Emmanuel OchayiDr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE) has emphasized the crucial role of Micro, Small, and Medium Enterprises (MSMEs) in driving Nigeria’s economic recovery and growth.
He made this statement in his keynote speech at the NASME Business Round Table held on September 19, 2023, at the Adeyemi Bero Hall in Ikeja, Lagos.
He commended the NASME Lagos Chapter for their efforts and highlighted the challenges facing MSMEs while offering policy suggestions and insights to bolster their growth.
Dr. Muda Yusuf expressed his delight in addressing the audience and praised NASME, Lagos Chapter, for organizing the 4th edition of the Business Roundtable. He commended the Lagos State government for its consistent support of MSMEs, recognizing the resilience displayed by these businesses in the face of numerous challenges.
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He acknowledged the severe challenges MSMEs encounter, such as infrastructure constraints, exchange rate fluctuations, inflation, weak purchasing power, regulatory compliance costs, high transaction costs, multiple taxes, and more.
Despite these challenges, Dr. Yusuf highlighted the resilience of many MSMEs in Nigeria.
The keynote speech revolved around the theme of the event, “MSMEs: The Catalyst for Nigeria’s Economic Rejuvenation and Growth.” Dr. Yusuf underscored the critical role MSMEs play in sustaining Nigeria’s economy and their contribution to resilience during economic shocks.
He delved into statistics provided by the Small and Medium Enterprises Agency of Nigeria (SMEDAN), which reported 39.65 million MSMEs in Nigeria as of 2020.
These businesses were predominantly micro-enterprises, with the highest numbers located in Lagos. Agriculture, trade, manufacturing, and other services were key sectors where MSMEs operated.
Dr. Yusuf highlighted the challenges small businesses face, including high energy costs, electricity tariffs, multiple taxation, access to finance, naira depreciation, insecurity, and the impact on small-scale farmers.
Dr. Yusuf discussed the policy implications of these statistics. He emphasized that supporting MSMEs could significantly accelerate job creation, particularly if policies were tailored to sector-specific needs.
He also stressed the importance of addressing the challenges of access to capital, power supply, energy costs, and multiple taxation to boost small business growth.
The speech pointed out that over 90 percent of jobs in Nigeria were created in the informal sector in the first quarter of 2023, necessitating a comprehensive framework for integrating the informal sector into the mainstream of economic policy.
Addressing the issue of deindustrialization, Dr. Yusuf highlighted factors contributing to the decline in manufacturing, including the influx of cheap and substandard imported goods, foreign exchange market instability, power shortages, high energy costs, multiple taxation, and inadequate domestic patronage.
Dr. Yusuf presented a comprehensive set of recommendations to address these challenges and stimulate industrialization and MSME growth:
- Prioritize infrastructure development, focusing on electricity supply and logistics.
- Address foreign exchange liquidity and currency depreciation issues.
- Provide tax exemptions for MSMEs with annual turnovers below N50 million.
- Tackle unfair competition from imported finished goods.
- Promote research and development investments.
- Support small businesses with business and technical skills development.
- Encourage large enterprises and foreign companies to subcontract to indigenous MSMEs.
- Promote the integration of the informal sector into economic policy.
- Encourage the development of MSME clusters to enhance productivity and cost savings.
- Embrace technology adoption in production, marketing, and business processes to improve competitiveness and efficiency.
Dr. Muda Yusuf concluded by emphasizing that MSMEs are vital to Nigeria’s economic growth, and it is essential to create an enabling environment for their success.
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