Steve Ogidan, the founder and Chief Executive Officer of Successory Nigeria Limited has narrated how a restaurant owner lost a catering contract awarded by the United Nations Development Programme for not registering her business and having a bank account linked to her business.
Ogidan shared the experience while speaking on the challenges of Micro, Small and Medium Enterprises (MSMEs) on NIPSS Policy Tv, monitored by THE WHISTLER.
Nigeria officially has about 39.6 million Micro, Small and Medium Enterprises but a lot of them are not captured in the national records because they are not registered.
Most Nigerian MSMEs have been unable to harness opportunities due to poor government policies and a lack of ease of doing business in Nigeria.
A survey conducted by the Small Medium Enterprise Development Agency of Nigeria revealed that MSMEs reduced from about 41 million in 2017 to 39 million in 2021.
The CEO said business registration and proper documentation have cost a lot of small businesses opportunities to secure contracts and funding that would help them expand.
Ogidan narrated, “I was doing training for the United Nations Development Programme in Niger State. Because of the structure of the UNDP governance, they said they would pay me the cost of the training as a consultant but the cost of feeding the participants for the three weeks of training will be paid directly to the restaurant that provides the food and I said I had no problem with that.
“Meanwhile, any time I go to Nigeria State for this training, I always get a restaurant caterer that provides food for them and by the time I called the lady to bring her tax papers and registration papers for us to submit to UNDP, she has no registration paper and bank account.
“How can UNDP pay you without a bank account? Incidentally, the person who got the contract has no restaurant. All she has was a registration paper, the tax paper and a bank account and she got the contract and now outsourced the business again to the person who can do it.”
Ogidan believes that the Nigerian government has contributed to the failure of small businesses through complex registration procedures and difficulty in securing a Tax Identification Number and multiple taxation.
The consultant argued that a major support strategy that the Nigerian government should adopt is making it easy for SMEs to be able to register their businesses.
Ogidan said a business that is not registered ‘does not exist’ officially in government, adding that a seamless registration process would encourage MSMEs and help the government to keep track of their activities.
“The Federal Inland Revenue Service should be able to give them their Tax Identification Number with ease so that they will be recognised.”
Aside the ease of registration, the CEO also said that the government has not done enough to help MSMEs to secure cheap loans through microfinance banks.
“Government is not doing enough; microfinance banks are there and they are not getting support. When the microfinance policy for Nigeria was designed, the original plan was that the government would give wholesale loans to microfinance banks for them to be able to reach out to MSMEs in rural areas,” he said.