The Federal Government (FG) has promised to explore the opportunities in the micro, small and medium (MSME) enterprises to boost the nation’s economic development.
The Minister of State for Budget and National Planning, Prince Clem Ikanade Agba, who made this known at the fourth strategic planning meeting of the forum of MSME business membership organizations of Nigeria (MSME forum), said aside from economic development, leveraging MSMEs would also help address galloping inflation.
According to him, the MSMEs were the engine of growth in any economy, with them dominating the private sector space and creating over 50 percent of jobs in developing countries.
“In Nigeria, the contribution of SMEs to GDP between 2015 and 2020 was put at 48 percent on average. SMEs account for 50 percent of industrial jobs and nearly 90 percent of activities in the manufacturing sector.
“MSMEs are also known to be very active in promoting backward integration, as most of them engage in the use of local materials as intermediate inputs in the production of goods,” Agba, represented by his special adviser, Sufyan Ojeifo, submitted.
Continuing, he noted that the present administration of President Muhammadu Buhari was unmindful of the challenges hindering the growth and development of MSMEs in Nigeria, including unfriendly business environment, skilled manpower, infrastructural deficit, multiple taxation, inadequate access to finance; and high cost of capital.
Role of MSMEs in boosting economy
MSMEs are the bedrock of the Nigerian economy as they provide platforms on which economic growth thrives. Business experts agree that MSMEs have significantly contributed to economic growth through job creation, revenue generation, and economic diversification, among others.
Generally, all the businesses start either as small businesses or as small enterprises initiated by individual(s) or groups of people.
According to World Bank, MSMEs contribute to about 90% of businesses and more than 50% of employment worldwide. Formal SMEs contribute up to 40% of national income (GDP) in emerging economies.