How MSMEs contribute 54 per cent of Nigeria’s GDP
According to the International Council for Small Business (ICSB), Micro, Small and Medium-sized Enterprises (MSMEs) make up over 90 per cent of all firms and account for an average of 60 to 70 per cent of total employment and 50 per cent of Gross Domestic Product (GDP) of any economy. Experts have argued that the MSME sector is the most neglected in Nigeria, with little or no support from government or financial institutions. The United Nations, haven seen the critical role of the sector, set aside June 27 every year to celebrate those who contribute in the sector. Recall that at the National Branding Conference last year, Co-Founder of AACE Foods, Ndidi Nwuneli, led a discussion on ‘Breaking New Grounds: SMEs as Economic Growth Engine,’ where she pointed out some challenges SMEs face, growth opportunities and key steps for maximising growth in the Nigerian environment.
The plenary explored the contribution of the SMEs to national growth and development through job creation, brand export and economic progression. In line with a resolution of the United Nations General Assembly on MSMEs Day, the United Nations Information Centre (UNIC), in collaboration with Raw Materials Research and Development Council (RMRDC), celebrated the day in style, with support from De-United Foods Limited, UAC Foods Ltd and Beloxxi Industries Ltd, which distributed their products freely to all participants. The event, which featured an exhibition, had discussants across key areas. They emphasized the importance of the sector, saying it is capable of reducing unemployment rate drastically.
Director General of RMRDC, Dr. (Mrs.) Zainab Hammanga, espoused the importance of the MSME sector in sustaining manufacturing in Nigeria and painted a bright future for the MSMEs in Nigeria because of their huge capacity to adopt simple and locally fabricated equipment and technology, utilising locally available raw materials in manufacturing. She said the efforts of RMRDC has yielded 13 strategic raw materials in commercial quantity for support through the setting up of feasible projects around them that would be made available to interested investors and entrepreneurs in MSMEs.
She further expressed concerted efforts of RMRDC to ensure the survival of the MSMEs through awareness creation and information dissemination to interested investors and information seekers in resource-based manufacturing. Hammanga asked the MSMEs to also take advantage of the annual Nigerian Raw Materials Exposition (NIRAM Expo), which is now co-located with Nigeria Manufacturing and Equipment Expo (NME Expo) to market their resource-based manufactured products to a wide audience of local and international industries seeking raw materials to enhance manufacturing activities. Director Research, Statistics and Development, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Rebecca Ajibade described MSMEs as the engine of growth and catalyst for socio-economic transformation.
The paper further stated that the UN confirmed that small and medium enterprises make up over half of the global businesses. President and Chairman of Council of Nigerian Association of Small and Medium Enterprises (NASME), Prince Agboade, said Nigeria has over 37 million MSMEs, which employ over 54 million skilled and unskilled labour and contributing about 54 per cent to GDP of the country, quoting a source from the NBS/SMEDAN 2013 survey. Represented by Mr. Adeyemi Folorunsho, Director General of Manufacturing Association of Nigeria (MAN), Mr. Segun Ajayi-Kadir, said MAN was SME sensitive hence high percentage of its members are SME owners. According to him, “SME is an important component of national development and it must not be overlooked,” and urged the sector to do more research into their products to be of international standard.
President of Lagos Chamber of Commerce and Industry, Mr. Babatunde Paul Ruwase, said the MSMEs are keys to achieving the agenda 2030 of the SDGs. He commended the Federal Government’s efforts in introducing several intervention funds tailored towards the empowerment of the sector. Represented by Mr. Abiodun Oludapo, he advised that the current reform efforts be sustained to ensure stronger and sustainable businesses in Nigeria. “There is need for good policy and regulatory environment that supports the reform on the ease of doing business,” he added.
Lagos State Commissioner for Commerce, Industry and Cooperatives, Mrs. Olayinka Oladunjoye, urged stakeholders in the Micro, Small and Medium Enterprises (MSMEs) to come up with practical and sustainable solutions that would transform Nigeria’s economy. Oladunjoye, who was represented by an Assistant Director of the Ministry, Mr. Alayande Olarenwaju, praised Lagos State for constantly supporting the sector, adding, “While there is overarching needs for skill development to enable our young entrepreneurs prepare for the future, yet the importance of an enabling business environment for business to thrive cannot be over emphasized. This is why the government of Akinwunmi Ambode has consciously been driving MSME development through initiation and implementation of policies that create and foster a positive business environment.”
National President, Association of Micro-Entrepreneurs of Nigeria, Mr. Savior Iche, called for the emergence of a micro enterprise bank to assist the Bank of Industry (BoI) in providing loans to small business owners. He said some entrepreneurs needed as low as #20,000 to start their businesses and the BoI is saddled with the responsibility of huge loans with stringent conditions, which discourage small entrepreneurs. He called on the BoI to speed up loan disbursements and abolish the 10 percent upfront payment.
Director, UNIC Mr. Ronald Kayanja, sued for increased participation of youths in MSMEs to eradicate poverty in order to achieve the Sustainable Development Goals (SDGs) of the United Nations by 2030. He noted that MSMEs have been identified to be responsible for significant employment, income generation and the fight against poverty, which are all the goals of the SDGs. According to him, “This day should help to energise, mobilise and involve many young people in their businesses. We believe this sector would help us to achieve our 17 Sustainable Development Goal (SDG) because, if the young people are not empowered, there cannot be peace.