Role of SME’s in Industrial Revolution
Engr. Emeka Unachukwu fsm,fipdm,fcia
President.
Port Harcourt Chamber Of Commerce
Epilogue
A tale of three companies & Three
Countries
 Exxon Mobil’s revenue > Pakistan’s GDP 2008
 (95,000 employees)
(141 million population)
 General Motors
> New Zealand
 General Electric
> Nigeria
12 Feb 2014
Why are we here?
Dateline -11th February 2014
12 Feb 2014
Jonathan Launches
NIREP, NEDEP
Understanding the Plan
NIRP Nigeria Industrial Revolution Plan
NEDEP National Enterprise Development Programme
Transform the nation’s industrial landscape,
Boost skills development,
Enhance job creation
Conserve foreign exchange
Programme Focus
NIRP Nigeria Industrial Revolution Plan
NEDEP National Enterprise Development Programme
Agriculture and agro-products
Metals and solid minerals,
Oil and gas,
Construction,
Light manufacturing services
Programme Focus
NIRP Nigeria Industrial Revolution Plan
NEDEP National Enterprise Development Programme
Address all the major physical
constraints impeding industrialisation
Improve the nation’s investment climate
Promote the patronage of made-inNigeria products.
Programme Focus
NIRP Nigeria Industrial Revolution Plan
NEDEP National Enterprise Development Programme
Increase Manufacturing sector GDP from
4% to 10% in 5years
Boost the annual revenue earnings of
the Nigerian manufacturers by up to N5
trillion per annum
Make SME’s major driver of job creation
and inclusive economic growth.
Defining Industrialization
The transition of an economy from primarily
agrarian to one based mainly on
manufacturing and industry.
Defining Industrialization
Defining SME’s
SME’S
MSME’S @ 10-50 million Micro 98%
Small 1%
Meduim 1%
Employees Turnover
(annualN)
Turnover
(annualUSD**)
AssetValue
(N)
AssetValue
(USD)
Micro
0-10
0–
10million
0–65000
5million
32000
Small
10-49
10-100
million
65000–
650000
5-50million 32000–
320000
50-199
100-500
million
650000–
3.2million
50–500
million
Medium
320000–
3.2million
Why are SME’s Important
SMEs contributes 50% of GDP …..(OECD).
65% of employment in high income countries are from SMEs.
SMEs generate 70% - 90% of employment in middle income countries.
Significant impact on the export earnings in developing countries.
SMEs enhances entrepreneurship innovation and invention
Why are SME’s Important
SMEs drive technology change and growth in productivity
Catalyst to private sector development
According to IFC, 96% of business in Nigeria fall under SMEs
90% of manufacturing and industrial sector in numbers fall under
SMEs.
Why are SME’s Important
Agencies that support SME’s
Small & Medium enterprises credit Guarantee Scheme (SMECGS) of
CBN.
Small & Medium Industries Equity Investment Scheme (SMIEIS) of CBN.
Family Economic Advancement Program (FEAP)
Industrial Development and Coordinating Centre.
National Directorate of Employment
Nigerian Bank for Commerce & Industries (NBCI)
Agencies that support SME’s
Nigerian Industrial Development Bank (NIDB)
National Economic Reconstruction Fund (NERFUND)
The African Development Bank / Export Stimulation Loan (ADB/ESL)
Nigerian Export Import Bank
Microfinance Banks
Bank of Industry (BOI)
Small & Medium enterprises Development Agency of Nigeria
(SMEDAN).
Understanding SME’s
How SME’s support Industries
How SME’s support Industries
 Important source of local supply and service
provision to larger corporations
 Extensive local knowledge of resources, supply
patterns and purchasing trends
 By working closely with SMEs, large corporations
can develop a new customer base that may not be
accessible to the traditional distribution networks
of these corporations.
 Important source of innovation – SMEs tend to
occupy specialized market “niches” and follow
competitive strategies that set them apart from
other companies
Examples from other Countries
Brazil/South Africa DaimlerChrysler: local and sustainable
sourcing of raw materials for automobile production.
India/Unilever: employing women entrepreneurs to
distribute health and hygiene products locally (India)
Azerbaijan/BP: enterprise center to build capacity and
create employment among local companies)
South Africa/Vodafone: co-investing with local
entrepreneurs t o establish phone kiosk
ABN Amro and GE: providing microcredit and finance to
SMEs
Case Study – Industrialized Nation
Case Study – JAPAN
Backbone of Japan’s Economy
99.7% of all Enterprises,
70% of Employees,
50% of the amount of value-added (in the
manufacturing industry
Case Study – JAPAN
Creating new industries &
transforming industrial
structure
Toyota, Honda, and Sony all started as back
street factories
Case Study – JAPAN
Supporting Big Companies
All parts consumed by the big companies
are produced by SME’s
Reliability of Japanese products
Case Study – JAPAN
Revitalizing Local Economy &
Increasing Employment
Great support to service, construction
and retail industry;
Case Study – JAPAN
“SMEs energize Japan’s future!”
The Government Policy implementation organization
for management support in SME sectors.
HokkaidoHeadOffice
● Our nationwide support network
9 Regional Head Office & 9 SME universities
Approx. 800 employees
TohokuHeadOffice
Over 3000 registered experts
HokurikuHeadOffice
(ex. lawyers, CPAs, tax accountants, management consultants, etc.)
Kanto HeadOffice
ChugokuHeadOffice
● Features of our support
Multiple/comprehensive support
ChubuHeadOffice
KyushuHeadOffice
KansaiHead Office
ShikokuHeadOffice
Hands-on support
Extensive/high-quality support utilizing
the networks
Matsuyama Office
5
Conclusion
Why Nigeria SME’S May Not Play
Effectively Support the Industrial
Revolution
Lack of
Management
Competence
16%
Poor
Management
of Financial
Activities 34%
Inflation &
Economic
Union
Conditions
Problems 6%
12%
Poor
Bookkeeping
& Records
12%
Sales &
Marketing
Problems 11%
Staffing
Problems 9%
Thanks for Listening
Engr. Emeka Unachukwu
President
Port Harcourt Chamber Of Commerce
emeka.unachukwu@gmail.com
+447924575439, +2348134489407