Yemisi Izuora
Given the enormous challenges facing Small and Medium Enterprises, SME’s in Nigeria especially in the area f accessing finance, the Civil Society Legislative Advocacy Centre, CISLAC in partnership with the Nigeria Employers’ Consultative Association (NECA), has created a forum to engage operators in the sector to resolve some of the teething problems.
Speaking today at a stakeholders’ capacity building and consultation workshop on fiscal support opportunities/ processes for mutual economic growth of SMEs and private corporations, in Lagos, executive director of CISLAC, Auwal Musa Rafsanjani, noted with concern that obtaining finance remains the most pressing problem, Medium Small Micro Enterprises, MSMEs face in Nigeria.
Citing data from the National Bureau of Statistics (NBS), Musa said they less than 5 per cent of SMEs have been able to access adequate finance for working capital and for funding business growth/expansion.
This he observed is despite that SMEs still contribute a staggering 50 per cent to GDP.
But to address these issues, he recalled that the Federal Government has helped to fund businesses through a variety of government-backed organizations (most notably the Small & Medium Enterprises Development Agency of Nigeria (SMEDAN), Central Bank of Nigeria and Nigeria Incentive least 26 of Nigeria’s 36 state governments have set up an SME development agency or office.
How, he noted that despite these seemingly significant efforts, challenges persist that hinder the growth and development of the sector thus the need to support small businesses by providing insights, advice and support on access to finance and reducing financial liabilities, remains critical to increasing their chances to succeed in an often difficult environment.
“Today’s engagement by the Civil Society Legislative Advocacy Centre in partnership with the Nigeria Employers’ Consultative Association (NECA), and with support from Oxfam, is predicated on the above, towards strengthening fiscal opportunities through relevant consultations between SMEs and relevant government and professional agencies for mutual economic growth.
“We believe that this engagement will provide a platform for Increased stakeholder awareness on opportunities and framework provisions for fiscal sustenance and improved productivity.; and Strengthen citizen-government advocacy and local engagement opportunities towards improving the enabling environment for ease of doing business for SMEs” said Musa.
He explained that the capacity-building and consultative workshop on fiscal aims to support opportunities and processes for mutual economic growth of SMEs.
He said that CISLAC, believes that small and medium-sized enterprises (SMEs) are the backbone of many developed economies: they are important contributors to employment, output growth, and trade expansion and in Nigeria they remain critical constituents of the economy.
According to a 2022 report jointly released by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) and the National Bureau of Statistics (NBS), there are at least, 39.6 million micro, small and medium enterprises (MSMEs) operated in Nigeria as of December 2020, accounting for 96.7 percent of businesses, 87.9 percent of employment, and 49.7 percent of national GDP. Totaling about 17.4 million enterprises, SMEs account for about 50 per cent of industrial jobs and nearly 90 per cent of activities in the manufacturing sector, in terms of number of enterprises.
He noted and specifically warned that business death is the last stage of any business life cycle, adding, “However, despite having the highest entrepreneurship rate in the world with 22 per cent of Africa’s working-age population starting businesses according to the African Development Bank, 80 per cent of businesses in Africa fail within five years of starting up and at least 1.9 million SMEs have been lost since 2017 in Nigeria” quoting a 2020 PwC report.