MSMEs Need Patient Capital, Lighter Regulation To Create Jobs — NESG

The Nigerian Economic Summit Group (NESG) has said Micro, Small and Medium Enterprises (MSMEs) need access to patient, long-term capital and a lighter regulatory burden if they are to become the main engine of job creation in Nigeria.

Ahead of the 32nd Nigerian Economic Summit (NES #32), the private-sector think tank warned that the MSME sector continues to operate below its potential due to limited access to finance, high regulatory costs, infrastructure deficits, and the difficulties of moving from informal to formal operations.

“Access to finance remains a perennial barrier; regulatory costs are prohibitive; infrastructure deficits, particularly in power, logistics, and connectivity, erode competitiveness; and the path from informal to formal operation remains unclear and costly,” the NESG said in a policy document for the summit on Sunday.

Patient capital for MSMEs

The group called for the mobilisation of diverse sources of patient capital through development finance institutions (DFIs), blended finance, credit enhancement schemes and private-sector participation, targeted at manufacturing firms and MSMEs with potential for jobs, exports and value addition.

It argued that MSMEs need long-term, affordable financing rather than short-term, high-cost credit, to expand production, hire more workers and integrate into regional and global value chains.

In earlier remarks, NESG chief executive officer Dr Tayo Aduloju, had said Nigeria needs at least N2 trillion in 2026 and 2027 to revitalise the MSME sector and address structural weaknesses.

The think tank has also proposed measures such as temporary interest-rate relief on credit extended to MSMEs to improve financial access and affordability.

On regulation, the NESG said high compliance costs and complex procedures are discouraging small businesses from formalising, even though formal firms are better positioned to employ workers, access credit, and provide social protection.

At NES #32, participants are expected to examine practical strategies to strengthen MSME competitiveness while creating easier, more affordable pathways to formalisation.

“MSME formalisation is not a bureaucratic exercise; it is a jobs policy,” the group said, adding that when small businesses thrive, they hire, and when they formalise, their workers gain access to social protection and credit.