Nigeria has declared a long list of activities to mark the national Micro-, Small and Medium-sized Enterprises Day, (MSME) in tandem with World MSME Day as declared by the United Nations (UN).
The UN General Assembly declared 27 June as Micro-, Small and Medium-sized Enterprises Day, to raise public awareness of their contribution to sustainable development and the global economy.
The UN is equally hosting a series of events to explore how MSMEs – the backbone of our economies – can be equipped to ensure an equitable and sustainable post-COVID-19 recovery with the theme “MSME 2021: key to an inclusive and sustainable recovery.”
In Nigeria, aside from the priority it has given to Micro, Small and Medium Enterprises (MSMEs) in various ways, including the holding of MSME Clinics across the country over the years, the Nigerian government has dedicated this week to further build the profile of MSMEs and promote greater understanding of the sector.
The Vice President, Prof. Yemi Osinbajo, represented by the Minister of Industry, Trade and Investments, Otunba Niyi Adebayo, at the opening ceremony of the maiden edition of the National MSME Discourse stated that over the years, the Buhari Administration has supported MSMEs in various ways including through the MSME Clinics Initiative which is conducted through a partnership of relevant Ministry, Department, and Agencies (MDAs).
According to the Vice President, “The MSME Week is the latest initiative in this regard. Over the past few years, we have held a national MSME day in tandem with World MSME Day as declared by the United Nations. However, to further build the profile of MSMEs and promote understanding of the sector, we decided to dedicate the whole of this week to promoting awareness about the achievements of our MSMEs and highlighting their needs.”
Recalling the Federal Government’s interventions in the sector, the Vice President said, the Clinics so far have been held in 27 States and the initiative has extended to encouraging States to establish one-stop shops and ‘Shared Facilities’.
“The Buhari administration has also introduced many other schemes and initiatives aimed at supporting the operations of MSMEs.
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“We have introduced arrangements in our development and financial institutions to de-risk lending to MSMEs. Similarly, we have exempted small businesses with a turnover of less than N20m from tax, while those with a turnover of fewer than N100m now benefit from a one-third reduction in the corporate income tax rate from 30percent to 20 percent.
“Also equally notable is the support that the Federal Government extended to small businesses in the particular context of COVID-19 through the Economic Sustainability Plan. Through the Payroll Support Programme, we were able to help businesses across various sectors to keep their employees.
“In the same vein, artisans and transporters got support from the Survival Fund to help overcome the negative impact of the pandemic on their livelihoods. In a similar vein are the MSME specific interventions in other ESP programmes like the Agriculture for Food and Jobs programme, the Family Homes Fund programme and the Solar Power Naija programme.”
“Taking the Family Homes Fund, for instance, construction contracts with guaranteed off-take will be given to consortiums of young professionals in the building sector such as architects, engineers, quantity surveyors, builders, etc,” the VP added.
Osinbajo then visited DLK Signature Limited which produces footwear, bags, and clothing, and also operates like a privately run shared facility.
He also visited Roving Heights, an up-and-coming independent bookshop that combines a physical presence with an online presence.
“I was impressed by the vision, work ethos, and organizational acumen of these outfits but my purpose was to encourage them and all other businesses in the MSME space and signal that the Federal Government is committed to supporting their efforts every step of the way.
“Other activities lined up for the MSME Week include an MSME Clinic, this MSME National Discourse, a Fashion and Art Exhibition, and National MSME Awards night.”
Tola Adekunle-Johnson, special adviser to the president on MSMEs announced at a press briefing a few days ago that the government is not relenting in its support for small businesses in Nigeria; hence it is moving on with its support for the small businesses by sustaining a reward programme initiated three years ago.
According to him, the federal government through its National Micro, Small, and Medium Enterprise (MSME) clinics initiative is set to reward the most excellent, hard-working, and innovative MSMEs across the country, in tandem to mark the 2021 United Nations (UN) World MSME Day.
However, the Covid-19 pandemic had caused unprecedented panic, and disruptions both for the public, private sectors, and the global economy with governments and businesses still grappling with the effects.
Nigeria is Africa’s most populous nation with a population of about 198 million people of which, over 90 million are youths.
The unemployment rate in Nigeria has soared to 23.1percent of the populace, the equivalent of 20.9 million people, and the youth unemployment/underemployment rate is currently at 55.4percent. These statistics indicate that there is a massive percentage of the labour force unable to find gainful employment.
Accordingly, this gap can only be ameliorated by MSMEs, which are growing as the largest employers of labour in Africa. In sub-Saharan Africa, 38% of its GDP is attributed to MSMEs by way of their contribution to exports, production, and employment. Micro Enterprises employ up to 10 employees, Small Enterprises employ fewer than 50 employees, while Medium Enterprises employ fewer than 250 employees.
In Sub-Saharan Africa, there are approximately 44 million formal MSMEs which play a crucial role in providing innovative solutions and meeting the needs of Africa’s growing population.
For MSMEs to thrive there is the need to take advantage of government efforts and initiatives aimed at creating a more conducive and simplified business climate.
The National Assembly recognized the importance of encouraging the growth and success of MSMEs when it recently passed the Companies and Allied Matters (Repeal & Re-Enactment) bill 2018.
The law allows MSMEs to thrive by introducing One -Person Companies (OPC) & Single Directorships, which would permit an individual to set up a limited liability company. It also eliminates the Company Secretary requirement for certain companies to help MSMEs reduce costs of operation and management.
Additionally, in line with the governmental drive to simplify the ease of doing business in Nigeria, the Corporate Affairs Commission, a government agency that regulates all things-corporate and business-related, recently rolled out an initiative aimed at encouraging MSMEs to register their business names at a 50percent discount for a limited period.
The purpose of this incentive strategy is to encourage MSMEs to formalize their businesses, which in turn would allow them to have access to external financing and loans.
Currently, over 40 million MSMEs exist in Nigeria, employing over 80 percent of the country’s population and contributing about 50 percent of its Gross Domestic Product.
In 2017, large-scale microcredit interventions such as the Government Enterprise and Empowerment Program in which the Bank of Industry (BOI) participates have been targeting four economic segments—market traders, artisans, youth, and farmers for increased financial inclusion.
BOI, while leveraging on the power of data, biometrics, and mobile wallet systems, and with an extensive network of over 17,000 agents since 2017 has been able to identify, target, and deliver micro-credit to over 2.4 million MSMEs across Nigeria.
Amazingly, over 52 percent of the beneficiaries are female, while the bank has brought on board an additional 500,000 beneficiaries into the formal financial system—essentially using technology to break the barrier of access to finance and financial services for underserved demographics.
The bank’s immediate aim at the onset of the pandemic was to ensure business continuity by deepening the MSME activities through the provision of innovative lending solutions to new customers.
Through the microcredit platform, BOI’s agent network spread across the country, operating as proxies enabling beneficiaries to efficiently interact with technology and have their businesses captured and digitized in records.
These agents, equipped with smartphones loaded with the bank’s data-driven applications, engage informal entrepreneurs by capturing their Know-Your-Customer details, profiling their business, tracking transaction histories, and monitoring income and spending patterns. Thus providing financial solutions tailor-made to boost financial literacy, improve creditworthiness, and support their micro-businesses with funds, especially during these difficult times.
Again, despite the Central Bank of Nigeria’s interventions, the double-digit interest rates charged by the local Deposit Money Banks (MDBs) and Development Banks (DBs) have remained unresolved issues, while the local manufacturers have continued to cry over lack of long term single interest window.
The Manufacturers Association of Nigeria (MAN), through Director General, Segun Ajayi- Kadir, noted that the ideas behind the policy remain brilliant but the implementation has been very poor.
There is still the need to improve the network coverage in the un-served and underserved areas in the journey of large-scale digitization for the MSMEs across the length and breadth of Nigeria.
The Executive Vice Chairman Nigerian Communications Commission (NCC) speaking recently on the Quality of Service (QoS) in the country disclosed that in the under-served areas, the Quality of Service is expected to be poor, noting that the Commission is also mindful of the situations in the areas that are under-served and lacks economic viability.
Speaking on the broadband access gap, the EVC NCC declared that some 38 million Nigerians were affected by access gap clusters, adding that the broadband access-gap clusters in Nigeria have been reduced further from 207 to 114 cities representing about 55.7 percent.
Indeed, there is much work to be done in the quest to achieve the UN Sustainable Development Goals as well as establish flourishing MSMEs in Nigeria.
MSMEs must be willing to learn appropriate strategies which include digital marketing, brand promotion, delivery, payments systems, among others, required for businesses to prosper and be prepared to implement such processes and practices that will make their businesses truly thrive.