Politics
THE Abuja Chamber of Commerce and Industry, ACCI, has urged the federal government to address inadequate funding of micro, small and medium enterprises, MSMEs, for economic development.
Prince Adetokunbo Kayode, president, ACCI, said the issue must be resolved expeditiously. Kayode, who spoke at the official opening ceremony of the 2019 Abuja International Trade Fair, on Monday, said the sector was yet to feel the impact of federal government’s interventions. “Over the years, the federal government through the Central Bank of Nigeria, CBN, made substantial funds available for the MSMEs.
“However, issues associated with the disbursement in terms of collateral, interest rates and short term nature has contributed forces to dwindle the marginal efforts to fund MSMEs. Funding through the commercial banks has proved unproductive. The commercial banks are not programmed or structured to do long term funding or capital investment. They are into short term, quick return deals.
“So why do we continue to pass development funds through commercial banks, where experience has taught us that the essence and the aim of government is frustrated and or thwarted. We will consequently urge government to consider and agree to a special funding vehicle for MSMEs through the Organised Private Sector, OPS,” he said.
The president appealed to the government to embark on finance leasing, which could provide for direct procurement of capital equipment by funding agency to the MSMEs. He called for the provision of only Operational Expenses as against the prevailing instance where direct cash given becomes exposed to diversion into several other concerns.
“Since capital expenditure is usually about 80 percent of total capital requirement, this leads to a de-risking of the facility up to about 80 percent, especially with the covering of cost for delivery, installation, maintenance and insurance.”
Kayode disclosed that OPS driven MSMEs funding Direct Foreign Investment, DFI, would soon be proposed to CBN by the National Association of Chambers of Commerce, Industry, Mines and Agriculture, NACCIMA, for greater consideration.
“The second main challenge is the problem of multiple taxation and grey taxation procedures, which include corporate tax, stamp duties, property tax, tenement rate, infrastructure charges, environmental charges, water rates, among others.
“Businesses pay appropriate taxes and municipal charges. But multiple taxations kill MSMEs; so also unearned and destructive charges on loans to MSMEs like stamp duties, registration fees, consent fees and Corporate Affairs Commission fees,” he said.
Kayode lamented that governments, at every level, continued to take up to 10 to 15 percent of part of loans granted to MSMEs in the name of consent fees, stamp duties, title registration fees, filling fees at the CAC.
According to him, banks also collect another 10 percent more through administrative charges and documentation costs. All these have to stop in the interest of the economic development of this country.
Speaking on the trade fair, Kayode said it remained most vibrant multi-sectoral event for international and domestic exhibitors to promote and showcase new products, innovations, strategic direction in their area of interest, access new markets and deepen or sign business deals.
-Sep 24, 2019 @ 11:40 GMT |
Tags: Abuja Chamber President tasks FG on MSMEs funding mechanism
