Micro, Small and Medium Enterprise MSME Nigeria Overview Update
– MSME Nigeria Overview –
Micro, Small, and Medium Enterprise (MSME) Project seeks to contribute to faster growth and job creation by supporting the development of MSMEs. In this article, all you need to know about MSME has been fully been highlighted below.
MSME Nigeria Overview
MSME Nigeria Overview: Micro, small and medium enterprises (MSMEs) play a big role in the Nigerian economy and economies around the globe.
MSMEs outnumber large companies by a wide margin and also employ many more people. SMEs are important for economic and social reasons, given the sector’s role in employment.
The definitions of micro-business, small business, and medium business depend on the country and who is defining the terms.
In Nigeria, Micro Small and Medium Enterprises (MSMEs) are generally referred to as enterprises with up to 250 employees.
The definitions of small and medium enterprises are as follows: –
• Micro Enterprises: between 1 and 9 employees.
• Small Enterprises: between 10 and 49 employees.
• Medium Enterprises: between 50 and 249 employees.
MSME Nigeria Overview aims to:
• Develop and strengthen the capacity of local intermediaries to deliver financial and non-financial services to MSMEs
• Reduce selected investment climate barriers that constrain MSME performance;
• Mobilize, via (i) and (ii), increased private investments in MSMEs, and intermediaries.
Population in Nigeria
According to the Ministry of Industry, Trade, and Investment, Nigeria has over 37.07 million micro, small and medium-scale enterprises, MSMEs, and they account for over 84 percent of total jobs in the country.
The ministry also claimed that the MSME enterprises in Nigeria also account for about 48.5 percent of the gross domestic product, GDP, as well as about 7.27 percent of goods and services exported out of the country.
Based on the total numbers of MSMEs in Nigeria, Micro Enterprises account for the bulk with 36,994,578 enterprises (about 99.8 percent), while small enterprises took 68,168, and medium enterprises 4,670.
Also, Lagos, Oyo, and Kano State are the top three states in Nigeria with the highest number of MSMEs in Nigeria.
MSMEs Benefits to Economic
Most economies, particularly those of developing countries like Nigeria, march on the shoulders of small and medium-sized businesses.
This is because MSMEs are characterized by dynamism, innovations, efficiency, and their small size allows for a faster decision-making process.
The benefits of MSMEs to any economy are easily apparent, they include:
• Contribution to the economy in terms of output of goods and services;
• Creation of jobs at relatively low capital cost, especially in the fast-growing service sector;
• Provide a vehicle for reducing income disparities;
• Develop a pool of skilled and semi-skilled workers as a basis for future industrial expansion;
• Improve forward and backward linkages between economically, socially, and geographically diverse sectors of the economy;
• Provide opportunities for developing and adapting appropriate technological approaches;
• Offer an excellent breeding ground for entrepreneurial and managerial talent, the critical shortage of which is often a great handicap to economic development, among others.
SMEs are believed to be the engine room for the development of any economy because they form the bulk of business activities in a growing economy like that of Nigeria.
Small and Medium Scale Enterprises in Nigeria
Small and Medium Scale Enterprises (SMEs) form the bulk of businesses in Nigeria. The attraction to the owners includes being less capital intensive and flexible in filling the need in niche markets.
Their contribution to the growth of the Nigerian economy cannot be understated as they drive the economic and industrial transformation of the country.
Notwithstanding the acknowledged role of the small and medium-scale enterprises, several factors limit their growth and ability to expand to meet the growing needs of the Nigerian populace. Such factors include;
1. Limited availability of funding from financial institutions and the government. This undoubtedly slows down their growth projectile and impedes the development of Nigeria as a truly world-acclaimed economy.
2. High Cost of Credit facilities inclusive of interest rates and maintenance costs and the demand for duly registered collateral obligations.
3. Inconsistency in Government policies and bureaucratic bottlenecks experienced in the administration of incentives and support facilities from all levels of government.
4. Multiple taxes because of levies and other tax expectations from both the State and Local Government Areas.
5. Lack of and/or limited infrastructures like power supply, good roads, transportation system.
6. Unavailability of local raw material.
7. High cost of procuring machinery.
8. Import Liberalization.
9. Export constraints.
What’s your take on this? We believe this article was helpful, if yes, don’t hesitate to share this information with your friends on Facebook, Twitter, WhatsApp, and Google plus.
CSN Team.
