CPPE Chief Urges Improvement in Business Environment
"In the Midst of Economic Challenges, MSMEs Have Potential to Create 20 Million Jobs," Says CPPE CEO
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), highlighted that the micro, small, and medium enterprise (MSME) sector could be the solution to Nigeria's economic challenges if it is provided with a conducive operating environment. Yusuf emphasized that MSMEs have the potential to generate more than 20 million jobs, but they have been facing difficulties due to a lack of attention from authorities.
During the 2023 business roundtable themed 'MSMEs: The Catalyst for Nigeria's Economic Rejuvenation and Growth,' organized by the National Association of Small and Medium Enterprises (NASME) in Lagos, the former Director General of the Lagos Chamber of Commerce and Industry (LCCI) emphasized the significant role of micro, small, and medium enterprises (MSMEs) in Nigeria's economic revival. He noted that there are approximately 39.65 million MSMEs in the country, with 96.9 percent of them being micro-enterprises.
He further pointed out that if only 50 percent of these MSMEs could create a single job each, they would collectively generate around 20 million new job opportunities. In light of the challenging business environment, particularly for MSMEs, he commended and celebrated those that have managed to sustain their operations.
The MSMEs serve as the backbone and vital lifeline of the Nigerian economy. They have historically been the primary source of the resilience for which the Nigerian economy is known, despite facing numerous shocks. We are currently navigating yet another round of challenges resulting from the removal of fuel subsidies and the partial unification of the exchange rate. While these reforms were necessary, their social impacts have been deeply felt."
Yusuf highlighted that the high mortality rate among MSMEs in Nigeria is attributable to the multitude of challenges within the Nigerian business environment.
These challenges encompass structural limitations, particularly in infrastructure, the devaluation of the naira and resulting liquidity crises in the foreign exchange market, surging inflation, diminished purchasing power, regulatory compliance expenses, elevated transaction expenses at ports, an abundance of taxes and levies, elevated logistics costs, insecurity's impact on the agricultural sector, the influx of inexpensive Asian products into Nigerian markets, and the high cost of funding," he explained.
In proposing a solution, Yusuf emphasized, "Addressing systemic infrastructure issues should be an urgent priority. Immediate attention should be given to improving electricity supply and enhancing logistics. Without these two critical infrastructure elements, it will be extremely challenging to foster a competitive industrial sector and facilitate its transformation."
We must address the challenges related to foreign exchange liquidity and currency depreciation. MSMEs with annual turnovers of N50 million or less should be granted exemptions from corporate tax and value-added tax (VAT). Additionally, we must confront the issue of multiple taxes and levies imposed on small businesses, both by state and non-state entities.
"Structural concerns regarding infrastructure need to be resolved to enhance the productivity and competitiveness of manufacturing companies. We should also tackle concerns surrounding unfair competition posed by imported finished goods.
"To support MSMEs, we must address regulatory and institutional obstacles, including challenges related to access to credit, the cost of credit, and the duration of funds," he emphasized.
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