Globally, Micro-, Small and Medium-sized Enterprises (MSMEs) account for 90 per cent of businesses, 60-70 per cent of employment, and 50 per cent of Gross Domestic Product (GDP).
Nearer home, where a survey by the National Bureau of Statistics (NBS) and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in 2018 put the number of MSMEs in the country at over 41.5 million, MSMEs’ critical role as heartbeat of Nigeria’s domestic employment and growth is, perhaps, more heart-warming.
For instance, based on the NBS/SMEDAN MSME Survey, which was cited by The Nation, Nigeria’s MSMEs account for 96 per cent of the total number of businesses in the country and contribute about 50 per cent to the national GDP. In terms of ownership structure, 73 per cent of MSMEs are sole proprietorships while 14 per cent are private limited liability companies.
The balance of 13 per cent is partnerships (six per cent), faith-based organisations (five percent), cooperatives (one per cent) and others (one per cent).
However, despite MSMEs’ widely acknowledged capacity to contribute to growth and development, job creation and export, among others, the sector, according to multinational professional services company PricewaterhouseCoopers (PwC’s) MSME Survey 2020, continues to be weighed down with challenges, which ultimately, impact growth. The Survey listed some of the sector’s challenges to include lack of skilled manpower, the multiplicity of taxes, bad policies and the high cost of doing business, among others.
PwC’s MSME Survey 2020 was themed “Building to Last: Navigating MSME Growth and Sustainability in a New Decade.” According to PwC Nigeria Country and Regional Senior Partner Uyi Akpata and Fiscal Policy Partner and West Africa Tax Leader Taiwo Oyedele, the survey’s objectives were to gauge the experiences of sector players, capture the challenges the sector faces, identify opportunities to unlock growth and investment, provide solutions, mitigate risks and assess the outlook for MSMEs across industries.
Although the survey was conducted prior to the COVID-19 pandemic, Akpata and Oyedele, said in the aftermath of the pandemic and as Nigeria entered an age of disruptions to traditional business models, traditional approaches to doing business surely must change. “Does the Nigerian environment offer a platform that ensures Nigerian MSMEs remain competitive? Will there be a ready workforce that can support the much-needed advancement for MSMEs? Or will we witness a slow down for decades following the pandemic?” they asked.
The experts were emphatic: “It is of uttermost importance that an inclusive approach is embraced to advance MSME growth and Nigeria’s competitiveness. Against this backdrop, therefore, the Micro-, Small and Medium-sized Enterprises (MSMEs) Day 2021 declared by the United Nations General Assembly is an opportunity for MSME players across various sectors, key stakeholders, as well as ministries, agencies and government authorities to once again examine how far their inclusive approach, if any, has helped galvanise and equip the nation’s struggling 41.5 million MSMEs.
The UN-designated June 27 as MSMEs Day. The idea was to raise awareness of the contribution that small businesses make to sustainable, inclusive and resilient economic growth and, shared prosperity and decent work for all. The MSME Day event, which will be virtual, will explore how to ensure MSMEs – the bedrock of society – are equipped to ensure a fast, equitable and sustainable post-COVID-19 recovery. It will also ensure that MSMEs are empowered to drive the achievement of the Sustainable Development Goals (SDGs), and supported to spur innovation, creativity and decent work for all.
On MSMEs Day 2021, almost 18 months after the onset of the pandemic, the UN noted that most countries will still be grappling with the pandemic and its severe health and socio-economic impacts, including lockdowns and the need to support those who have lost their jobs and livelihoods. This holds true, particularly for Nigeria, where the impacts of the pandemic almost decimated the nation’s 41.5 million MSMEs.
Indeed, since February 27, last year, when the COVID-19 pandemic found its way into Nigeria, it’s been a tale of woes for operators in all the sectors, particularly the MSMEs. Except those operating in the food, pharmaceutical and other essential services that were allowed to operate, although, under apprehensive conditions, the operations of most MSMEs were seriously hampered by the shutdown of business activities across the country as part of containment measures to curb the spread of the pandemic.
In the heat of the crisis, most MSMEs were unable to move their raw materials for production or deliver their finished products or services to customers due to movement restrictions, which resulted in heavy revenue loses. Consequently, a good number of them have since been forced to shut down, throwing many of their workers into the already saturated labour market; others slashed their employees’ salaries.
But in designating June 27 as MSMEs Day, the UN believes that achieving the SDGs and an economy that is greener and fairer requires resilient and flourishing MSMEs everywhere, Nigeria inclusive. This must be why part of the objectives of this year’s event is to strengthen awareness and capacities of policymakers and MSMEs in achieving fairer, resilient and sustainable recovery that contributes to achieving the SDGs.
The event also seeks to contribute to global debates on MSMEs in the post-pandemic recovery, including through environmental sustainability, and empowerment of youth, women, migrants and refugees. It will also create space for action, recommendations and practical tools that lead to more targeted policies and measures, including stimulus packages, supportive ecosystems and opportunities for MSMEs, especially women and youth-owned MSMEs.
While these laudable objectives are not lost on Nigeria, which is why the government has continued to support MSMEs with relief or intervention funds, for instance, the consensus is that a more inclusive approach that goes beyond tax reliefs and intervention funds to include addressing issues of inadequate power supply, or lack of it, decrepit road infrastructure, insecurity, and other harsh business conditions is required.
There is also the lack of access to information on how MSMEs can digitise their services, which experts say is capable of hurting Nigeria’s push for a sustainable and inclusive MSME-driven post-COVID-19 economic recovery.