How to Encourage the growth of SMEs – Obi

www.odogwublog.com reports that the former Governor of Anambra State, Mr. Peter Obi had proffered solution to Commonwealth countries on how to encourage the growth of Small and Medium Enterprises (SMEs) among them. Obi spoke at the just concluded Commonwealth Business Forum in London.

The text of his speech reads: “First, it has been universally acknowledged that SMEs are the back-bone of any nation with good economic growth. The available statistical evidence is indicative of the correlation between SMEs, developed nations and hopeful developing nations, especially in their productive capacity and in the area of job creation.

Our understanding of the challenges which SMEs face within the Commonwealth requires our grasping fully the challenges SMEs face within individual Commonwealth countries. Although the total GDP of 54 Commonwealth nations is 10 trillion dollars, 4 of these countries (the United Kingdom with about $2.6 trillion, India with about 2.4 trillion, Canada with about 1.5 trillion, and Australia with about 1.2 trillion) account for over 75%, while the rest of the 50 countries account for the balance of 25% and only about ten (the U.K, Australia, Brunei, Canada, Cyprus, India, Malta, Pakistan, Singapore, and New Zealand) could be said to be outside the orbit of the so-called Third World economies.

So the policies and support of Commonwealth countries to SMEs must be designed to accommodate the vagaries and different challenges within the various nations. The SMEs in different Commonwealth countries are consistently faced with day-to-day management and development conflicts within their territories. In Africa, for instance, these challenges compound the realities of those Commonwealth countries where everyday governance and developmental challenges are underpinned by stability deficits, organizational deficits, as well as scientific and technological deficits.

It is not about reinventing the wheel, Commonwealth nations should understudy the impressive economic record achieved by China. China, which has the fastest sustainable economic expansion than any other major economic power in modern history, has grown its economy within a quarter of a century from a GDP of less than a trillion dollars to a GDP of about 12 trillion. China, with half of the 2.4 billion population of Commonwealth countries, achieved these impressive records with industrialization and export as its back-bone.  SMEs contribute 70% of China's export earnings and 60% of its 800 million jobs. 

It then follows that with the right policies and support to SMEs across the various Commonwealth countries, the total GDP of these countries could see a growth of up to 18 trillion dollars by 2030, the deadline for achieving the Sustainable Development Goals (SDGs). Such achievement would help the Commonwealth countries to create about 200 million jobs, which would be a third of the World Bank target of 600 million jobs within the said period, considering that the population of the Commonwealth countries is presently a third of the world population.”