The Need for Nano: Revealing a Hidden Dimension of Small Business in Nigeria


Image Credit: Dr Timi Olubiyi

By Timi Olubiyi, PhD

It is my prayer for this new year to be prosperous, irrespective of the experiences and disruptions we have had in 2020 a different year by any definition, strange and challenging especially for businesses and economies throughout.

Consequently, for a hopeful 2021 and to accelerate economic growth in Nigeria the Micro Small Medium Enterprises (MSMEs) which is the lifeblood of most economies in the world needs to be given more attention and further recognition.

No doubt, MSMEs support wealth creation, employment creation, standard of living, and in poverty reduction, amongst others.

However, with my observation so far in Nigeria, particularly in Lagos State the economic hub of the country, the most significant of all the benefits of MSMEs is that it reduces poverty but this can majorly be said to be from an informal and unrecognized category that I refer to as the Nano businesses within the MSME or small business space.

These Nano businesses are the various “solopreneurs” and home-based businesses such as make-up artists, event planners, battery chargers, independent dispatch riders, vendors, call centre agents, fashion designer, vulcanizers, drycleaners, corner shop owners, single retail marketers, repairers, painters, business centre operators, market women and men in the various open markets, among others.

They play an unrecognized but important role all across the country but by classification, they are not likely to meet the Small and Medium Enterprises Development Agency (SMEDAN) micro-business criteria, which is the least classification. So invariably they appear unaccounted for and in my view, these informal business settings constitute a large portion of our economy according to an investigation.

As the economy continues to shrink with less formal employment opportunities and with significant loss of jobs due to the novel coronavirus (COVID19) pandemic and possibly with the economic recession, a big reason to stop waiting around for jobs and simply create own employment is Nano business.

Nano-business is usually made up of 1-3 people, with even less than N50,000 initial capital outlay, however, with a target of daily income for the sustenance of the operator.

More importantly, this form of business does not necessarily target long-term capital growth. The most essential benefit is that the Nano business provides employment opportunity that guarantee’s the operator a stable daily income.

Even though it supports independence, entrepreneurial skills, self-reliance, and poverty reduction it is largely unrecognized in the country by ruling class. Likewise, amongst the employed class in Nigeria, it is now a common phenomenon to hear about running a side hustle.

Many are developing Nano businesses as side hustles to support monthly salary income. This is an indication of how the business population is growing and the formal working environment changing to make Nano businesses viable as an economic driver in Nigeria. Therefore, it is crucial for the government to pay attention to this identified business class.

Even though the Small and Medium Enterprises Development Agency (SMEDAN) the organ of the government responsible to promote the development of the MSME sector in Nigeria, their most recent survey report, captured the number of micro-enterprises in the whole country as 41,469,947. This number appears not to have taken into consideration these important informal Nano businesses in the country, which are labour intensive and exist in most homes and neighbourhoods.

Undoubtedly, the Nano businesses are currently seen as micro-businesses by regulators in the country but by definition and context observation, they are clearly not. They are simply different in all ramifications because the business size and scale are different from micro-businesses.

Furthermore, many research outcomes in the country over the years suggest that micro businesses are more in the retail sector with more women and youth participation in the country, this can also be said of Nano businesses but with fewer assets and capital requirements.

Therefore, due to the importance of this set of businesses a subcategory of small businesses, with sales turnover and assets values that are lesser than that of micro businesses should be classified and recognized as the Nano businesses because they operate with less capital. In addition, they should be accounted for going forward in the country and the government should encourage their business registrations with incentives.

Since they enjoy a closer relationship with customers than other forms of businesses and some are even generational. In fact, this form of business is the lifeblood of most homes in Nigeria currently according to the survey, because it is a breeding ground for entrepreneurial development.

For the sake of clarity, the use of the term-Nano has nothing to do with nanotechnology. It is only to adjudge that nano is smaller than micro and such level exist within the small business ecosystem. If put into the right context, Nano businesses should exist as the largest segment within SMEs in Nigeria because of their economic relevance, coverage, and spread.

Simply, it is a form of business without a fancy business plan or a five-year projection to expand and all. Most times Nano businesses are with no employees, lack structure, or even the least a business registration and frequently they lack bank accounts.

Therefore, a national survey is suggested to capture those that have been existing and stable for a certain number of years. So that a database can be created for analysis, support, policy formulations and necessary interventions by government.

What must be observed in the country with key interest is that the Nano-business ecosystem continues to grow without adequate recognition and attention from the government. Some even run business associations willingly due to the important role they play politically and economically but without the Corporate Affairs Commission (CAC) registration.

If federal and states governments including other policymakers recognize their significance and offer interventions and business support services such as capacity building, networking, technology usage, access to resources, funding, and counselling to these Nano businesses, they will become more structured and the rate of failure of such businesses will decline and they will further impact the economy positively.

Besides, a national business database is vital, it would provide insights into the business population, demographics, age distributions, mortality, and help with infrastructure gaps. It can also help in developing the right targeted policies to fix or alleviate, social issues and it can also be used for so many verifiable and evidence-based statistics, evaluations, and a lot of inferences can be derived from it.

On a positive note, a small business can be a great tool to reduce the increasing unemployment rate in the country and bridge the financial gap for citizens trying to be independent and be self-employed. In the end, it will contribute to the total Gross Domestic Product (GDP) generated in the nation, and will be captured in real terms. It can expand the tax-base and also tax revenue from business income taxes, sales taxes, and other required State and Federal taxes and levies.

It is significant to mention that Nano businesses are just as viable as micro, small, or midsize businesses but largely with informal orientation.

Consequently, the government needs to recognize the Nano business and the important role they play in the economy. More attention is therefore required on small businesses and policy interventions to tackle the obstacles to ease of setting up and doing business in the country are suggested. Once a business-friendly environment that makes business excel easily, is provided by the government – infrastructure, regulatory, national policy interventions, in particular, a business can strive and scale up quickly to deliver and create jobs to support economic growth.

In conclusion, to have a better result going forward, government, policymakers, banks, and SMEDAN need to intensify their efforts to disseminate information on financing, capacity development, technology, and other needs. SMEDAN can launch a mass registration program for Nano businesses nationwide for a database setup. More importantly, uncertainties and multiple taxations in the system, regulatory reforms, and macroeconomic environment need more government attention. Good luck!

How may you obtain advice or further information on the article? 

Dr Timi Olubiyi, an Entrepreneurship & Business Management expert with a PhD in Business Administration from Babcock University Nigeria. A prolific investment coach, seasoned scholar, Chartered Member of the Chartered Institute for Securities & Investment (CISI), and Securities & Exchange Commission (SEC) registered capital market operator. He can be reached on the Twitter handle @drtimiolubiyi and via email: [email protected], for any questions, reactions, and comments.

Related Stories

Beyond Borders: Exploring 3 Pillars of Andi-Co Australia Success

One company has not only survived the storms but has flourished internationally, creating an enduring impression on the worldwide business scene. Andi-Co Australia is known worldwide as an innovator that provides high-quality production and sustainability. It transcends all limits to indicate success. This blog is about the 3 key pillars which have become the foundation of the great success that Andi-Co Australia has achieved and its secrets revealed. The ascent of Andi-Co Australia is not just a tale of business triumph; it is also a tale of perseverance, vision, and an unflinching pursuit of excellence. Who is Andi-Co Australia? Since


What Next After the Re-opening of the Markets in Lagos?

By Olutayo Irantiola In the last few weeks, many markets across Lagos State have been locked and opened by the Ministry of Environment and the Lagos Waste Management Authority (LAWMA). There is no gainsaying that these markets are due for closure. However, what next after the re-opening of the markets? One of the places in town synonymous with huge refuse generation is the markets. Many times, markets are considered to belong to nobody; as such, traders want their immediate environment habitable for their businesses, and at the close of the day, they “drop” the byproducts of their wares somewhere, mainly


Top Security Tips for Churches

By Emmanuel Udom Are you a church founder or what is commonly known as a general overseer? Good enough if your answer to this very question is yes. This means you have followers or worshippers in your church. Yes, God is the chief security officer of our world, but we must work alongside God to ensure that our world with an estimated population of 7 billion people is saved and secured. Head or tail, you, your followers or worshippers, your assets and the properties in your church must not be tampered with by intruders. These intruders; kidnappers, terrorists, robbers, killers,


Why Sanofi is Not Exiting Nigeria, Changing its Global Business Model

By Sunkanmi Vaughan The reason is unusual and too technical for most people to understand, including most journalists who cover business and political news. As one with an understanding of that highly technical professional sector, I will break down the technicality in the Sanofi strategy for easy understanding and explain why the misunderstanding or misreporting occurred. In the business world covered by economy/business-reporting journalists, everything boils down to profit. It can be a real struggle indeed for the journalists to understand the priority of Sanofi. If you add the unpatriotic politics of disinformation, then you have a bigger problem to

More Stories

Brexit: Britain Pledges Not To Abandon Africa

By Modupe Gbadeyanka A member of the United Kingdom’s House of Lords, Mr Paul Boateng, has stressed that Brexit does not mean the British government will turn its back on Africa. Mr Boateng made this known while speaking at the first ever Africa Trade Forum which is being hosted by the Economic Commission for Africa and the African Union. However, he said it presents Africa and the UK with an opportunity to “put development at the heart of our trading relationship with Africa in a way frankly that it has not always been in relation to the EPAs, let’s be frank


Value of Equities on NASD Exchange Rises by 2.78% in One Week

By Adedapo Adesanya The value of securities on the NASD Over-the-Counter (OTC) Securities Exchange increased by 2.78 per cent last week as a result of the growth recorded by four companies on the trading platform. These firms were Central Securities Clearing Systems (CSCS) Plc, FrieslandCampina WAMCO Nigeria Plc, Nipco Plc, and Niger Delta Exploration and Production (NDEP) Plc. On the part of NIPCO, it gained 10.00 per cent to close the week at N73.70 per unit compared with the previous N67 per unit. Friesland appreciated by 5.90 per cent to finish the week at N128.50 per unit in contrast to


Stock Exchange Halts Trading of Chellarams Shares

By Dipo Olowookere The trading in the shares of Chellarams Plc at the nation’s stock market has been put on hold by the management of the Nigerian Exchange (NGX) Limited. This action was taken last Thursday, according to a notice issued by the NGX to the investment community. The reason for suspending the stocks of the company was because of its failure to file its financial statements as required by the listing rules. According to the stock exchange, the embargo on Chellarams shares was pursuant to Rule 7.1(b): Rules for Listing on the growth board of the NGX Limited which


MTN Targets N400b Bond Sales in 2018

By Modupe Gbadeyanka The management of MTN Group Limited is planning to issue bonds worth N400 billion (about $1.1 billion) later this year. Proceeds from the exercise would be used to fund the company’s investments in Nigeria and replace its existing debt. Chief Financial Officer (CFO) of MTN Group, Mr Ralph Mupita, informed Bloomberg in an interview recently that, “We want to gear up our debt on an operational level away from the holding structure.” He explained in the interview that, “The debt must be where the Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is and we want to


Nigeria Exports N14.41trn Crude Oil in 2021—Report

By Adedapo Adesanya Crude oil valued at N14.41 trillion was exported out of Nigeria in 2021, a report by the National Bureau of Statistics (NBS) has said, while the value of Premium Motor Spirit (PMS), also known as petrol, imported into the country in the year increased by 88.2 per cent. In its latest report, the stats office said the petrol import bill of the country, which prides itself as the largest economy in Africa, stood at 3.97 trillion in the period under review compared with N2.11 trillion in 2020. Although widespread belief was that the Nigerian National Petroleum Company (NNPC)


42 Equities Trigger 1.61% Growth on NGX in One Week

By Dipo Olowookere The Nigerian Exchange (NGX) Limited recorded a 1.61 per cent growth last week, triggered by gains posted by 42 equities, higher than the 33 equities that closed on the gainers’ chart a week earlier. In the five-day trading week, University Press was the best-performing stock, rising by 28.46 per cent to settle at N1.58. FBN Holdings appreciated by 21.74 per cent to N9.80, Courtville rose by 17.14 per cent to 41 kobo, Ecobank gained 16.67 per cent to sell for N6.30, while Pharma Deko grew by 10.64 per cent to N2.60. During the week, a total of


Crude Oil Loses 4% Ahead of Next Week’s OPEC Meeting

By Adedapo Adesanya  Prices of crude oil went down by more than 4 percent at the international market on Friday as a result of reports which fuelled doubt that the extension on production cut that is expected to be made at next week’s meeting of the Organization of Oil Exporting Countries (OPEC) may not follow through. As a result of this, major futures depreciated from gains gathered during the month of November. By implication, Brent crude, the international benchmark which traded up to $64 during the week, fell by 4.39 percent as it shed $2.78 to trade at $60.49 per


3 Directors Quit Capital Hotels Plc as Idigie Elected Chairman

By Modupe Gbadeyanka Three non-Executives Directors of Capital Hotels Plc have resigned from the company effective from Friday, June 30, 2017. A statement issued by the firm on Wednesday, July 12, 2017 gave the names of the affected directors as Mr Victor Oyolu, Engr Yakubu Disu, and Mr Eddie Chukwura. The statement noted that after the Board Meeting and Annual General Meeting (AGM) held on June 29, 2017 and the Board Meeting held on July 9, 2017, six persons were elected into the board of the company as non-executive directors. The new directors are Mr Anthony Idigbe (SAN), Mr Abatcha

Recent Stories

Apprehension as Prices of Medication Drugs in Nigeria Surge by Over 1,000%

 By Adedapo Adesanya A new report from SB Morgen Intelligence has shown that prices of drugs have skyrocketed by as much as 1,000 per cent in the last four years, raising worries about Nigerians being able to treat themselves using orthodox methods. In the report Paying the Price on Health, the firm analysed the impacts of the Nigerian economy and foreign exchange crisis on the prices of essential medicines in the country. It was found that between 2019 and 2023, there were massive surges across four broad categories of Antimalarial, Antibiotics, Painkillers and Common Cold medicines. The report indicates that antibiotics


Board Chooses Onaivi to Head mediaReach OMD Nigeria

By Modupe Gbadeyanka From January 1, 2024, Mr Stephen Onaivi will take charge of mediaReach OMD Nigeria as the new Managing Director following the approval of his appointment by the board of the organisation. He was chosen for the position after working as the MD of OMD Ghana, where he contributed to developing a multi-disciplinary, forward-looking media and advertising industry and serviced an array of national, multinational, and regional clients. In his new role, Mr Onaivi will drive the OMD brand across West and Central Africa to enhance client value and ensure the seamless integration of OMD values, technology, and


Tanzanian Sensation Abigail Chams Joins Spotify’s EQUAL Africa as December’s Artist Ambassador

Afro-pop songstress Abigail Chams (real name Abigail Chamungwana) continues to collect accolades. Following her nomination in 2022 for the Emerging Artist award at the Tanzania Music Award, she closes 2023 as the Spotify EQUAL Africa ambassador for the month of December. The prodigiously talented Abigail, or Abby, as she is often referred to, is a multilingual singer who performs in Swahili, French and English. She is also a multi-instrumentalist who plays five musical instruments, the violin, piano, guitar, flute and drums. The Nani hitmaker was born into a family with a musical heritage where her grandfather directed an orchestra and


MultiChoice Talent Factory in West Africa: A Year of Empowering Creatives and Transforming the Industry

Since its launch in 2018,  MultiChoice Talent Factory (MTF), a dynamic corporate shared value (CSV) initiative, has been at the forefront of imparting the technical skills needed for high-quality film production in Africa. Yearly, the MTF West Africa Academy trains and graduates a new set of African storytellers, via a 12-month fully funded training programme that equips them to project the culture of African communities through their films and moves. Some of these young talents have gone on to produce movies and series, some of which aired on Africa Magic channels. Like in any industry, partnerships are the strategic anchor


Shippers’ Council Ready to Partner Lekki Deep Seaport

By Adedapo Adesanya The Nigerian Shippers’ Council (NSC) has expressed its readiness to partner with the Lekki Deep Seaport by promoting the seamless movement of cargo and the efficiency of the nation’s ports. The NSC Executive Secretary, Mr Pius Akutah, gave the assurance when the Managing Director, Lekki Port LFTZ Enterprise Limited (LPLEL) – promoters of Lekki Deep Seaport, Mr Du Ruogang, led the port’s management on a courtesy visit to the NSC in Lagos. Mr Akutah, who commended the Lekki Deep Seaport management for the visit, said the council would partner with the port in areas that would boost


Nigeria Puts Presidential Aircraft Falcon 900B For Sale

By Adedapo Adesanya Nigeria has put the presidential aircraft, Falcon 900B, up for sale with the Nigerian Air Force (NAF) asking interested persons to submit their bids for the purchase of the aircraft. It was not disclosed how much the craft would be sold, according to a tweet on the official Nigerian Air Force page on X, formerly known as Twitter, where it said the aircraft was put up for sale following the federal government’s approval. “The Federal Government of Nigeria has approved the sale of Falcon 900B aircraft owned by the Nigerian Air Force (NAF),” NAF said in a


Airtel Africa Launches Nxtra by Airtel, Appoints Yashnath Issur as CEO

By Aduragbemi Omiyale A new data centre business known as Nxtra by Airtel has been unveiled by Airtel Africa Plc, with Mr the former head of Global Data Centre Portfolio Management at Amazon Web Services, Mr Yashnath Issur, appointed to lead the new organisation. Mr Issur is armed with about 16 years of experience in the industry and has, over the past year, built a team of experts to execute the strategy. Business Post gathered that Nxtra was established to meet Africa’s growing needs for trusted and sustainable data centre capacity and to serve the fast-growing African digital economy. The


The Banker Magazine Names Stanbic IBTC ‘Bank of the Year in Nigeria’

By Aduragbemi Omiyale The Banker magazine, a publication of the Financial Times, has announced Stanbic IBTC Holdings Plc as the Bank of the Year in Nigeria. The Nigerian financial institution was honoured by the media platform as an awards cement held on Thursday, November 30, 2023, in London. The event, widely acknowledged as the Oscars of the Banking Industry, attracted several critical stakeholders in the global banking sector. It was explained that Stanbic IBTC Holdings was picked for the recognition because of its exceptional achievements in banking excellence, adept navigation of industry challenges, and commitment to providing innovative financial services


Aleph Unveils Aleph Express for Nigerian MSMEs

By Aduragbemi Omiyale An application and proprietary solution for micro, small and medium-sized enterprises (MSMEs) in Nigeria, known as Aleph Express, has been launched by Aleph Group. A statement from the firm explained that Aleph Express provides a platform for MSMEs to create and maintain a free e-commerce website, create a product catalogue, set local delivery options, manage, record and process orders while gaining meaningful insights to drive growth. The platform also provides one unified inbox that integrates WhatsApp, Messenger, and Instagram, to enable businesses to efficiently engage and sell – all in one place. In addition, Aleph Express provides


NLC to Negotiate Cost of Living Reflective Minimum Wage

By Adedapo Adesanya The Nigeria Labour Congress (NLC) has said it would ensure that the next national minimum wage to be negotiated in 2024 reflects the prevailing cost of living. The union also lamented that following the removal of fuel subsidy by the federal government, life has become extremely unbearable for workers. Addressing participants at the opening of the 19th edition of the NLC’s Harmattan School in Abuja, President of the NLC, Mr Joe Ajaero, said it had become necessary for governments at all levels to recognise that life and living conditions were exceedingly difficult, especially for working people in