The Nigerian Institute of Social and Economic Research has called on the Central Bank of Nigeria to regulate the interest rates charged on loans given to operators of Micro, Small and Medium Enterprises in order to sustain the growth of the sector.
The institute also warned that the MSMEs risked extinction in the absence of adequate infrastructure to enhance their growth, while calling on the Federal Government to focus on the provision of infrastructure such as electricity, transportation and water.
In a paper presented in Ibadan by the Private Sector Group of the Economic Policy Research Department of the institute, it was observed that public-private partnership was needed for the provision of critical infrastructure in the country.
The paper is part of the November edition of the NISER research seminar series and was presented by Dr. Modupe Adeyinka.
She posited that non-governmental organisations, international agencies and philanthropists should be encouraged to complement the Federal Government’s efforts in the provision and repair of existing infrastructure for the MSMEs to develop.
She said, “Government should minimise multiple and unnecessary high taxes imposed on the MSMEs by its agencies. This will assist the growth in capital for the provision and maintenance of infrastructure critical for the MSMEs operation.
“Financial institutions should continue to provide loans at low interest rate for MSMEs, while the Central Bank of Nigeria should regulate interest rates of the financial institutions in the country and provide loans to the MSMEs through organised cooperative societies.”
Adeyinka, however, charged operators of the MSMEs to play their role in the nation’s growth by paying taxes.
While assessing how the role of infrastructure investment could affect the development of the MSMEs in Nigeria, she pointed out that electricity, transport (road), water and communications were critical infrastructure necessary for the growth and development of the sector.
The don said, “These critical infrastructure are important for enterprise growth irrespective of firm size and whether the firm operates in the services, manufacturing or agricultural sector of the economy. Our research findings have shown that these infrastructure, particularly electricity, remain inadequate and poorly maintained in Nigeria.
“The government, through the Small and Medium Enterprises Development Agency of Nigeria, is charged to play its role in infrastructure investment and to provide required infrastructure. SMEDAN is charged to revisit the objectives of the set-up of industrial parks to nurture the MSMEs.”
Adeyinka called on respective trade associations, particularly the Manufacturers Association of Nigeria and National Association of Small and Medium Scale Enterprises to arrange for firms to have continuous enlightenment and awareness about the benefits of locating within an industrial estate.