Setting out one day on the streets of Lagos, a cosmopolitan city of some fifteen million, I consciously counted about a dozen shopping complexes within a 20 minutes drive. People here are very enterprising and always on the move. The commercially active nature of the city is always in your face anywhere you turn.
The city like the rest of the country however suffers from a major electricity crisis. This along with the cheap imports from Asia has made a great portion of the industrial sector moribund. All major policy drawn solutions point to no easy fixes, medium to long term solutions cannot be the only strategic option available.
More and more shopping complexes are springing up across the city with large numbers of investors who went through the capital market crash, diversifying into real estates. The crunch now is that some of these new complexes are finding it hard filling their lockups with tenants. I am of the opinion that a large and ready market is being unconsciously ignored by these property investors. These are the small scale manufacturing/fabrication outfits.
Now let me give you a snip into the present outlook of these small scale producers today; they are mostly owned by trained apprentices, with limited administrative training or expansion strategy. They hardly get access to bank credit and their alternatives charge outrageous interest rates. They exhibit limited marketing skills to push their products and ideas, mostly depending on making goods to individual orders, incurring high idle time. They possess low access to latest technology and know how. They spend a great percentage of their earnings running and maintaining electric generators.
Now here’s where the opportunity lies; building a medium size complex and providing individual workspaces of about 100 square meters accommodating a dozen or more small scales will be a very viable venture and most importantly empowers that community.
With its own basic infrastructure; mains and standby electricity and water supply (borehole), telephone and internet connection, a business centre, transport and logistic service outfit on-ground and an onsite warehouse.
The great draw for the small scale producers will be the lower running cost, availability of auxiliary services and access to bank credits and training. On the last point, Banks here are skeptical loaning money to startups due to their flight risk and the cost/logistics of monitoring these relatively small loans. The complex accommodation idea will reduce this risk by provide a secured environment where the assets of the bank invested in equipping these outfit are monitored. Management, bookkeeping and marketing training workshops can be organized for clients to build their capacity and thus reduce default rates.
There are thousands of youths with the technical training and drive to engage in such startups; with the new conducive environment the complex accommodation offers, the productive sector of the economy will witness a massive regeneration.
The trickle down effect will see a technical and management training sector growth driven by a high skills empowerment demand, an increased growth prospects for the financial and insurance sectors and also vital will be a components supply base that could be built around heavy manufacturing or for export.
Source by Olukunle Ogundiran