Experts on Monday underscored the need for key policy recommendations for Micro, Small and Medium Enterprises (MSMEs) development to focus on areas of financing, capacity and structure.
They gave the advice at a webinar organised by the Small and Medium Enterprise Group (SMEG) of the Lagos Chamber of Commerce and Industry (LCCI).
The event’s theme is: “Ensuring SME Growth in a Challenging Economy.”
West Africa Tax Leader, Deloitte, Mr Yomi Olugbenro, stressed that these key areas would increase MSMEs contributions to the country’s Gross Domestic Product (GDP) and spur economy stability and growth.
Olugbenro said a credible financial system enabled by technology was paramount for funding and operating efficient settlement systems for MSMEs survival in the near future.
He noted that in spite of the various global economic disruptions, Small and Medium Enterprises (SMEs) were expected to survive if only structural development could be established over time.
He also called for improved credit rating systems, expanded credit risks guarantees coverage, and a wider implementation of financing across major markets.
On structure, Olugbenro stressed the need for partnership with business consultants to provide SMEs with technical support and access to markets.
He also called for infrastructure based policies that encompasses efficient power distribution to different industrial clusters.
“We must also build the capacity of entrepreneurs by providing capacity building support services focused on training entrepreneurs on relevant skills.
“The national education standards must be revamped to drive early exposure to entrepreneurship, and improve entrepreneurship education in state owned institution.
“SME loan portfolio must also be diversified following a gender and sector agnostic strategy,” he said.
The Director, Enterprise Development Centre, Dr Peter Bamkole, said that a national survey during the COVID-19 pandemic revealed that 93 per cent of SMEs encountered several challenges which led to some businesses shutting down and downsizing.
He, however, noted that the seven per cent that thrived were businesses that were digitally enabled in their operations from raw materials sourcing to after sales services.
He stressed that henceforth, SMEs must be more collaborative among themselves, and reinvent their business models with operations carried out in a more efficient, innovative and creative manner for profitability.
“A significant number of those in the services sector should think of renewable energy to reduce cost of production.
“SMEs must add more value to their goods and services before exports, connect with SME across the continent to optimise the benefits of the Africa Continental Free Trade Area (AfCFTA),” he said.
President, LCCI, Dr Michael Olawale-Cole, said most recent conversations around the role, challenges, and growth opportunities for MSMEs underscored their importance as the engine of growth of any economy.
Olawale-Cole represented by the Director General, LCCI, Dr Chinyere Almona, noted that United Nations statistics revealed that MSMEs account for 90 per cent of businesses, 65 per cent of employment and 50 per cent of GDP worldwide.
He, however, posited that SMEs were now more than ever in need of support, as they navigate the impacts of the COVID pandemic, insecurity, supply chain disruptions, and the climate crisis.
He stressed that Nigerian policymakers must move beyond recovery and consider ways to lower and eliminate barriers faced by MSMEs, improve the business environment and access to special intervention finance, markets and technology in these fragile times.
He added that government must invest more in export infrastructure to ease the export of goods from Nigeria to the rest of Africa under the African Continental Free Trade Agreement (AfCFTA).
“In recent times, the Nigerian economy has suffered several shocks as a result of rising double-digit inflation rates; tepid growth; high unemployment, and even higher underemployment due to constrained productive activities and others.
“We still believe that these challenges can be fixed with the right mix of fiscal and monetary policies that promote targeted financing for the SME sector and intervention funding for manufacturers.
“The LCCI is also very interested in supporting SMEs in accessing funding opportunities by interfacing with local and international developmental finance institutions on behalf of our members.
“We reiterate our point that SMEs need special intervention funds targeted at supporting production, export capabilities, and building resilient supply chains,” he said.