Nigeria: Experts hinge economic growth on SMEs survival

  • 01 December 2020 / News / 193 / Emerging Africa

Nigeria: Experts hinge economic growth on SMEs survival

As Nigeria struggles to get out of recession while battling with inflation, experts have stressed the need for the government to support the growth of small and medium scale enterprises (SMEs) as an elixir for growth.

Indeed, they said it is imperative for the government to support SMEs, as failure to do so would lead to massive job losses and increase in poverty and insecurity.

Speaking at the French Week 2020 Entrepreneurs’ Hangout, French Ambassador to Nigeria, Jérôme Pasquier, said SMEs represent about 90 per cent of businesses and more than 50 per cent of employment worldwide and formal SMEs contribute up to 40 per cent of national income (GDP) in emerging economies

Quoting the World Bank, Pasquier said 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments.

According to him, in emerging markets, most formal jobs are generated by SMEs, which create seven out of 10 jobs. By research, about 86 per cent of businesses in Nigeria are in the start-up category, and create more employment opportunities.

Pasquier, represented by the Economic Counselor, Embassy of France, Gwénolé Jan, said a proof of Nigeria’s start-uppers’ talent dynamism is the acquisition of an indigenous start-up ‘Paystack’ for about $200 million, which indicates that the local start-up ecosystem is vibrant.

“Unfortunately, all over the world, SMEs and Start-ups, because of their size or because they are young, are more severely affected by the economic consequences of the COVID-19 pandemic. Most of the countries including Nigeria therefore developed initiatives to help them to overcome this unprecedented crisis,” he said.

Chairman, Oxford International Group, Dr Teni Adesanya, described entrepreneurship in Nigeria as the next big thing, saying entrepreneurs need to understand how to start a business while also being courageous to sustain it

Adesanya said integrity is a factor to sustain a business, while encouraging SMEs to be problem-solvers, noting that there are over 65,000 businesses entrepreneurs can do to solve Nigeria’s problem.

Manager, Financial Advisory, Mazars Nigeria, Halima Abbey, who listed the challenges of entrepreneurs to include poor infrastructure, bad record keeping and access to finance, stressed the importance of strategic alliance with similar businesses to achieve a common goal.

Partner, AELEX, Ngozi Efobi, said SMEs needed to be aware of regulations governing the types of businesses they are into, while stressing that entrepreneurs must endeavour to register their businesses with the Corporate Affairs Commission (CAC) to establish legal presence.

Efobi said the Finance Act 2020 is targeted at assisting SMEs with a focus by the government to create incentives for businesses that supported the economy during the pandemic.

In his remarks, the Baale of Ishaga Akiniyi Kingdom in Ogun State, Francis Akiniyi, stressed the need for the government and organised private sector (OPS) to take corporate commerce to the grassroots to spur economic growth, while bringing inclusion to rural communities which are always eager to benefit from grants and access to market.

The hangout, which had over 100 young start-ups in tech, agric, renewable energy and culture to showcase their innovative solutions while gaining insight into key business growth and survival strategies, were selected from the 1000 Challenge for the Africa France Summit, and also from members of the Chamber SME category