MSMEs as the frontier for Nigeria’s economic prosperity

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DG SMEDAN, Dr. Dikko Radda

To say that Nigeria has no concrete data on MSMEs and the true contributions of the MSMEs to GDP growth trajectory is an aberration.

The Nigeria Bureau of Statistics (NBS) has projected that Nigeria has about 37 million MSMEs but experts say that figure is far from accurate as the NBS only did a hypothetical projection rather than a census of MSMEs in the country. It is the same flawed figures that SMEDAN also uses for its MSMEs planning and development, which hasn’t yielded any significant result.

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) was established by the SMEDAN Act of 2003 to promote the development of the MSME sector of the Nigerian economy, a mandate it has largely been unable to achieve due to inadequate funding and lack of requisite capacity.

Dr. Dikko Radda DG/CEO SMEDAN is also worried about the integrity of data on MSMEs. He had given a perspective on the data SMEDAN and everyone else is working with. SMEDAN, he said, started a survey in 2007 with the collaboration of the National Bureau of Statistics (NBS) because of paucity of funds for a census.

The MSMEs policy requires that SMEDAN should generate data on the number of MSMEs every three years. “We conducted in 2010 and in 2013 which is the latest we have. For the 2013, we had 37.76 million MSMEs in Nigeria. Lagos has the highest of 3.9 million and Niger has the lowest of 367,000,” he told newsmen recently.

He also said: “The survey revealed that micro enterprises have about 99 per cent of the total because they have 36,994,000. The small enterprises have about 68,000 and the medium has 4,670.”

From what the SMEDAN CEO said, another survey was due in 2016 but didn’t happen and there are no indications that it would happen anytime soon.

However, recent statistics, according to the MSME Clinic initiative being championed by the office of the Vice President, Prof. Yemi Osinbajo, says Nigeria has about 39 million MSMEs.

Export capability of MSMEs

There is decline in exports because the medium enterprises that have the capability of producing goods for export are not supported.

Data from the CBN showed that Nigeria’s non-oil export earnings have come down by more than $5.9 billion – from $10.35 billion recorded in 2014 to $4.39 billion in 2015.

Besides, credit to non-oil exports sector, which currently is in the decline, only constituted a paltry 0.6 per cent of total domestic credit to the private sector in the past five years.

This figures show the steady decline of medium scale enterprises, which should fuel majority of the non oil exports in Nigeria, as is obtained in other economies around the world.

Worried by the trend, the Managing Director/CEO of Fortis Microfinance Bank, Mr. Tiko Okoye, recently said on the Development Bank of Nigeria (DBN), established recently to support export oriented Micro, Small and Medium Scale Enterprises (MSMEs), that there are many SMEs that are export oriented across the country which if supported, will grow capacity and price for export and thus help the country earn more foreign exchange.

Growing MSMEs base

Experts have suggested that MSMEs should get Tax and levies break as an incentive to spur growth among the MSMEs. The break should be used as a bait for enticing MSMEs to register so that government can have a more credible and workable data. With credible data, government and other stockholders can target the SMEs directly rather than the current trial and error approach. The impact would be more direct and devoid of wasted efforts.

Also, government must be willing to provide better critical infrastructure for businesses to thrive.

Mr. Ayo Terriba, the CEO of Lagos-based Economic Associates had said more importantly on agriculture, that government should improve on storage facilities, road infrastructure, training for farmers and establish cooperatives for rural farmers that are largely  neglected.

The Footprint to Africa concept paper/blueprint for an online survey of Micro, Small and Medium Enterprise in Nigeria indicated that it is worthwhile capturing and representing a more reliable, dependable and innovative data index for economic sectors in order to monitor their prospects, challenges and contributions to economic development indices such as employment, GDP, export etc.

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