On June 27, the world marked the Micro, Small and Medium Enterprises (MSME) Day.
The MSME day is set aside annually by the United Nations to highlight the strong contribution of that level of business activity worldwide to livelihoods, communities and economies. It is also a day set aside to highlight the need to support MSMEs in their efforts to attain success in their peculiar business environment.
In Nigeria, as in most developing economies of the world, the MSMEs have been identified as the engine of growth of the economy, contributing significantly towards employment and income generation as well as poverty eradication.
It is worth mentioning, in our opinion, that income generation and fight against poverty are part of the laudable goals of the Sustainable Development Goals (SDGs), which is the successor programme to the now rested Millennium Development Goals (MDGs).
In most countries, the MSMEs are reputed to play essential roles in economic development through several ways that are inclusive of, but not limited to, the uplifting of the general wellbeing of the people through their activities that permeate the socio-economic life of the environment they operate in.
Indeed, as a growth-supporting sector, MSMEs, aside from contributing significantly to improve living standards, also bring substantial local capital formation and are responsible for driving innovation and competition, not just in developing countries, but also in advanced economies.
Interestingly, there is a consensus of opinion regarding the fact that MSMEs also play a significant role in aiding the transition from an agro-based economy to an industrialised one.
Perhaps it was in appreciation of the critical roles SMEs play that government at all levels has undertaken initiatives to promote the growth and development of MSMEs.
In Nigeria, statistics provided by the agency saddled with the responsibility of boosting SME development, the Small and Medium Enterprises Development Agency (SMEDAN), in collaboration with the National Bureau of Statistics, indicated that the total number of micro, small and medium enterprises in the country stood at 37.07 million as at 2013.
The agency hinted that these SMEs accounted for over 90 percent of the total business enterprises in the country and were noted to provide about 84.02 percent of employment, 48.47 per cent to Gross Domestic Product (GDP) and 7.27 percent to export.
For emphasis, it needs reasserting the fact that MSMEs play a crucial role in stimulating economic development, generating employment, and contributing to lifting people out of poverty.
But in spite of all these, the SMEs are bogged down by some critical challenges including poor entrepreneurial capacity of operators and weak financial management. Access to local, regional and international markets is also a major constraint faced by SMEs. There is also the concern of inability to access affordable finance.
In Nigeria, most financial institutions tend to address the financial needs of large enterprises, leaving MSMEs to manage on their own. Other challenges confronting them include lack of standardisation of products and low use of ICT in operations.
Above all, one peculiar challenge which has continued to impede the development of small businesses in Nigeria is the poor state of infrastructure.
MSMEs need steady power supply, water and roads for effectiveness.
Regrettably, this problem has remained unsolved despite rhetoric by successive administrations.
It was in order to address some of these challenges and ultimately reposition the SMEs sector that SMEDAN was established in 2003.
The Nigerian government has consistently made efforts to advance entrepreneurship and MSME development. However, in spite of these efforts, the challenges confronting MSMEs and, in particular, impeding their contributions to poverty eradication persist.
Although government has mapped out laudable programmes including the N220 billion MSME Development Fund of the Central Bank of Nigeria (CBN), Youth Enterprise with Innovation in Nigeria (YouWin), National MSME Clinics Initiative and the Government Enterprise and Empowerment Programme (GEEP) – Market Moni, amongst others, a lot still need to be done to further strengthen the sector.
There is an urgent need for government to widen access so as to make it easy for willing budding entrepreneurs to benefit from these laudable policies.
Additionally too, government needs to strengthen its monitoring mechanisms so as to guard against situations where some beneficiaries of these interventions mistake them for largesse.
There is no contesting the fact that the surest way of addressing poverty, repositioning the country’s economy and addressing the recurring challenge of youth unemployment and under employment is to strengthen the SMEs sector and provide it with most of the tools it needs to play its roles effectively and efficiently.
NEWS11 hours ago
Buhari’s Campaign Train Arrives Maiduguri
NEWS19 hours ago
Abiola’s Family Blasts Obasanjo Over June 12
COVER STORIES21 hours ago
FG To Fund 2019 Budget With Recovered Loots
NEWS19 hours ago
108 Firms Get Approval To Provide Meters, Says Fashola
NEWS14 hours ago
Presidency Prays For Obasanjo To “Get Well Soon”
NEWS10 hours ago
PMB Campaign Hits Kwara Feb. 4
NEWS12 hours ago
Buhari 2019:Govt Declares Monday Public Holiday Over Rally
NEWS11 hours ago
CJN: Court Orders Service Of Processes On CCT Chairman