The federal government is taking proactive measures to fuel the growth of Micro, Small, and Medium-sized Enterprises (MSMEs) within the nation. To achieve this, Temitola Adekunle-Johnson, senior special assistant to the President on MSMEs and Job Creation, has disclosed that the government intends to facilitate a ₦75 billion loan with a single-digit interest rate for small business operators by 2024. During a conversation with Channels Television, Johnson stressed the significance of President Tinubu’s leadership in focusing on the development of the sector.
This will bolster the smooth operation of businesses in Nigeria. It will also empower small and medium enterprises to easily approach banks and secure loans at an interest rate as low as 9 percent. It was emphasized that Tinubu’s administration fully comprehends the significance of MSMEs to the nation’s economy. Consequently, every effort will be made to ensure that the implementation of this single-digit loan scheme proceeds swiftly and flawlessly, without any hindrances or obstacles.
Nigeria houses 36.9 million MSME’s – 96.7% of the country’s businesses.
In order to enhance the ease of conducting business in Nigeria, their focus for 2024 is to ensure a smooth operational process. The upcoming year holds a distinctiveness that sets it apart from previous ones, as emphasized by the affirmation of the President’s vision. With about 36.9 million MSMEs, Nigeria proudly houses these enterprises as they make up a significant 96.7 percent of the country’s total businesses. What’s particularly noteworthy is that a remarkable 67 percent of these businesses are owned by the youth.
Also, in the past year, the vice president’s office made an announcement regarding the opportunities for small businesses. They declared that in collaboration with the Bank of Industry (BOI), these businesses are entitled to a loan with a single-digit interest rate. Vice President Shettima announced on June 27, 2023, that the government is diligently striving to facilitate swift accessibility to loans with single-digit interest rates for small businesses in Nigeria. This concerted effort aims to expedite the process as efficiently as possible, aligning with the commemoration of World Micro Small and Medium Enterprises Day in 2023.
They contribute 45 percent of the nation’s Gross Domestic Product.
According to Trading Economics global macro models and analysts’ expectations, the Manufacturing Purchasing Managers Index in Nigeria experienced a surge in December 2023, reaching 52.70 points, as opposed to the 48.0 points registered in November. It is anticipated that by the conclusion of Q2 2024, the index will settle at around 50.60 points. Nigeria’s economy heavily relies on the active participation of MSMEs, which exert considerable influence. These entrepreneurial ventures spearhead progress by fostering innovation, generating employment, and instilling healthy competition across various industries.
Unsurprisingly, MSMEs contribute a significant share of 45 percent to the nation’s Gross Domestic Product, primarily dominated by the micro segment, accounting for a staggering 98.8 percent. Such businesses also assume responsibility for nearly 90 percent of all jobs present in the country, making their efficient operation absolutely crucial for sustainable growth. It serves as the backbone of various sectors, ranging from manufacturing and agriculture to technology and services, but operates on a smaller scale in comparison to massive corporations.
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These enterprises possess unique qualities, including limited manpower, reduced capital investment, and localized operations. They are renowned for their remarkable agility and adeptness in promptly adjusting to the ever-changing market demands. In emerging markets, these entities possess the ability to be creative and unveil unique opportunities that directly address the preferences and requirements of the local populace. Additionally, they play a vital role in creating job opportunities, thus significantly diminishing unemployment rates. Moreover, they tend to have lower prerequisites in terms of formal education and training, opening up avenues for a wider demographic to engage with them.