Stakeholders of Small and Medium Enterprises (SMEs) have proposed business mergers to maximally enjoy the benefits of the Africa Continental Free Trade Area (AfCFTA) scheduled to take off in July.
They made their views known in separate interviews with the News Agency of Nigeria (NAN) on Thursday in Lagos.
NAN reports that AfCFTA, which was signed by President Muhammadu Buhari in July 2019, aims to unite 1.3 billion Africans with a 3.4 trillion dollars economic capacity.
Speaking, Dr Femi Egbesola, National President, Association of Small Business Owners of Nigeria (ASBON), strongly supported the merger proposition, saying that the more businesses become a coalition, the stronger.
Egbesola explained that SMEs were unable to do much in the previous opportunities because many business owners were trying to do things on their own.
He said that the AfCFTA terrain was one which they were not used to and as such, needed to pull energies and resources together to benefit maximally.
“In many other countries like India and Ghana, people doing similar businesses come together to form a cluster or a sort of network.
“This has helped them to address the challenges as a group which yields better results than when it is just one entity.
“I also advise business membership organisation to also come together to form bigger coalitions with the same mind and set goals to achieve greater results,” Egbesola said.
Also, Mr Solomon Aderoju, President Nigerian Association of Small and Medium Enterprises (NASME), said some SMEs which was lacking or was underperforming in a value chain of production could align with others.
Aderoju said this was to ensure global competitiveness in the trade agreement.
He explained that some small businesses that either lacked in finance, research, or marketability could identify their strengths and come together to harness greater benefit in the AfCFTA.
“If two or three of these businesses, along the same tradeline, can come together, then things would be better for us all.
“If you are strong in trade, another is strong in the capital, another in research, then, they can pull resources together and be a greater force in the trade circle.
“But, the problem is everybody wants to be on their own and as such may not be strong enough to compete favourably when the AfCFTA begins,” he said.
The NASME president, however, called for a proper legal framework to help address issues of rights, profit sharing and any other challenges to ensure smooth flow of operation amongst business entities.
He also urged the government to continue to engage factors and policies to address the cost of doing business and improve the nation’s ease of doing business rankings.
In his remarks, Dr Muda Yusuf, the Director-General, Lagos Chamber of Commerce and Industry (LCCI), urged SMEs to factor in business and personal compatibility in taking merger decisions.
Yusuf said that this was necessary because the merger phenomenon was not popular and akin to the Nigerian business climes.
“Size matters in competitiveness and competition, but compatibility matters too,” he said.