How MSMEs Are Driving Economic Growth in Nigeria
The Small and Medium Scale Enterprise Development Agency of Nigeria (SMEDAN) says that MSMEs currently represent 96% of the businesses in Nigeria and contributes 75% of the national employment. Of the 17.2 million MSMEs in Nigeria over 17 Million are micro-enterprises. Thus, the growth in this sector is directly correlated with the growth in the economy and in curbing unemployment in Nigeria.
However, a number of challenges are inhibiting the potential of MSMEs in Nigeria. Prominent among these challenges are (a) Very low access to affordable finance (b) Poor access to Business Development Service (BDS), and (c) Inadequate infrastructure/high cost of doing business. Despite these, it has not deterred MSMEs from contributing to Nigeria’s economic growth. Here are a few ways MSMEs are doing this:
MSMEs are the product of the business owner’s entrepreneurial spirit. By starting a small business, the business owner is taking charge of his or her future. Entrepreneurship fuels Nigeria’s economic innovation and prosperity and serves as a key means for families to move out of low-wage jobs and into the middle class. Hence, there is no need to wait for the government’s empowerment programmes. You can empower yourself by leveraging on digital technology to start a business
Small businesses are job creators despite the many challenges they face. They have enabled a certain cadre of Nigerians to earn a living. A company that supports these MSMEs is Jumia. Jumia, Nigeria’s no 1 shopping destination via, Jumia Lending, has supported the millions of vendors selling on its platform with small loans and ensuring that they are run smoothly without any hiccups. Jumia lending gives small businesses the opportunity to grow and expand their businesses by granting vendors access to fast and easy short-term capital. With this capital, these vendors are able to employ more hands thus creating more jobs and the society will be better for it.
Innovation and competition
Small businesses, like any business, need to stand out from the crowd in order to survive. They must serve a legitimate need in Nigeria and do it better than their competitors. Having multiple small businesses all striving to be unique, innovative, and better can result in a healthy marketplace and well-served consumers.
Investing in products and services people need
What motivates a person to start a new business? Small businesses create new businesses in response to unmet needs and demands in the market. That is, there is an opportunity to provide a product or service that is not currently in existence, or otherwise available.
New technologies promote efficiency
The ability to turn ideas into new products and services that people need is important in a developing country like Nigeria. This is driven by new technologies and creative applications. With more and more small businesses embracing technology to boost service delivery, they have positioned themselves to earn more revenue and contribute to the growth of the economy.