Gaps and Opportunities within the Nigerian Micro, Small, and Medium Enterprises (MSME) Space
The Micro, Small, and Medium Enterprise (MSME) are estimated to be at over 40 million MSMEs in Nigeria. They contribute more than 50% to the Gross Domestic Product (GDP) with respect to job creation and national development. The scale at which the MSMEs contribute to the growth and development of the economy is quite high, despite the exponential increase of the Nigerian population.
Gaps Within the Nigerian Micro, Small, and Medium Enterprises (MSME) Space
Some of the gaps in the Micro, Small, and Medium sectors are as follows
Lack of structure
Most MSMEs fail in their first few years of starting out. This failure is because they lack structures such as
- Employment and human resources policies.
- Advertising budget.
- Ability to maintain a unique brand.
The lack of these essentials makes the organization only serve their immediate environment. This comes with several risk factors as expansion would become difficult. Expanding to locations where the products or services are needed is even more difficult. Reaching other markets would not be achievable without the required standard. This is because the organization might be unable to satisfy the expectations of these prospects.
Low Online Visibility
Most MSMEs across Nigeria are not visible online. With the emergence of new markets, the internet has become a tool to aid e-commerce from any part of the world. Several tools to increase online visibility exist, including websites and social media platforms. These tools aid communication when prospects search online for a need. The key to maximizing sales is to increase online visibility through digital marketing techniques to gain entry into new markets.
Lack of proper financial records
The MSME sector still operates with minimal information with respect to financial records. This means that it is difficult to monitor the income and expenditure which determines the profitability. Inability to utilize tools for keeping proper financial records could lead to bankruptcy. A bankruptcy coil occurs because measuring the healthiness of the business per time becomes unknown.
Other gaps are the high cost of rent, access to finance, double taxation, unstable electricity, difficulty in getting a skilled workforce, etc.
Opportunities Within the Nigerian Micro, Small, and Medium Enterprises (MSME) Space
The opportunities in the MSME sector are enormous and fosters huge contribution. Some of these opportunities are:
Job creation and wealth generation
Job creation has been the major challenge of most administrations in Nigeria. They often strive to make the citizens prosperous by gainful employment. The support MSMEs provides reaches every stratum of the economy. A breadwinner now has the economic ability to support their family or dependents. Different entrepreneurs achieve this feat multiple times, which is a building block for economic prosperity.
Creating a potentially stable economy
The covid-19 pandemic and aftermath of the recession due to the drop in the prices of oil have led to hardship for many. However, with the MSME sector empowered with financing, it aids in cushioning the effect of economic hardship. This serves as a buffer for economic recovery.
Export Potential
The export potential of any nation demands that its economy is first involved in production for self-sufficiency. The leverage from being a producing economy now creates the opportunity to export physical, human, and material resources. Nigeria’s potential to maximize proceeds from export entails capacity building in order to meet up with the expected standards and procedures of other nations. The effect of our activities around export can be seen in the remittances made from the diaspora, which creates a sustainable economy.
Emmanuel Otori has over 9 years of experience working with 100 start-ups and SMEs across Nigeria. He has worked on the Growth and Employment (GEM) Project of the World Bank, GiZ, and Consulted for businesses at the Abuja Enterprise Agency, Novustack, Splitspot, and NITDA. He is the Chief Executive Officer at Abuja Data School.
Meanwhile, spend some time checking out articles on SME360 to help you improve your business.
