CPPE boss calls for better business environment

.MSME can create 20 million jobs

Amid the biting economic challenges, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the micro small and medium enterprise (MSMEs) sector holds the key to Nigeria’s economic prosperity if there is the right operating environment.

Yusuf also said that MSMEs can generate over 20 million jobs, noting that the sector has been struggling because it does not receive the right attention from the authorities.

Speaking at the 2023 business roundtable with the themes ‘MSMEs: The Catalyst for Nigeria’s Economic Rejuvenation and Growth’, organised by the National Association of Small and Medium Enterprises (NASME) in Lagos, the former Director General of Lagos Chamber of Commerce and Industry (LCCI), stressed that there are 39.65 million MSMEs while 96.9 per cent of them are micro-enterprises.

He said if for instance, only 50 per cent of them could create just one job each, they would generate about 20 million new jobs.

He said: “These are very challenging times for businesses, especially the MSMEs. Any MSME that is still standing, despite the prevailing difficulties, deserves to be celebrated and specially commended.

“The MSMEs are the pillars and the life wire of the Nigerian economy. They are the major sources of the resilience that the Nigerian economy had long been reputed for, amid numerous shocks. We are currently going through another round of shocks inflicted by the fuel subsidy removal and the partial unification of the exchange rate. Even though these reforms were desirable, the social outcomes have been very profound.”

Yusuf said the mortality rate among MSMEs in Nigeria is high because of the numerous headwinds in the Nigerian business environment.

“These challenges include the structural constraints, especially around infrastructure, the naira exchange rate depreciation and related liquidity crises in the foreign exchange market, galloping inflation, weak purchasing power, regulatory compliance costs, high transaction costs at the ports, the multiplicity of taxes and levies, high cost of logistics, insecurity effects on the agricultural sector, the influx of cheap Asian products into the Nigerian markets and the cost of fund,” he said.

Suggesting a way out, Yusuf said: “The systemic issues of infrastructure should be addressed as a matter of utmost priority. The immediate focus should be on electricity supply and logistics. Unless we have these two critical infrastructures in place, it will be very difficult to ensure a competitive industrial sector and to make possible the transformation of the sector.

“We should fix the foreign exchange liquidity and currency depreciation issues. MSMEs with annual turnover of N50 million and below should be exempted from corporate tax and value-added tax (VAT). This is in addition to tackling the problem of multiple taxes and levies on small businesses both by state and non-state actors.

“Structural issues on infrastructure should be addressed to improve productivity and competitiveness of manufacturing firms. We should address concerns about unfair competition from imported finished goods.

“We should address regulatory and institutional problems affecting MSMEs challenges of access to credit, cost of credit and tenure of funds should be addressed.”