By Dikko Umaru Radda

I am delighted and honored to be in your midst today not just as an invited guest but with the rare opportunity of being a speaker at this august gathering of policy makers, practitioners, and many other relevant stakeholders in the Automotive industry. The realization of the industrialization agenda of Mr President demands the building and use of public-private partnership platforms.

Let me start by expressly stating that the sustainable and inclusive economic growth in Nigeria must involve the participation of both public and private stakeholders in all facets of our national lives. My acceptance to speak in this occasion is therefore a firm confirmation of my belief that initiatives such as this needed to be explored towards laying the much needed foundation for the development of the automotive sub-sector of country.

I was asked to speak on “SMEDAN Role in Developing Small and Medium Scale Enterprises in Automotive Industry”. I will however, without prejudice to the topic discuss SMEDAN mandate, implemented initiatives, and thoughts which I strongly believe slants towards the set goals of the seminar/workshop.

You will recall that the Small & Medium Enterprises Development Agency of Nigeria, SMEDAN was established in 2003 by an act of the parliament to essentially midwife a structured and efficient MSME subsector that will encourage and enhance sustainable economic development of Nigeria. Therefore, at birth, it inherited such omnibus mandate as listed below(but not limited to these): –

  • Stimulating, Monitoring, and Coordinating the development of the MSMEs sector;
  • Initiating and articulating policy ideas for small and medium enterprises growth and development;
  • Promoting and Providing access to industrial infrastructure such as layouts, industrial parks, etc.;
  • Linking MSMEs to internal and external sources of finance, appropriate technology, technical skills as well as to large enterprises;
  • Promoting and facilitating development programmes, instruments and support services to accelerate the development and modernization of MSMEs operations;
  • Mobilizing internal and external resources, including technical assistance, for the development of MSMEs;

Understanding its mandate that cuts across all socio-economic sectors suggests that for SMEDAN to actualize its official directives and or instructions, it will need to facilitate and promote the access of MSMEs to all those resources required for their growth and development. It became evident that compressive studies of a number of sectors were absolutely essential to fully appreciate what the MSMEs will require across sectors.

Understanding Steps

  • In the year 2005/2006, SMEDAN commissioned number of cluster studies which included Nnewi Automotive Cluster with Lagos and Kaduna Those studies exposed the challenges facing these organic clusters and what may positively change the curve of development if and when undertake to provide appropriate cluster based infrastructure/facilities, implement development oriented policy options, etc,
  • The 2013 NBS/SMEDAN national MSME survey indicated that:-

Total MSMEs in Nigeria is estimated to be 37,067,416 MSMEs. Contribution to Employment-84.02%, GDP-48.47%, Export-7.27%.

Of the total number micro enterprises account for the majority (99.80%) of the MSMEs in Nigeria with 36, 994, 578 enterprises, 68,168 Small Enterprises and 4,670 Medium Enterprises.

These figures have a wide range of interpretative meaning but relevant to this gathering is that many of the auto-components parts fabricators/manufacturers/vendors who feed assembly plants and auto-mechanic workshops belong to these categories of MSMEs. Therefore to improve on these figures for a healthy economic prospects demands that result oriented collective interventionist approach must be adopted and conscientiously implemented for the auto-MSMEs.

  • The definitions below lifted from the National MSME policy articulated by SMEDAN in collaboration with other stakeholder reviewed in 2017 will help further understanding of the urgency of this seminar/workshop in the auto-industry.
CATEGORY EMPLOYEES ASSETS (N’M) (excluding land and buildings)
MICRO Less than 10 Less than 10
SMALL 10-49 10-less than 100
MEDIUM 50-199 100-less than 1 Billion

 

Projects/Programmes Implemented

These studies, surveys, publications, partnerships tours and interfaces have enabled SMEDNAN to initiate and implement projects/programmes with particular bearing on the business prospects of auto-MSMEs across the country.

  • National BMO Interface with National Association of Auto-Technicians(continuous)
  • Skills Enhancement for 25 No. Auto-Mechanics at Kaduna (2009)
  • Hosting of National Auto-testing Centre at IDC Zaria in collaboration with NADDC
  • Establishment of Common Facilities Centre for Auto-components parts fabricators at TIC, Nnewi( 2017/2018/2019-on going)
  • Establishment of Common Facilities Centre for Auto-components parts fabricators at Kaduna (2017/2018/2019 budget implementation- on-going)

Proposed Project

  • Revitalization of Automotive Workshops at 6 No.IDC for conversion to model Industrial Parks (Proposed in 2019 estimates)

Few Insights

Problems of technical and Environmental Nature in the Auto-Industry in Nigeria

Without overstressing the limiting factors in the Auto Industry, it is needful to highlight from SMEDAN perceptive, some of the problems that will limit development in the subsector:-

  • Low technical and vocational capacities availability
  • Unfriendly environment to bud auto-MSMES
  • Over dependence on imported technology
  • Insufficient data on manpower needs
  • Attitude to manpower development by industries
  • Poor state and coordination of training institutions/organisations
  • Energy shortages
  • Infrastructure challenges

For purposes of emphasises, the World Bank Policy Paper on Technical and Vocational Education in 1991 says that to get the maximum benefit to national industrial development, certain factors must be considered:

  • Well-timed modern courses linked to local and global demands;
  • Relevant and up-to-date Technical Vocational skills upgrade needed to be developed
  • Proper justification in respect of individual country that at which level of schooling is best in offering Technical and Vocational courses
  • Wider range of Technical and Vocational courses need to be developed in terms of demand and cost-effectiveness

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Suggestions

National Automotive Design and Development Commission, NDDC and other very relevant stakeholders will need to sincerely design effective working partnership that will deliver on the outcomes of this seminar/workshop either bilaterally and or multilaterally.

CONCLUSION

The progress of any society lies in the productivity of its citizens (MSMEs). Higher productivity gives a nation advantage of economies of scale and lowers the costs of production and prices of goods and services.

Nigeria should begin now to take very seriously interventions in MSMEs subsector including investment in technical and vocational education and skill training as no nation can compete effectively in the emerging global market place with poorly educated and unskilled workers. The leading factors of production in the emerging global economy are said to be technology, knowledge, creativity and innovation.

A presentation at the Seminar/Workshop on “The impact of the Automotive Industry on the Economic Growth of Nigeria: Lessons from China, India, and South-East Asia”, on Mach 28, 2019, organised by the National Automotive Design and Development Council (NADDC) in Abuja.

 

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