The contribution of Micro, Small and Medium Enterprises (MSMEs) to the country’s Gross Domestic Product (GDP) in nominal terms has been put at 46.54 per cent.
A report from the National Bureau of Statistics (NBS) revealed that though MSMEs play a very big role in the Nigerian economy, their contribution have been constrained by poor access to finance, weak infrastructure, and inconsistency in government policies, lack of work place, multiple taxation and obsolete technology.
The Survey Report on MSMEs in Nigeria also showed the significance and the potential for growth in the sector if properly developed, particular as the nation aspires to be among the top 20 economies in the world by the year 2020.
According to the NBS, the survey done in collaboration with the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), aimed at providing adequate and reliable baseline data for the development of the MSME sector, and is based on activities that occurred in 2010.
Findings of the survey, which covered the 36 states of the federation and the Federal Capital Territory, indicated that the total number of enterprises stood at 17,284,671 comprising 17,261,753 micro, 21,264 small, and 1,654 medium enterprises. Lagos State has the highest number of small and medium enterprises with 4,535 while Osun State has the least with only 100.
Lagos state also recorded the highest number of micro enterprises at 880,805, followed by Kano state with 872,552, while FCT recorded the least 272,579.
According to the survey, the total number of persons employed by the MSME sector as at December, 2010 stood at 32.414 million, even the female entrepreneurs accounted for 42.1 per cent in the ownership structure of microenterprises as against 13.57 per cent in small and medium enterprises.
The report showed that SMEDAN has to step up its publicity and awareness drive as the survey revealed that most of the entrepreneurs interviewed were not aware of the agency and its services, thus resulting in the beneficiaries of SMEDAN Services being very minimal in virtually all the states.
The survey indicated that ownership structure by age fell predominantly within the age bracket of 24-50 years indicating the dominance of youth entrepreneurs, a development that could be attributed to low initial start-up capital which was less than N50,000 for micro enterprises, while that of small and medium enterprises were predominantly less than N10 million.
Three priority areas of assistance to MSMEs were identified as access to finance, provision of infrastructure and regular supply of power and water, to enable them improve on their capacity utilisation as most of the MSMEs operated well below optimum capacity.
The skills gap by sector showed that qualified artisans are readily available in most of the sectors surveyed.
The enterprises would also need to improve their documentation process as the survey showed that most of the enterprises operate without a business plan and do not belong to any business membership association.
The survey recommended that a strategic action plan to address the six key constraints confronting the sector should be put in place urgently. These constraints are access to finance, weak infrastructure, and inconsistency in government policies, lack of work place, multiple taxation and obsolete technology.