Business legislation will give govt “dramatic authority”

Analysts have expressed concern about the National SME Amendment Bill and the potentially harmful consequences it could have on South African businesses.

The bill was released for public comment on December 11 and aims to change the way governments deal with the impact of the law on SMEs.

READ ALSO: Stock Market Reverses Gain as Index drops by 0.59%

It also regulates the relationship between SMEs and other companies and introduces a new dispute resolution process that includes the concept of “unfairness” in contractual transactions.

This is done through the introduction of a new SME ombudsman service that acts as a support function for the minister.

In analyzing the bill, the Free Market Foundation raised concerns about this ombudsman service and the power it could have.

The bill states that the minister, based on the ombudsman’s recommendations, may ban certain practices related to SMEs as unfair, including the transfer of commercial risk to weaker parties. ..

The FMF said abstract values ​​such as “fairness” cannot constitute the substantive rules that courts use to intervene in contracts.

“If the contract is unfair, the idea that the contract does not have to be enforced creates legal and commercial uncertainty and undermines the rule of law.

“If the parties agree to the terms of the contract, the law should not be used to provide relief for unfair terms,” ​​he said.

Gary Moore, senior researcher at the Free Market Foundation, said the change was particularly problematic, as virtually any contract could be challenged in the future.

“All contracts, no matter how carefully negotiated, are subsequently unfair in some of their terms and cause immense damage to business conduct, personal trust and respect for the law. It will be opened in response to the objection.

“Imposing these notions of fairness will have the unintended consequence of discouraging large companies from dealing with small businesses, as opposed to government policy,” he said.

Moore already applies common law rules, such as interpreting ambiguous contracts as lightly as possible, coercion, excessive influence, and rules on public policy when bargaining power is found to be unequal. He added that it would be done.

Sweeping power

The Small Business Institute (SBI) raises similar concerns, with planned changes providing radical authority to both the minister and the proposed Ombud, violating the civil and contract laws already established in South Africa. , Said it could be disabled.

“Ombud’s arbitrary definition of what constitutes” unfair trading practices “and intervenes in” contractual arrangements or other legal relationships “between” SMEs “and” other parties. ” Empowering can lead to indiscriminate intervention and its potential. SBI CEO John Doldre said, “Ombedprener is unstoppable under the amendment for disgust and frivolous claims.”

He said the amended bill is unlikely to over-contribute to the “already stunning amount of bureaucratic formalism” faced by micro, small and medium-sized enterprises (SMMEs) and promote prompt payment of invoices. Added.

This is another example of a policy on hoofs, Dludlu said, without the minister’s authority to exercise and the regulatory impact assessment actually required of her fellow ministers.

Other potential issues identified in the bill include the fact that there are already a large number of ombuds already available to small business owners, and the lack of specificity regarding what constitutes “deferred payment.” Said.

Business legislation planned in South Africa will give the government “dramatic authority” over contracts: analysts


Business Owners

Business owners recount tales one year after COVID

Chisom Marvelous Elekwa is a young graduate of Public Health from one of the private universities in Nigeria. After two years without a job and not ready to watch her 50-year old mother struggle with her siblings school fees, Chisom in November 2019 went into the rice business, buying from producers and selling to consumers. She invested her life savings into the business which became instant success as she had huge patronage. But that joy was short-lived as the coronavirus disease which index case in Nigeria was detected in February 2020, took away her means of livelihood.

READ ALSO: How a gas company raised $650m facility…

Fortunately, she applied and got N1millon loan from the Federal Government to cushion the effects of the pandemic. Today, Chisom is back to her rice business owing to the lifeline.

But while Chisom is grateful and happy, Jummai Abdullahi, another small scale entrepreneur is sad and distraught. She told BusinessDay that the N5 million MSME loan she took from the Central Bank of Nigeria (CBN) last year which she invested in cassava and poultry farming has become a source of sorrow. Her 10 hectare farmland located in the outskirts of Kuje in Abuja, was last year destroyed by cattle herders whom she alleged invaded her farm at a time the crops were about to be harvested. “My brother I am in tears. All the money I took from the CBN and the ones I borrowed from my bank went down the drain due to no fault of mine. I went to my farm on November 10, 2020 to discover that the cattle ate up all the crops. How and where do I start from paying back the loans?’’ she said with tears.

The above two cases illustrate the joy and sadness associated with small scale entrepreneurs who were pushed to the world by the ravaging effects of COVID-19 which was first recorded in Nigeria on February 27, 2020.

In one year, the COVID-19 pandemic has had a far-reaching impact on the country’s already fragile oil and import-dependent economy. The pandemic affected the livelihood of 85.2 million people living in poverty, who mostly sustain themselves on daily labour, and 41.5 million small and medium enterprises (SMEs), which account for 76 percent of the labour force and contribute half of the gross domestic product (GDP) but are mostly informal.

The World Bank Group predicts that the long-term fallout of the pandemic led to food shortages, massive unemployment, and large-scale business failure while the recession that followed may increase the number of people living in poverty to 95.7 million by 2022, and reduce Nigeria’s economic and development outcomes. The government has taken decisive actions to mitigate the humanitarian and economic impact of the pandemic and the oil price shock but the outcome is still uncertain.

Government efforts have been enhanced by a US$3.4 billion loan from the International Monetary Fund (IMF) and have been augmented by massive support from the private sector and development organisations.

In the wake of the pandemic, the Federal Government provided access to funds for households and businesses affected by the pandemic, including cash payments for the most vulnerable as well as an Economic Sustainability Plan (ESP) – a one-year programme estimated at ₦2.3 trillion, focusing on achieving mass employment and mass domestic production and on expanding pro-poor spending to protect the vulnerable.

There was also a fiscal stimulus for micro, small and medium enterprises (MSMES) which include N50 billion loan SMEs, extension of revenue remittance deadlines for key non-oil tax payments (VAT, corporate taxes) and 50 percent rebate on corporate taxes for employers who do not make staff cuts between March 1 and December 31, 2020. Others were: three-month repayment moratorium for all TraderMoni, MarketMoni, and FarmerMoni loans and to all Federal Government funded loans issued by the Bank of Industry, Bank of Agriculture, and the Nigeria Export-Import Bank Central Bank measures.

COVID 19: Impact on businesses

The COVID-19 pandemic presented new challenges to businesses, disproportionately affecting smaller and less-efficient firms across all industries. Businesses had to move quickly to remote operations while ensuring business continuity under the lockdown. They had to change their operating models to safeguard workers and customers, manage disruptions in supply chains and cash flow, and respond to changing demand. Increased working capital requirements coupled with liquidity constraints, reduced access to forex for imports, logistics disruptions at ports and in interstate transport, and rising insecurity in the north have strained business operations. Right now, experts say many businesses are being forced to downsize operations, retrench workers, and reduce compensation to avoid failure.


Harvard Business Review

Harvard Business Review: Igbo Apprenticeship System passes

Professor Ndubuisi Ekekwe, founder and president of the African Institute of Technology, has revealed that the Igbo Apprenticeship System has passed the first phase of editorial work at Harvard Business Review.

– The Igbo Apprenticeship System has been adopted for decades by the people of southeast Nigeria

– Popularly called the ‘Umunne Economics,’ the system has taken many Igbo families out of poverty

– A Nigerian professor of Igbo ethnic stock, Ndubuisi Ekekwe, is taking it a step further by pushing for the system’s publication on a global platform

READ ALSO: ‘SMEs Could Generate $433bn Through 5G By 2025’

Professor Ekekwe made the announcement via his Twitter page on Tuesday, February 24, adding that there are more phases to go.

He wrote:

“The Igbo Apprenticeship System work has passed the first phase of editorial work at Harvard Business Review. We have more phases to go, but everything is looking fine. Due to the nature of the topic, it is taking time.”

Defining the system, Professor Ekekwe wrote:

“The Igbo Apprenticeship System is a business philosophy of shared prosperity where participants co-competitively participate to attain organic economic equilibrium where accumulated market leverageable factors are constantly weighted and calibrated out.”

He noted further that the system, via dilution and surrendering of market share, enables social resilience and the formation of livable clusters, engineered by major participants funding their competitors.

He said this comes with success measured on quantifiable support to stakeholders, and not by absolute market dominance.

He added:

“My postulation is that everything the world is looking for, to reduce inequality, the Igbo Apprenticeship System has frameworks that could be adapted, for the rise of all.”

Igbo people are known for their diligence and broad participation in business life in Nigeria. Igbo businessmen and women have been playing significant roles in Nigerian industrial and business spheres for a long time.

This explains why so many of them are quite wealthy.

Meanwhile, days after some leaders of the southeast stormed the National Assembly to demand the creation of another state for the region in the spirit of fairness, a former senator, Shehu Sani, has given reasons why the demand is a tall order.

Sani, who represented Kaduna Central at the Senate during the 8th National Assembly, asked the leaders to jettison their agitation for the creation of more states, adding that it is a cumbersome procedure in the constitution and they should shelve the idea.

Source: Legit

The new frontier of wholesaling

How to Start a Wholesaling Business in 2021

Wholesaling plays a fundamental role in the overall distribution and sales of a particular product. It is also a very competitive market, but you can be successful at wholesaling with the right resources and connections. 

Wholesaling gives you an advantage because unlike the retail business where the money is made one product at a time; the wholesale business allows you to earn more. Since your customers are retailers, they will need to buy your product in volumes to sell to their customers.

You might want to ask yourself; Do you want to stock your products or have them drop-shipped to your customers? What products do you want to sell, and where can you find suppliers?

In this article, we will run through tips on how to start a wholesaling business in 2021. Let’s dive in!

SEE ALSO: MSMEs To Receive Support Through SMEDAN

1. Choose a Market for Your Business

This is the most crucial part of starting a wholesaling business. You will need to decide which industry or market needs your product. You will need to ask yourself. What products should I sell? Who needs my products?

As an SME in Africa, it is important to choose products that are moving in your current economy. You will need to find dealers, store owners, retailers, and customers who need your product.

You would also need to know who your competition is, their prices and what kinds of products they sell. This will help you understand which market to target and what kind of products to sell. There are several profitable wholesaling ideas. You could wholesale in Jewelry, textile, or even organic food. The key here is research.

2. Choose a Location for Your Business

This is the next most important step. If you decide to stock your product, you will need to get a warehouse to run your business.

Choosing a central location for access and easy movement of goods is also something you would need to consider.

How to Start a Wholesaling Business in 2021
Choose a good location for your wholesaling business

Secondly, you will need to hire efficient staff to ensure that your product is not misplaced or damaged. You could opt for a family member you can trust.

3. Choose Your Manufacturers/suppliers

You will need to identify manufacturers who are willing to give you their product to sell. You might want to note that some companies might require you to meet certain sales targets. You can also decide to talk to distributors that can get you a dealership. Wholesaling is about networking and establishing relationships.

4. Establish an Online Presence

In 2021, going online has become an important business strategy. Your wholesaling business is no different. The online space has become saturated with buyers making several buying decisions every day.

Establishing yourself online will help build trust and establish you as an authentic brand. Not only does it build trust, but it also attracts retailers and suppliers. It is a great way to tell prospective clients that you are ready to do business.

5. Get an easy to use inventory software

With the number of goods going in and out of your warehouse, having inventory software will pay a lot and give your business a smoother run. Inventory software helps you keep track of your inventory and determine your business’s demand and supply relation.

6. Check for Return Policies

 When looking for manufacturers/suppliers, it is important to check for their return policies. You would need to check their return policies and how they handle goods being returned to them. If their return policy isn’t clear, it is best to stay clear of those manufacturers. Inventory not sold is a waste of money.

In return, you would need to create friendly return policies that allow retailers to return goods they can’t sell. To create a comprehensive return policy, you should check with your manufacturers and align your return policies accordingly.

We hope that these steps give you a good platform to start your wholesaling business. To grow and establish yourself in the wholesale business, you would need to identify product trends and have a good understanding of your market. Don’t be afraid to take that wild step in starting your wholesaling business. 

Do you have any questions or comments on SMEs in Africa? Kindly drop them in the comment section below!



Fegho Umunubo, Arinze Chilo-Offiah, Dolapo Adejuyigbe To Speak at BusinessDay, NetPlusDotCom Webinar

Fegho Umunubo, CEO of XTREME Mindz Solutions Ltd; Arinze Chilo-Offiah, Special Adviser to the Governor of Enugu State on SME Development and Investment Promotion and Dolapo Adejuyigbe, Co-Founder of Traction, will be speaking at the February edition of the Monthly SME Digital Transformation Webinar Series themed “Revamping your business processes in the digital era” by BusinessDay and NetPlusDotCom. The virtual event will hold on Thursday February 25, 2021 from 10:00am – 11:30am.

See also: Raising stake in SMEs financing, growth in Nigeria

This monthly series is organized by BusinessDay Media, West Africa’s leading provider of business intelligence and information and NetPlusDotCom, a leading technology and digital payment company.
The aim is to create an avenue for SME’s in search for expert information on navigating the effects of the Coronavirus pandemic to learn the modalities of the new age of doing business. It also offers a connecting platform for participants to meet with organizations that can facilitate access to market, finance and digital skills.

To register for this event, please visit

SOURCE:Business Day


Types of Business plan

. The traditional business plan uses some of the nine sections that make most sense to the business.
They include:
Executive summary
Company description
Market analysis
Organisation and management
Service or product description
Marketing and sales
Funding request
Financial projections

2. The lean business plan projects fundamental facts about the company. The most well known is the Business model canvas, developed by Alex Osterwalder. Its features are:
Key partnerships
Key activities
Key resources
Value proposition
Customer relationships
Customer segments
Cos structure
Revenue streams

Browse about the types of business plans to choose the most suitable for your business.

Note: after conducting your research and you still don’t know how to write your business plan, consult the services of a professional.


Finance tips – Why you need an accounting software

A financial app helps you to manage and account for every expense undertaken, especially for a small business that cannot afford an accountant or a bookkeeper.

As your business grows gradually and cash flow increases, you may now have the requisite knowledge to handle your account.

Apps such as Mint, Quick Receipt, Spending Tracker, etc., help users to budget and track their expenses. #Enugusme#Gburugburuissme#money#business#entrepreneuership