Small business, big impact
‘Small business, big impact’ is the title of this year’s World MSME Day. It was a brainchild of the United Nations, which, on 6th April 2017, adopted a resolution recognising the crucial roles the micro, small and medium enterprises (MSMEs) play in economic growth and particularly in the achievement of the 2030 Sustainable Development Goals. Due to this resolution, June 27 of every year was designed as a day for celebrating MSMEs, responsible for creating 50-70 percent of global jobs.
In Nigeria today MSMEs contribute 47 percent to the gross domestic product (GDP) and create more than half of the jobs.
Out of the 37 million MSMEs in the country, 36.9 million are micro enterprises, according to SMEDAN.
In terms of classification, micro enterprises are businesses with one to nine workers and whose capital base ranges between N1 million and less than N10 million. Small businesses have 10 to 49 staff members and capital of N10 million to less than N100 million, while medium enterprises have 50 to 199 workers and a war chest of N100 million to N1 billion, according to Small and Medium Enterprises Development Agency of Nigeria (SMEDAN).
Nigeria’s MSMEs are today redefining the way businesses are done. It is easy to book flights for any country from Nigeria via wakanow.com, just as Hotels.ng now enables visitors and tourists to book rooms from a selection of over 8000 hotels.
Africans abroad can now watch Nollywood movies through platforms provided by iRokoTV and IbakaTV, just as it is easy to get the latest fashion designs via Fasha.com. Nigeria’s payment system has become so digitalised and easy, thanks to Paga, and Paystack, among others.
Apart from tech start-ups, there are multiples of MSMEs in farming, food processing, shoe production, education and learning, among others, creating jobs and attracting investors with deep pockets.
“It is important that young people begin to think of what they can do for the country rather than what the country can do for them,” said Yinka Fisher, Lagos State coordinator of SMEDAN, at the 2017 World MSME Day held at the Lagos Chamber of Commerce and Industry (LCCI) corporate office in Lagos.
Fisher said access to market, poor infrastructure, low technology inclusion were cardinal issues militating against small businesses in Nigeria, stating that SMEDAN had established industrial development centres in 23 states of the country to aid MSME growth.
Nike Akande, president of LCCI, acknowledged the efforts of Nigeria’s Federal Government in resolving major issues hurting MSMEs in the country, including the introduction of the Central Bank of Nigeria (CBN)’s Microfinance Policy in 2005 to cater for the financial needs of small businesses and the recent policy of the apex bank to enable MSMEs import eligible finished and semi-finished products not exceeding $20,000.
Akande, however, called on development institutions to refocus attention to non-oil sectors where small businesses participated more to guarantee a more sustainable growth beyond the volatility of oil prices in the global market.
She identified challenges facing small businesses in the country as poor access to credit, lack of proper bankable business plans, poor competitive marketing strategy and standard accounting system, as well as dearth of requisite vocational and technical skills, recommending stable policy and regulatory environment that would support reforms.
She added that taxation, trade and foreign exchange issues should be managed in line with international best practices.
Jon Tudy Kachikwu, chairman of SME Group of the LCCI, said MSMEs created 50 to 70 percent of global jobs, moving ideas from concept to production within the shortest possible time.
Kachikwu, who is the CEO of Jon Tudy Interbiz, identified unfriendly interest rate as a major challenge preventing small businesses from accessing credit needed for growth, commending the Lagos State government for key programmes such as skills development and self-employment strategies for MSMEs, including its N25 Billion Employment Trust Fund being accessed by small businesses in the state.
Ronald Kayanja, director, United Nations Information Centre in Nigeria, who was represented by Oluseyi Soremekun, said MSMEs employed a larger share of the vulnerable sectors of the workforce such as women, youth and the poor, urging banks to create a tailor-made intervention for MSMEs to access funds.
ODINAKA ANUDU