In Part One (1) of the SME business model, we compared the historical SMEs and the modern SMEs. We also try to create a possible point of convergence which is to integrate modern technology to develop the indigenous manufacturing SMEs.
This week we are going to consider this SME model as regards to Oyo State. We have seen the several past governments in the state with little or no contribution to the SMEs, meanwhile, the bed-rock of the state economic activities is the SME. Due to the population of the state, traders and local manufacturers have been able to sustain and keep prices of FMCG goods at the lowest.
The report of the Manufacturers Association of Nigeria (MAN) has shown that Oyo state has strong growth potential of 80.1 points in the first quarter of 2019. Because it is potential it has not become a reality; it can only become a reality when the government greatly consider the developmental impact of the Small and Medium Manufacturing Enterprises in the state and invest adequately in them.
The Global Journal of Science Frontier Research Agriculture and Biology, Vol. 12 Issue 4 Version 1.0 April 2012 on Effects of Poverty on Rural Household Welfare in Oyo State shows that the major effect of poverty is the low standard of living (98.3%). With a mean age of respondents being 43 (i.e people still in their very active age), 80.8% married with an average family size of 5 live on maximum annual income N200,000 from major occupation, which is farming. The implication of this phenomenon should be left for future discussion. Let the government-subsidized technology and standard of living would increase.
ALSO READ: SME Business Model – Subsidize Technology Part 1 By Mukaila Ayuba
Subsidizing technology, in the case of Oyo State is not in all sectors, but majorly in the agricultural sector; which covers mainly farming (raw-materials) and processing. We have witnessed some past governments giving soft loans to traders (which is commendable, though this is like postponing the evil days), but it just shows that little attention is being paid to root causes of the problem, because whatever factor affected those traders and made them lose their initial capital/working capital would still make them lose it over and over again. Any government should stop giving soft loans to traders. This is a discussion for another time.
Underutilised Potentials for Growth- Index in Oyo State
The state has great potentials for growth, this simply shows that there are features which the state possesses that if adequately utilized would not only span growth or increase the standard of living of the populace but would increase the state revenue.
Population: With a population of over Six Million (6,000,000) and still growing, the government cannot fail if the technology is greatly subsidized. The work of government is to improve the standard of living of the populace because this would in-return refresh the government and bring more revenue to the government in terms of tax. Any state government that continually survives majorly on federal allocations had failed to adequately invest in her people.
The government should speedily consider subsidizing Technology for majorly Fast Moving Consumer Goods (FMCG) to develop the Agricultural Chain sector.
When technology in the agricultural sector is adequately subsidized, the production capacity of the sector increases significantly; standard of living increases as farmers and processors would turn-out more goods and get more revenue; more people are employed in the sector; crime rate reduces; prices of foods drops; food affordability increases; more traders would come into the field of play as they have more to sell. The population of over six million is an internal market which is big enough to sustain the Oyo state production on regular basis, while the whole of South West (most especially Lagos state) is a bigger market. Please see our SME business model for details of implementation.
Geographical location: According to Wikipedia “Oyo State covers approximately an area of 28,454 square kilometers and is ranked 14th by size. The landscape consists of old hard rocks and dome-shaped hills, which rise gently from about 500 meters in the southern part and reaching a height of about 1,219
metres above sea level in the northern part. Some principal rivers such as Ogun, Oba, Oyan, Otin, Ofiki, Sasa, Oni, Erinle and Osun river originate in this highland”. So that land that flows with ‘milk’ and ‘honey’ is Oyo State; anything can grow anywhere?
It is a popular fact that a lot of lands are being allocated for farming in Oyo state, but the truth is that how many of the allocated pieces of lands are being utilized? With the large expanse of land and the landscape, the government would not only need to allocate lands but to get involved by ensuring that the lands are being utilized for the purpose. There would be a need for technology Segmentation to ensure that the right kind of seeds is being planted; necessary farm equipment is employed and progress monitored and processing yards (factories) operates to turn-out processed foods.
To be continued……..
