Funding SMEs as an inclusive economic growth strategy
Micro, small and medium enterprises (MSMEs) are touted to be the engine of economic development and deliberate efforts must be put in to ensure they remain viable.
This was the view of experts and stakeholders in the sector, who also noted that while the number of MSMEs has continued to soar in recent times, the ability to access funds for the operations has been a major challenge.
Hence, the capacity of MSMEs to play their roles as job and wealth creators, poverty alleviators, and platforms that sustain food security has been challenged.
Indeed, recent data provided by the National MSMEs collaborative survey 2020, put the number of micro, small and medium enterprises (MSMEs) in Nigeria at 39,654,385 with total employment put at 59,647,954 (76.5 percent of the labor force), contributing 46.31 percent to GDP and 6.21 percent to exports.
With these numbers, experts said deliberate efforts must be put in place to grow the sector to achieve the national vision of job creation, wealth creation, and poverty alleviation.
The Director-General, Small and Medium Enterprises Development of Nigeria (SMEDAN), Dr. Dikko Radda, said MSMEs must be supported by all stakeholders to ensure a structured contribution to economic growth and development.
Highlighting the relevance of MSMEs to economic growth, Radda noted that they are ready-made tools for the adaptation of technological innovation, providing opportunities and platforms for foreign direct investment (FDI) and boosting local manufacturing.
He added that MSMEs help to release scarce capital towards productive use and as small units, they can muster resources more efficiently to full capacity with minimal wastage.
Radda maintained that despite the new opportunities to participate in the global economy that digital technologies and global value chains provide MSMEs, they still lag in terms of the digital transition, and are more adversely impacted by inefficient institutions and structural barriers.
“Support to MSMEs should therefore focus on building necessary skills and competencies that can assist them in implementing the necessary organizational and strategic changes. At the same time, greater attention should be paid to the mode and type of training, as well as to the advisory services provided to MSMEs. Also, policies facilitating collaboration and networking opportunities between MSMEs and local/international knowledge centres (including universities and research institutes) should also have a positive effect on strengthening MSMEs’ innovation capabilities,” the SMEDAN boss stressed.
Radda listed contemporary development challenges confronting MSMEs include poor access to affordable finance leading to inadequate working capital, lack of workspace, poor access to both local, regional and international markets leading to poor business turnover, obsolete technology leading to inability to compete globally, weak infrastructure leading to the high cost of doing business, absence of patent right and unprotected intellectual property rights, low capacity utilization and non-effective implementation of the National Policy on MSMEs.
He also decried poor management of business operation due to lack of business management skills, administrative barriers to doing business, and multiple permits and fees by the state and municipal level as the bane of smallholder businesses in Nigeria.
Attribution-https://guardian.ng/business-services/funding-smes-as-inclusive-economic-growth-strategy/
