Institute to Buhari: ensure growth of SMEs
THE Institute of Credit Administration (ICA) has challenged the president-elect to boost the growth and development of the small and medium scale enterprises in the country.
In a statement issued by the Registrar/ Chief Executive Officer of the Institute, Professor Chris Onalo, he said, the only way for the operators in the sector can contribute their quota to the accelerated growth of the economy is if they are given the necessary incentives.
In the statement, which reads in part, Onalo said: “Every day across Nigeria, dozens of small and medium sized enterprises (SMEs) go bankrupt as their invoices are not paid. As a result jobs are lost and business opportunities remain unexploited, stalling the country’s return to economic growth.”
To stem this tide, there is need for the president-elect, to set agenda for combating late payment in commercial transactions throughout the country, he said.
“The government on her own part must compel her ministries, departments and agencies and other authorities to pay for goods and services supplied by SMEs within three weeks or, in very exceptional circumstances, within 30 days.
“Definitely, part of the problems that undermine the growth of SMEs is that they find it particularly difficult to stand up for their right to prompt payment; late payments mean SMEs lose time and money. This damaging late payment culture has to end so as to give SMEs the vital support they need in these difficult times and helping them fulfill their key role in job and wealth creation.”
Timely access to cash is critical for SME business success and therefore there must be a condition for every government contract that SME contractors must be paid within 30 days and this should be passed down the supply chain, he maintained.
“Today, the council of the Institute of Credit Administration (ICA), the body charged with the responsibility for setting standards and monitoring the activities of those who give, take, manage and facilitate credits, call on the incoming administration of General Muhammadu Buhari to pledge and establish policy commitment to increase support for Nigeria’s small and medium sized enterprises (SME’s) by equally calling on big businesses in the country to adopt similar prompt payment policy (PPP) in favour of SMEs. As it is known all over the world, prompt payment is crucial to smaller companies survival.”
Besides, he said: “There must be a policy of paying bills involving supplies and other business transactions that has been carried out by SMEs for big companies, starting with the government within one to two weeks from the date that they submit their invoice. When work has been done, especially by an SME, it is just inexcusable not to pay up quickly for that service or supply. On our own part as Nigeria’s national body for credit management, we will be keeping a close eye on how government and the big companies pay their SME contractors.
“SMEs are the lifeblood of the economy, their innovation, speed and flexibility is vital for sustainability. Government economic policy must be designed to accommodate how important cash flow is for the SMEs. Your government should take significant steps to ensure that SMEs continue to deliver the innovation and flexibility in our match toward Nigeria’s economic independence and prosperity.”