The Federal Government has commenced moves to position the Small and Medium Enterprise (SMEs) sub-sector in Nigeria as growth drivers for the economy.
The Minister of Trade and Investment, Mr. Olusegun Aganga, who made this known said with this move, SMEs in Nigeria would soon become vibrant enough to drive the required level of growth in the economy.
He spoke while briefing journalists on the sidelines of the World Economic Forum meetings, in Addis Ababa, Ethiopia.
Aganga said that in the last one year of President Goodluck Jonathan’s administration, the results of new SME policies and schemes, in terms of job creation, had shown that given the necessary support, SMEs would provide the foundation for sustainable growth and poverty alleviation in Nigeria.
He therefore said that the current priority for the Ministry of Trade and Investment was the SME sector, noting that the ministry had put plans in place to remove the major barriers to SME growth (access to affordable finance, low level of business support and high cost of operation) to boost the development of the sub-sector.
The minister said a committee, comprising of experts in the different fields relating to the major bottlenecks in the sector was already being set up to ensure that the country achieved a turnaround before the end of this administration, adding that vehicles had already been created to achieve this goal.
“Micro, Small and Medium Enterprises remain the backbone of the development of any economy and the driving force of national growth. In Nigeria, there are currently over 17 million Micro, Small and Medium Enterprises in the country, employing over 31 million Nigerians. They account for over 80 per cent of the total number of enterprises in Nigeria and employ 75 per cent of the total workforce,” Aganga said.
“But their contribution to the nation’s GDP is still relatively low, due to major constraints in the operating environment, which have limited their abilities to create jobs and perform the vital role of enhancing economic growth and development,” he added, noting that in the next three years, Nigerians should expect more SMEs with enhanced productivity.
He said, already, a national database had been developed in partnership with the National Bureau of Statistics, which was the first step in the effective tackling of the problems of the sector.
According to him, there will also be a national SME Policy that will address the major problems in the sector.
He said the Bank of Industry was already executing matching programmes with state governments on SMEs and deepening financing penetration, using microfinance banks.
The minister said his ministry had also begun regular interaction with SME desks of banks to develop unconventional but workable means of providing affordable finance for SME growth.
He said, “For instance, we have started getting round collateral issues related with funding through cross-guarantees by members of cooperatives and setting up special intervention funds for critical sectors such as textiles.
“We are implementing the One Local Government One Product initiative to open up the rural areas for industrial development, employment generation and wealth creation; and we are partnering the Lagos Business School to develop Business Support Services.”
Other efforts, he said, included developing small hydropower plants in strategic areas where they could serve SMEs; creating financial inclusion by setting aside special funding schemes for women and mechanics; and establishing integrated industrial parks to enhance the productivity and profitability of SMEs; among others.
In a meeting with the Director-General, World Trade Organisation, Mr. Pascal Lamy; Aganga also reiterated the government’s commitment to deepening regional trade, saying it would open many doors for Nigeria in terms of job creation.