The founder of the Kosofe Chamber of Commerce and Industry, Joe Femi-Dagunro, highlighted the value of an inclusive local chamber to facilitate communication between local government and business owners. This organisation helps small and medium-sized businesses (SMEs) build their businesses, network, and advocate for policies. To examine economic issues and offer answers, the chamber brings together a range of stakeholders through events such as the Kosofe Economic Dialogue. High energy prices, insufficient funding, high taxes, and inconsistent government policies are some of the major challenges that Femi-Dagunro cited for Nigerian SMEs.
His recommendations include encouraging the use of renewable energy, providing financial assistance specifically designed for true entrepreneurs, and providing firms with sufficient notice before making changes to policies. In order to lessen business challenges, Tax breaks and cooperation arrangements should be encouraged, and Loan procedures should be open. Small and medium-sized businesses are urged to embrace contemporary Technology like artificial intelligence (AI), use online channels to increase their visibility, and establish marketing partnerships in order to prosper in the digital age. Additionally, Femi-Dagunro champions better banking practices, such as reduced interest rates and moratoriums for small enterprises, and emphasises the necessity of openness in government funding schemes.
They employ over 80% of the workforce & account for over 48% of GDP.
While acknowledging the difficulties posed by President Bola Tinubu’s economic reforms, he emphasises the significance of long-term accountability, openness, and supportive conditions in promoting economic progress. The backbone of Nigeria’s economy, small and medium-sized businesses (SMEs), employ over 80% of the workforce and account for over 48% of the nation’s GDP. However, these companies have to contend with issues including difficult financing, expensive energy, and erratic government regulations. Notable interventions with quantifiable success have occurred in spite of these obstacles
.
To lessen the COVID-19 pandemic’s effects on households and SMEs, The Central Bank of Nigeria (CBN) introduced the Targeted Credit Facility (TCF) in 2021. With figures showing a 76% repayment success rate, more than 881,000 beneficiaries—including many SMEs—had received more than ₦500 billion by the middle of 2023. Likewise, the Nigerian Youth Investment Fund (NYIF), established in 2020, gave 10,000 young entrepreneurs ₦3 billion to help them expand their companies and create jobs.
Significant progress has been made in business growth.
For instance, since its establishment in 2016, the Lagos State Employment Trust Fund (LSETF) has provided low-interest loans and grants to more than 40,000 SMEs. Significant progress has been made in business growth and job development, according to participants, with an expected 93,000 employment produced directly and indirectly by 2023. The largest Economy in Africa, Nigeria, is susceptible to changes in the world market because of its heavy reliance on oil earnings. Rising Inflation rates, which peaked in August 2023 at 25.8%, cause SMEs’ operating expenses to skyrocket.
Moreover, businesses incur an additional annual cost burden of almost $29 billion due to unpredictable Electricity supplies. Investments are further deterred and growth is slowed by unpredictable policy changes and administrative obstacles. These elements highlight the significance of focused interventions for SMEs’ empowerment. Participants emphasised the Kosofe Economic Dialogue’s function as a forum for stakeholders to come together. In order to increase production, a young Fashion industry entrepreneur attributed the event to helping her get in touch with a financial institution that granted her a ₦2 million loan at a discounted interest rate.
Related Article: SMEDAN Boss Assures SMEs of a Brighter Future
Likewise, a small-scale Agro-business owner reported learning more about the use of renewable energy, which has since resulted in a 30% reduction in his operating expenses. Representatives of the government also praised the discussion for offering useful input on current policies, which sparked conversations on revising tax laws to support SMEs. Plans for quarterly meetings have been sparked by the event’s favourable feedback and practical impact, with the goal of promoting relationships and long-term economic progress.