By Nkechi Isaac, Abuja
It is evident everywhere that technologies are rapidly emerging and affecting our lives in ways that show that we are at the beginning of a fourth industrial revolution (4IR), a brand new era that builds and extends the impact of digitization in new and unanticipated ways.
As the world prepares for the imminent industrial revolution characterised by introduction of various technologies such as virtual/augmented realities; nanotechnologies; 3D printing; machine learning; big data; cloud computing; drones; self-driving cars; robotics; artificial intelligence and many more of such, there is need to build the capacity and equip the next generation with the requisite skills to tap and optimally take advantage of the era.
This was the crux of the 5th edition of the Refined Economic Development (RED) quarterly lecture held at the University of Abuja and organised by the Economic and Business Strategies (EBS) with the theme, ‘Real sector constraints to economic growth and development’.
Speaking to journalists, the organizer and founder of EBS, Prof. Magnus Kpakol who contended that the past generation failed Nigeria stressed the importance of equipping the upcoming generation with requisite technology to make them productive and more competitive.
“One of the big reasons why we lag behind in the world is because of the serious human capital deficiency that we have. If you don’t have the skills and the determination, the attitude to be competitive, to raise your skill level you are going to have trouble with being competitive.
“I just asked them the founder of Google, Facebook, Microsoft, Sergey Brin, Mark Zuckerberg, Bill Gates. They were in the university when they founded these institutions. I think that our generation has disappointed Nigeria, we’ve not been as effective, successful as we should have been and this is the generation that we have to target now, and I think that we have to get them to be very competitive, to see themselves as not the future of Nigeria but the present situation of the country.
“When you look at it all, one thing that becomes clear right away is that if we are going to be competitive these guys have to know how to perform. They have to realise that their competitors are in South Korea, Taiwan, China, the United States of America, the United Kingdom, otherwise they too would be left behind and it will be worse because of artificial intelligence, the other technologies coming up. If you get left behind in the acquisition of skills to handle these kinds of things then your productivity is going to be way behind,” he stated
The EBS chief executive officer said there was need for strong collaboration with the key players in the economy to increase the nation’s productivity rate.
“I think that what we’ve been missing in Nigeria is that we need strong collaboration between the academia/universities/educational institutions, business people and policy makers. We don’t really sit and talk together.
“These students need to be exposed to serious situations where they can work with banks, industries and they get to understand what it takes to be successful, they also bring new ideas, they are not just working there as mere apprentices, they come with ideas like other founders of groundbreaking technologies. That’s the reason we’re here with university students,” he added.
In his paper presentation entitled ‘Contemporary strategies for financial inclusion and prosperity in Nigeria’, the assistant chief economist of the Development Bank of Nigeria (DBN), Joseph Nnanna referred to the micro small and medium enterprises (MSME) as the backbone of any economy, saying the segment makes up over 90 per cent of all firms and accounts for an average of 60 to 70 per cent of total employment and roughly 50 per cent of Gross Domestic Product (GDP) of Nigeria.
He explained that a 2018 survey by the International Finance Corporation (IFC) showed that only 31 per cent of MSME in Nigeria had ever obtained a loan from a financial institution, commercial or micro finance bank.
He gave the principal reason for the low figure in spite of its undisputable impact on the economy as high/lack of collateral, problems with credit history, unfavorable worthiness of the prospective borrowers among others, stressing that an emerging facet in the nation’s operating environment was the untapped fintech segment which he said could change the fortunes of the challenges surrounding access to finance.
Nnanna added, “As a result, over a period of one year, we witnessed an increase in treasury bill rates peaking at 18 per cent in 2017. At the same time banks facing a challenging external environment worked to reduce risks, crowding out liquidity to real sector including MSMEs.
“At present, treasury bill rates have declined to 12.7 per cent. However, yields on government bonds are around 14.5 per cent making it still very attractive to lend to the government. Typically, Nigerian banks observe a value chain business model that deals with already established firms with a track record of success.
“Consequently, banks tend to ignore MSMEs because of poor or no credit history, insufficient collateral to name a few reasons. To that effect, Nigerian banks resort back to what they understand to be a sale investment choice which is competing for larger firms and accepting lower margins only to exploit the higher yields earned from credit and perhaps other fees earned through product offerings as part of the loan agreements.”
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