Blog: #NES28 Presummit Event: Key Drivers for Economic Prosperity

Posted Sat, Aug 27, 2022 7:00 PM

On Thursday, 25th August 2022, the Micro Small and Medium-scale Enterprises (MSME) Community of Practice of the Nigerian Economic Summit Group (NESG) and the Federal Ministry of Finance, Budget and National Planning held a pre- 28th Nigerian Economic Summit (#NES28) event with the theme “Key Drivers for Economic Prosperity: A Critical Look at Entrepreneurship Policies.”

In her welcome remarks, Board Director of the NESG, Mrs Wonu Adetayo, said the day’s event is hosted by the MSMEs Community of Practice of the NESG and that the Nigerian entrepreneurship system continues to grapple with pandemic-induced recession and the current macroeconomic problems of the Nigerian economy. She noted that accessing finance and Nigeria’s poor business environment exacerbate the issues of the economy, and even though the Nigerian economy continues to show resilience, a lot of MSMEs continue to struggle with the impact of the challenges.

Furthermore, Mrs Adetayo noted that the 2021 MSME survey reported a 4.5 percent decline in MSME growth, indicating a drop from 41.5 million recorded in 2018 to 39.6 million in 2021, primarily due to the impact of the pandemic; which means that 1.9 million MSMEs have gone out of existence. “As Nigeria looks to welcome a new government, economic growth should be a frontline issue and an immediate area of focus, considering that entrepreneurship is a critical driver of the economy. To implement policies and interventions, entrepreneurship policies must be addressed, including the attendant gaps, and this event will review key policies around thematic areas to promote access to finance,” she stated.

In his presentation, Chief Economist and director of research and development NESG, Dr Olusegun Omisakin, said that there is a need for Nigeria’s oil sector to perform well, considering that the growing non-oil sector doesn’t contribute to job creation. He revealed that the return of inflationary pressure and declining purchasing power affects the Nigerian economy and that weak growth combined with inflation and unemployment may lead to recession and social unrest. 

Furthermore, Dr Omisakin stated that access to credit and an unconducive business environment impact production capacity and the prices of products and contribute to inflationary trends; noting that the relationship between oil prices and trade surplus shows that 79% of Nigeria’s total exports are crude oil, but the country has failed to use it to her advantage, resulting in a decline in Foreign Direct Investments (FDI). 

The Honourable Minister of State, Federal Ministry of Trade and Investment, Ambassador Mariam Katagum, who was represented by Mr Sunday Ewans, Director in charge of Enterprise and promotion, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), stated that major policies address key areas that affect small businesses. She noted that Micro businesses form the majority of the 39.6 million MSMEs in Nigeria, accounting for over 95% of all MSMEs. Furthermore, she revealed that in a 2020 impact assessment survey of MSMEs, small businesses said they lack adequate access to affordable finance, skills and market access. 

Ambassador Katagum further revealed that the ministry had developed an MSME development fund based on a public-private partnership model to help develop a robust scheme for small business owners to tap into. She noted the importance of a regulatory environment and enactment of policies that encourage ease of doing business to support and make small companies effective by creating a platform for regular interaction between stakeholders to facilitate feedback mechanisms that can support and help them tackle their challenges. 

On his part, the Managing director/CEO of Development Bank of Nigeria (DBN), Mr Tony Okpanachi, said that DBN provides technical assistance for financial institutions, partial credit guarantees and capacity development for MSMEs. He noted the existence of a funding gap in the sector which affects the availability of funding for MSMEs. More so, Mr Okpanachi pointed out that the problems of MSMEs funding can be linked to a lack of bankable projects, proper financial records, collateral and lack of capacity to develop their businesses to attract the right kind of funding. He revealed that about 572 billion Naira had been given out through financial institutions, and 235,000 MSMEs accessed the funds, with 67% and 27 % women-owned and youth-owned businesses, respectively. 

During the panel discussion, Dr Ezra Yakusak, Executive director/CEO of Nigerian Export Promotion Council (NEPC), who was represented by the Assistant Director, NEPC, Ms Esther Ikporah, stated that there is a need to have more private sector players to support MSMEs with access to global finance. On his part, Mr Eke Ugbiji, the executive secretary of NASME who represented the President Nigerian Association of Small and Medium Enterprises (NASME), Engr. Abdulrasid Yarima said that there is a need to explore different funding mechanisms, noting that Fintech companies lack access to wholesale funding, and there is a need to ease access to financing of all MSMEs.


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