Monday, May 11, 2020 / 6:34 PM / Bukola Akinyele for
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Technology has played a major key role in helping businesses grow in the rural and urban parts of the country. It has also influenced the rate of competition and opportunities available in different global markets said Mr. Ayo Akintujoye Covener of Lagos SME Bootcamp. He noted that over 41.5m micro small and medium-sized enterprises (MSMEs) contribute to more than 84% of employment in the country.
Speaking on WebTV's Economy and Politics programme Akintujoye believed that the period of the novel coronavirus (COVID-19) was the appropriate time MSMEs to leverage on technology improve the scale and scope of their businesses and add value to the economy's product and service value chains.
According to him, the International Monetary Fund (IMF) projected that Nigeria might enter into a recession with the country's gross domestic product (GDP) declining by -3.4% due to the global pandemic which will affect jobs, result in a decline in revenues and hurt operating cash flows, particularly, for MSMEs.
Akintujoye spoke on the impact of micro-enterprises, noting that they have played a key role in creating employment and propelling economic activities. He said 75% of all Small and Medium Enterprises (SMEs) have less than 10m in business capital, while 6% of MSMEs started-out with 40m in start-up capital which suggests that most businesses operate as small enterprises.
Giving further thought to the significance of SMEs, the Bootcamp Convener believed that the sector has affected thousands of households as a swift and convenient interface with consumers while providing sustenance for several homes. He considered the micro and small businesses segment of the economy as the heartbeat of domestic employment and growth.
On what needs to be done to help micro-businesses very critical to the economy, the enterprise expert commended the Central Bank of Nigeria's (CBN's) N50bn intervention fund and the decision to cut rates on the Fund from 9% to 5%.
He was of the view that with over 40m MSMEs in Nigeria no one institution could reach the total business population effectively. He recommended that the government enter into partnerships with market associations, and microfinance banks to ensure that funds reach the targeted beneficiaries and markets.
He explained that Nigeria's MSMEs are informal which makes it difficult to trace them with registration, he said there is a need for the government to encourage the MSMEs to migrate to the formal sector to gain access to intervention opportunities which would generate fiscal revenue through taxes and sundry fees or charges.
Speaking on ways to boost the manufacturing sector what drives or motivates MSMEs in Nigeria is largely survival because about 70% of Nigerians live in poverty such as high unemployment rate, securities issues, instability due to all these people go into self-employment MSMEs and Specialisation becomes secondary. He said
He highlighted ways MSMEs can stand on survival and sustainability post COVID-19:
He concluded that the policy framework to be considered for MSMEs was to study their dynamics and demographics to stimulate the economy.