41.5m MSMEs in Nigeria Contribute 48% to GDP

By Adedapo Adesanya

A total of 41.5 million Micro, Small Medium Enterprises (MSMEs) in Nigeria contribute to about 48 percent (precisely 47.8 percent) to the country’s Gross Domestic Product (GDP), the Nigerian Bureau of Statistics (NBS) has said.

A further analysis showed that the MSMEs contribute to about 96 percent of businesses and 84 percent of employment in the country compared with South Africa, which make up 91 percent of the economy and contribute a higher GDP of 52 percent, with 60 percent of employment.

According to the NBS data published in 2019, Nigeria has a total of 41.4 million Microenterprises (99.8 percent); 71,228 small businesses and 1,793 medium enterprises (0.2 percent).

Lagos State is credited with the highest number of micro enterprises, followed by Katsina which had 36.4 percent, Rivers 21.7 percent and Kaduna 18.1 percent while Nasarawa State had the least.

A further breakdown showed that the five major sector of the economy were Wholesale/Retail trade which represented 42.3 percent, Agriculture accounted for 20.9 percent, other services 13.1 percent, Manufacturing 9.0 percent, while Accommodation and Food Services 5.7 percent among others.

With these impressive numbers for enterprises in Nigeria, they are, however, faced by a wide range of threats, plaguing the development to effectively contribute even up to 50 percent of the GDP from inadequate of access to capital, the major driving force of any business.

Others include inadequate access to information on business opportunities; insecurity bedevilling development; strict government policies stifling the ease of doing business; multiple taxation; infrastructural gap among others.

There has been a lot of avenue for expansion such as the Central Bank of Nigeria’s N200 billion affordable loans to MSMEs and the Anchors Borrowers Programme launched by the President Muhammadu Buhari led administration expected to create more than 500,000 jobs.

Even with the provision of necessary financing, the feasibility of expanding the contribution of MSMEs will also bank on having a favourable environment that is secure, necessary infrastructure from roads to electricity, and relaxed government policies that will allow for businesses to thrive.

With the implementation of this, the MSME sector in Nigeria is strategically positioned to create up to 80 percent of jobs, improve per capita income, increase value addition to raw materials supply, improve export earnings, enhance capacity utilisation in key industries and unlock economic expansion and GDP growth.