Experts in the waste recycling space have urged operators within the ecosystem to embrace equipment leasing as an innovative means to access advanced and latest machinery to remain competitive in the business.
They said this at an awareness consultation with the title: “Enhancing Micro, Small and Medium-sized Enterprises (MSMEs) Access to Financing through Equipment Leasing”, held on Thursday, April 20, 2023, in Lagos.
The awareness consultations and networking event was put together by the Lagos State Ministry of Environment and Water Resources, and Lagos State Waste Management Agency (LAWMA), in collaboration with the Equipment Leasing Association of Nigeria (ELAN).
The collaboration was supported by the Pro-Poor Growth and Promotion of Equipment in Nigeria Programme (SEDIN), a programme by the German Agency for International Corporation (GIZ).
In her welcome address, Mrs Sina Uti-Waziri, Head of Component, Local Economic Development (GIZ-SEDIN), said that leasing had emerged as a viable option to support MSMEs to easily access financing.
Uti-Waziri said: “Equipment leasing is a financial product that allows businesses to rent equipment for a period of time as against purchasing it outrightly and not incurring the significant cost associated with procurement.
“It is especially important for MSMEs with limited financial resources. It is an opportunity for businesses to access the latest and most advanced equipment and machinery which allows them to stay competitive.
“Equipment leasing is particularly an interesting product in the plastic recycling sector because they are quite expensive to procure, and leasing comes as an innovative alternative.”
Mr Markus Wauschkuhn, Head of Programmes, GIZ-SEDIN, said that the limited awareness and knowledge of leasing to MSMEs had slowed the development of the industry as it should focus mainly on assets suitable for MSMEs.
Wauschkuhn said: “The event is to enhance the knowledge of equipment leasing among state MSME agencies and other key stakeholders within and outside the plastic recycling ecosystem in the state.
“To capitalise on the opportunities for equipment lessors and other private sector players, who are keen on supporting MSMEs and provide business case for seeking additional investment to the plastic recycling value chain,” he said.
He added that bringing stakeholders together was to discuss strategies and recommendations that leasing companies and other investors should follow, to implement policies to grow access to finance for MSMEs in the plastic recycling ecosystem.
Mr Ibrahim Odumboni, Managing Director, Lagos Waste Management Authority (LAWMA), in his opening remarks, said that Lagos State generates 13,000 metric tonnes of wastes daily and 15 per cent was plastic.
Odumboni, who was represented by Mr Akinbulo Ayobami, said that recovery of plastic wastes had been challenging, noting that only about 10 per cent of plastic waste was recovered daily.
He said collection of sorted wastes after they had been recovered was a challenge and for recovered wastes to be profitable, value should be added.
Mrs Elizabeth Ehigiamusoe, the Chairman of ELAN, said that the recycling industry in Nigeria had been estimated to worth $2 billion, while struggling to live up to this lofty estimation.
According to her, this is due to the menace of indiscriminate disposal of waste, poor orientation and capacity to effectively convert this liability to a viable economic opportunity.
Ehigiamusoe, who was represented by Mr Tunde Netufo, Vice Chairman, ELAN, said: “This is where equipment leasing comes in to provide the necessary productive assets to strengthen the capacity of operators in this industry.
“Leasing can be brought to bear in this regard, as it facilitates easy and convenient access to the much-needed assets for productive ventures.”
Mr Andrew Emonuwa, the Executive Secretary of ELAN, said that some of the challenges faced in the plastic recycling space include insufficient funding; rapid population growth; poor investment in infrastructure development; and inadequate technical capacity, among others.
By Itohan Abara-Laserian