FG mulls formalisation of 37m MSMEs for optimal performance

In a determined move to expand economic opportunities for real sector operators, the   Federal Government has concluded plans to formalise 37 Million micro small and medium enterprises (MSMEs) in the country.

This will enable MSMEs become more bankable and attract more intervention funds and support from the government and other relevant sectors.

The Federal Government also said that some of the measures taken to formalise the MSME sub-sector include business registration, accessing SMEDAN’s entrepreneurship training, as well as having a bankable business and an  insurance cover.

Dikko Umaru, director-general, Small and Medium Enterprise Development of Nigeria(SMEDAN),while confirming this development exclusively to BusinessDay, said the Federal Government,  as part of the measures to formalise the MSMEs, is coming up with the Conditional Grant Scheme for those who meet up with these criteria.

“We would work closely with the cooperatives in ensuring that the real sector operatives access these grants and employ two or more people into their businesses. This is part of the palliatives the government is putting in place to ensure we gradually pull Nigeria out of recession, since the MSMEs constitute over 90 percent of businesses in the country,” Umaru said.

“We held a retreat when I took charge here to identify the key problems confronting the MSMEs in the country. What came out of our retreat was the need to formalise MSMEs, the largely informal sector, because micro-businesses constitute about 97.8 percent of the total population of MSMEs in the country,” the director- general said.

“Another important component of the grant is that when you access the grant, you must add additional two people. Our target is to reach out to all the 774 local governments, and in reaching them, we want to equitably distribute opportunities to these entrepreneurs and in doing this, provide a short term palliative to the economy in recession,” Dikko explained.
Available statistics shows that over  ninety percent of businesses in the country are in the MSME sub-sector. In the United States of America,75 percent of the businesses are MSMEs, while it is 90 percent in China.
The sector is largely informal and still grapple with the challenge of poor standardisation and global competitiveness. Industry watchers maintain that the sector, if well supported, has the capacity of pulling Nigeria out of recession ,given the abundant human capital and natural resources in the country.

“If the MSME sector is well guided and  provided the needed business support services, in addition to financial access to grow into large enterprisea, the Nigerian economy largely made up of MSMEs could have competitive edge globally,” Franklin Akinsoloye,a business development expert, told BusinessDay.

The sector is also grappling with poor access to funds, poor capacity among operators and low technology.

According to Muda Yusuf, DG of the Lagos Chamber of Commerce and Industry (LCCI), MSMEs need funding support to unleash their potential.

Yusuf said there is a need to protect businesses which provide power, water and almost all infrastructure for themselves.

HARRISON EDEH