By Emmanuel Otori
The Micro, Small and Medium Enterprises (MSMEs) sector is estimated to have over 40 million small businesses in Nigeria and contributes over 50 per cent to the Gross Domestic Product (GDP) with respect to job creation and national development.
Despite the scale at which the industry is contributing to the growth and development of the economy, especially as the population of Nigeria continues to increase exponentially, there are some gaps that need to be filled and they are;
- Lack of Structure
Most MSMEs fail in their first few years of starting out because they lack structures such as employment and human resources policies, a budget for advertising, and maintaining a unique brand. The lack of these essentials makes the organization only serve their immediate environment which comes with a lot of risk factors as expansion would become difficult, most especially to locations where the products or services are needed. But without the needed standard, reaching other markets would not be achievable as there are expectations from these prospects that the organization might not be able to meet up with.
- Low Online Visibility
Most MSMEs across Nigeria are not visible online, and with the emergence of new markets, the internet has become a tool to aid e-commerce from any part of the world. One of the key tools to increase online visibility is a website and social media platforms. These tools aid communication when prospects search online for a need. The key to maximizing sales is to increase online visibility through the techniques in the digital market to gain entry into new markets.
- Lack of Proper Financial Records
The MSMEs sector still operates with minimal information with respect to financial records, so as to monitor the income and expenditure which determines the range of profitability. Inability to utilize tools for keeping proper financial records as a result of the focus on production and operations by MSME owners could lead to bankruptcy as measuring the healthiness of the business per time becomes unknown.
Other gaps are the high cost of rent, access to finance, double taxation, unstable electricity, difficulty in getting a skilled workforce etc.
The opportunities in the MSME sector are enormous and foster huge contributions, some of these opportunities are;
- Job Creation and Wealth Generation
Job creation has been the major challenge of most administrations in Nigeria as they strive to make the citizens prosperous by gainful employment. The support MSMEs provides reaches every stratum of the economy as a breadwinner now has the economic ability to support their family or dependents and this done multiple times and consistently by different entrepreneurs is a building block for economic prosperity.
- Creating a Potentially Stable Economy
The COVID-19 pandemic and aftermath of the recession due to the drop in the prices of oil have led to hardship for many. However, with the MSME sector empowered with financing, it aids to cushion the effect of economic hardship and serves as a buffer for economic recovery.
- Export Potential
The export potential of any nation demands that its economy is first involved in production for self-sufficiency, the leverage from being a producing economy now creates the opportunity to export physical, human and material resources. Nigeria’s potential to maximise proceeds from export entails capacity building in order to meet up with the expected standards and procedures of other nations. The effect of our activities around export can be seen in the remittances made from the diaspora, which creates a sustainable economy.