Access to finance has been the major challenge faced by micro, small and medium entrepreneurs in Nigeria, especially artisans, who are seen as high-risk businesses by commercial banks.
The Aba finished leather industry – made up of micro and small manufacturers of shoes, bags and belts had battled with this challenge for some time without help.
Consequently, the decision of the Bank of Industry (BoI), Nigeria’s industrial development bank, to fund the sector, represented by the Leather Products Manufacturers Association of Abia State (LEPMAAS), has brought succour to the sector, which stakeholders argue has great potential to turn around the economic fortunes of Abia State and the entire country.
Before DFIDs Gems1 and currently Market Development in the Delta (MADE) intervention programmes, the artisans had approached several commercial banks for loan, but none of the banks had a product that suited their needs.
Abimbola Adeyinka, an intervention manager with the MADE, describes the redevelopment as a significant achievement and milestone that will support small-scale businesses within the Aba Finished Leather Sector (FLS).
He states also that the agreement between BoI and the Aba FLS will improve the potentials of export gains for the Federal Government, because Aba is inarguably, the largest finished leather sector in West Africa.
He explains that the intention of MADE was to stimulate growth in the Aba finished leather cluster, stressing that finance has been a major constraint that has impacted negatively on the degree of production quality and sales of shoe, belt and bag makers in Aba.
BoI, according to Adeynka, has developed a product that is specific to the needs of Aba finished leather sector, having taken into cognizance their productive and sales circles.
In his words, “So, I think that from my own point of view, it is a very significant achievement and milestone, it will definitely support the business of small holding within the Aba Finished Leather Sector and improve the potentials of export gains for the Federal Government.
“It is estimated that about 30,000 pairs of shoes leave Aba, daily to neighbouring countries of Togo, Cameroun, among others, so, we see this as a veritable means of improving export potential from Nigeria.”
Private sector investment enhances economic growth, promotes competition, entrepreneurship and innovation. It also reduces unemployment, particularly amongst youth, through the encouragement of entrepreneurship.
In a market-based economy, private firms create job opportunities, drive up workers wages, due to competition and reduce income poverty.
In growing Abia economy, the State Government is encouraging private sector participation to produce essential goods and services in large-scale production, help to keep the price of essential goods and services down and thereby increasing the real effective incomes of poor people.
Trade and Commerce comes naturally to the people of the South-East, and particularly Abians, and that is why it is featuring prominently in Governor Okezie Ikpeazu’s economic blueprint, the “Five Pillars” of economic development.
In drafting the ‘five pillars,’ Governor Ikpeazu (PhD) in conjunction with his economic team, considered those economic activities that the people of the State do better than others in Nigeria, those things that the State has both comparative and competitive advantages over other states and trade and commerce is one of those activities.
Aba, the commercial hub of Abia State, has one of the largest concentrations of micro, small and medium enterprises (MSMEs) in Nigeria and a bulk of this number are engaged in leather works, steel fabrication and garment making.
It is the Governor’s belief that a robust MSME can lead to massive wealth creation, when properly incubated and supported, hence the need for private sector participation.
To attract fresh investments, the State Government established an investment house, known as One-Stop-Shop to remove bottlenecks and improve ease of doing business.
And that move, by the State Government to catch the attention of investors is yielding fruit.
Recall that the acting President, Yemi Osinbajo, in one of his recent visits to Abia State, commissioned the Abia Investment House, designed to host the Inland Revenue Service (IRS) and its partners to create a friendly environment for investors and other patrons, who would come into the state to do business.
It is the dream of the State Government to rank among the top 10 States in the ease of doing business in the country.
It is heart warming that efforts of the government to improve ease of doing business in the State; including revenue harmonisation have started yielding fruit, and these results are coming within two years of the life of the present administration in the State.
Governor Ikpeazu had assured investors interested in investing in the State of a safe and economically vibrant business environment.
Abia has comparative investment advantage, because it is located in the middle of seven states with a population of more than 20 million people, 17 railway stations, proximity to four airports and home to the largest micro, small and medium enterprises (MSME) hub in West Africa.
The Abia State Governor invited investors to key into opportunities in the automation of leather and garment products manufacturing processes, airport development, mechanised agriculture, new markets development, modern urban mass transport systems, intra-state railways, industrial clusters and export processing zones.
He assured potential investors that the one-stop-shop would guarantee that they could commence business with land and certificate of occupancy (C of O) availability in less than a month after arriving the State.
It would be recalled that during the 2015 campaigns, Governor Ikpeazu promised to promote Made-in-Aba products to the world.
“The axiom, “Get Aba right, and Abia is right,” shall continue to be the pivotal development philosophy and the nexus upon which to hinge development policy for Abia.
“We shall enhance international marketing opportunities for Made-in-Aba goods and services by ensuring quality control and showcase the Made-in-Aba brand in the economic capitals of the world,” he said.
