informed *6. Beautified *13. Religionized *7. Buried *14. Any Other needs?
SUSTAINABLE LIVELIHOODS Needed Capital Assets: Natural Human Physical Social Financial
Map of Africa Central Portion centered on Nigeria Opportunities should abound for Nigerian MSMEs in West Africa
Map of Nigeria showing 36-state structure Opportunities should abound for state-based MSMEs in Nigeria
Opportunities should abound for LG-based MSMEs in Nigeria
Nigeria (Un)employment Information The unemployment rate can be defined as the number of people actively looking for a job divided by the labour force. The employment rate is defined as the number of people currently employed divided by the population of working age. Changes in unemployment depend mostly on inflows made up of non-employed people starting to look for jobs, of employed people who lose their jobs and look for new ones and of people who stop looking for employment.
Nigeria Unemployment Information (ctd) Related terms are the labour force, the participation rate. The labour force is defined as the number of people employed plus the number unemployed but seeking work. The nonlabour force includes those who are not looking for work, those who are institutionalised such as in prisons or psychiatric wards, stay-at home spouses, children, and those serving in the military. The participation rate is the number of people in the labour force divided by the population of working age that is not institutionalised.
NIGERIA S UNEMPLOYMENT FIGURES 2006 to 2011
UNEMPLOYMENT INTERNATIONAL FIGURES Kenya:11.7% Egypt:11.8 % Botswana: 17.5 % South Africa, Angola: 25 % Namibia: 51% European Union: 10.7% 2007 to 2011 Changes in Unemployment Rates Ireland: 4.8% to 14.3% USA: 5% to 9% UK: 5.3% to 8.1% Latvia: 5.4% to 16.5% Italy: 6.7% to 8.3% Greece: 8.07% to 18.4% Spain: 8.6% to 21.52%
Challenges of MSMEs *Cost of energy (power, transportation) *Access to, and High Interest rates of, Loans *Owner-manager rather than separate corporate entity *High risk largely due to their informal nature and poor partnership spirit *Inability to prepare bankable business plans and other skills *Poor record keeping * High Dependence on imported raw materials and spare parts *Discriminatory cultural practices
STAKEHOLDERS FOR SME SUCCESS Central Bank Study - 2003
BAYELSA STATE FRAMEWORK FOR SME IMPLEMENTATION (2013)
Meeting the Challenges of MSMEs Via Education *Science & Technology *Education about Business Enterprises *Entrepreneurial & Accounting Skills Acquisition *Cultural re-orientation Universities have a key role to play in education and extension services
Success factors of MSMEs *Existence of business opportunity *Adequacy of capital and credit *Ingenuity and ability of management *Application of modern technology for cost and competitive effectiveness *Success (pilot programs) breeding more success
BAYELSA STATE OCTOGONAL MODEL FOR SME INDUSTRIAL CLUSTERS
INFORMATION ON FEDERAL UNIVERSITY OTUOKE
From Port Harcourt to Yenagoa to Otuoke
Site of the University at Otuoke
PANORAMIC VIEW OF THE FU OTUOKE CAMPUS
Site of the University at Otuoke Skills Acquisition Center
The Heart of a First-Rate University *Students eager to learn in and out of classroom *Leading scholars rooted in fundamental knowledge *Dedication to teaching and research *Funded cutting-edge research in niche areas, with excellence and impact as key aims *Pervasive use of information and communications technology (in teaching, research, administration) *The development of the complete person critical thinkers (science and liberal arts integration) *Orientation towards service, entrepreneurship, environmental stewardship and global perspective
Mission: The mission of the Federal University, Otuoke is the generation, dissemination, preservation, and application of knowledge. Vision: The vision of the Federal University, Otuoke (FUO) is to gain and maintain a reputation as a world-class university that challenges all its students to achieve the highest levels of intellectual and personal growth, to promote sustainable development, as well as contribute purposeful and ethical service to the nation and Mankind. Core Values: LIKES Learning,Integrity,Knowledge,Excellence,Service
Academic Brief (Otuoke) *Top-quality ICT-enhanced education (instruction and research) in a public university setting but with a private institution feel *Focus on relevance and quality rather than quantity of programs and course offerings *Course loads that are reasonable, with liberal arts experience infused throughout the university life of the student * Graduating students with a common experience: ICT compliance, community service, international experience, environmental stewardship
CONCLUSION The Federal University Otuoke will seek to be engaged with the SME sector in the Niger-Delta Region, beginning with Bayelsa State The University chooses to adopt the MSMEs not just as a concept, but as a reality to be actively promoted, particularly to enhance both certified and degreed graduate employment
SO THAT WE MAY HAVE MILITANCY NO MORE
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