Study: SMEs Require Support to Improve Competitiveness for Local Production

A new study conducted by two development partners – Foundation for Partnership Initiatives in the Niger Delta (PIND) and Market Development Project in the Niger Delta (MADE) – has shown that for the ongoing successes being recorded in local agricultural production to continue, agricultural businesses would require targeted policies and support.

The organisations that conducted the research on the effects of the naira devaluation and the country’s trade policies on four key agricultural value chains, found that local agricultural products have become a lot more competitive than before.

The study, which was conducted within the Niger Delta region, considered cassava, palm oil, aquaculture and poultry products, and looked at the effects of both the naira devaluation and the trade restriction policies, especially on the importation of about 41 items.

Presenting the report of the research at an event in Lagos recently, the lead researcher, Dr. Ogho Okiti, explained that the research became necessary to inform stakeholders – including government, investors, development partners and even consumers – of the market realities and the positive and negative impacts of some policies on market performance.

According to Okiti, the issue of naira depreciation could be seen as a blessing in disguise, saying it had resulted in a fall in the value of people’s income and a decline in their preference for foreign products. But that, although the pricing of local goods has gone up, the proportion of the increase is not as high as that of the imported products. As a result, this has left some profit margin for the local producers.

He said that the research findings, which apart from being shared with private investors and organisations, will also be shared with government at all levels to identify areas that are deserving of urgent attention in order to maximise the current gains.

Also, PIND’s Executive Director, Dr. Dara Akala, said through the report, the private sector can easily identify fresh opportunities where they can put their funds while those already operating in specific sectors can also note potentials for shifting their operations.

He said: “For instance, if you are a cassava processor and you have been processing for the industrial markets, you can shift your focus to the food market where you will find there are more opportunities. If you are a palm oil processor and you currently process technical palm oil (TPO) which is used in the households, you can begin to shift your products to the industrial markets where products attract better pricing.

“And then for government, the implication is that yes, these opportunities are there and that there is competitiveness in all of these sectors. However, for the small producers to be able to take full advantage of the opportunities, they need to be supported. In the case of aquaculture, for example, one of the findings from the study is that the small-scale producers are being squeezed out because though the price of feed has more than doubled, the increase in the fish pricing per kilogram is not that significant. This means that we need to be able to support these small producers to be able to survive.”

Akala said with the Federal Government’s focus on generating employment, she must keep these young entrepreneurs afloat, so that job creation can continue to support the economic growth and national development.