As small and medium enterprises (SMEs) strive to survive under the harsh economic conditions in the country, First Bank plc has said it would continue to lend support to them in spite of harsh economic situation in the country.
Speaking at a forum in Lagos with the theme “The Economy and You: Small and Medium Enterprises”, Mr. Francis Olugbenga Shobo, deputy managing director of the bank, said that the financial institution was committed to helping small and medium enterprises grow and develop, adding that his bank is the most friendly bank to SMEs in the country.
According to him, SMEs are critical to the development of the Nigerian economy and, therefore, should be supported by all stakeholders in overall national interest.
He said that the business environment in Nigeria is challenging but added that there are hopes that with right leadership and reforms, the environment will soon improve. He urged SME operators to take advantage of the opportunities that exist in the economy and create wealth for themselves and others.
Shobo stated that notwithstanding Nigeria’s poor business environment, it is still easier to obtain credit in the country than it is in Norway, Sweden, Argentina, Belgium, Iran, Thailand, and The United Arab Emirates, this, according to him, speaks volumes of the strength of the banking industry’s support to businesses in Nigeria.
The First Bank boss told the business people at the event that there are yet-to-be tapped inherent opportunities in different sectors of the economy.
He said that in its pursuit of food security, government’s focus is on food that Nigeria has comparative advantage to produce e.g. rice, wheat, cassava, maize etc.
According to him, between January 2012 and May 2015, Nigeria reportedly spent $2.41 billion on rice importation, adding that rice importation is now excluded from official foreign exchange access. This, he said, has created opportunities for entrepreneurs to invest in rice production.
He stated that in corn and sorghum production, Nigeria is largely self-sufficient, adding that the major challenge for a majority of agricultural products in Nigeria is processing and storage, saying that this requires further investment.
According to the deputy managing director of First Bank, the CBN’s recent ban on access to foreign exchange for the importation of 41 items has refined trade protectionism policies and has opened up huge investment opportunities across the ‘banned’ items.
He, however, said that high costs of factors of production, ostensibly exacerbated by the naira devaluation at the parallel market (that has passed through to consumers), may further fuel consumer resistance to increase in the prices of goods.
Shobo told the entrepreneurs that there is a large labour force (77 million people) across 15-64 years age group that can consume whatever they want to produce.
According to him, since Nigeria’s population is largely youthful, there are huge investment opportunities in manufacturing of goods that are predominantly consumed, and service offerings that are preferably accessed by the youths.
He added that the recent reforms gains in electric power generation, the upward review in electricity tariffs, and the apparent determination of government to facilitate improvement in the generation, transmission, and distribution of electric power should enhance the sector’s capacity utilization.
According to him, the gap between naira exchange rate at the interbank and parallel foreign exchange markets is huge and widening, calling on the federal government to make sure that individuals who accesses foreign exchange from the official source did not sell it at the parallel market.