The Vice President, Yemi Osinbajo has reiterated the federal government’s commitment to supporting Micro, Small and Medium Scale Enterprises (MSMEs).
He made this pledge on Monday through the Permanent Secretary, Federal Ministry of Finance, Mahmoud Isa-Dutse.
Mr Isa-Dutse said this when he represented Mr Osinbajo at the inaugural Development Bank of Nigeria (DBN) annual lecture series held in Abuja.
The lecture themed “SURVIVING TO THRIVING: MSMEs as the key to unlocking inclusive growth in Africa” is an initiative of the DBN which provides a platform for a robust exchange of ideas to meet the challenges and opportunities that exist in the MSME segment of the economy.
Mr Osinbajo said the lack of sufficient investment in human capital development is not limited to Nigeria but across Africa.
He, however, promised a changing narrative by the government which he said is assisting the MSMEs with ”favourable policies, plans, and programs to enable their success as it is in many developed nations across the world”.
“Since the inception of President Muhammadu Buhari’s administration, the government has recognised the need to pay the utmost attention to the MSMEs because they account for almost 60 per cent of Nigeria’s GDP
“This administration has demonstrated a willingness to develop this sector, by either enacting laws or setting up government agencies and institutions to address the challenges faced by the various stakeholders in this critical sector of the economy,” he said.
In his welcome address, the managing director/CEO of the DBN, Tony Okpanachi, said although statistics across the continents shows MSMEs are the bedrock of economic growth and development, access to finance is still a concern.
“The latest figure indicates that at the micro-level, about 90.5 per cent do not have access to credit whilst the figure for SMEs is put at 67.9 per cent. Other pressing areas which rank high for SMEs are assistance in power and water supply – 83.5 per cent as well as tax rate reduction – 73.1 per cent,” he said
According to him, MSMEs are, collectively, the largest employers in many low-income countries including Nigeria, ”yet their viability and growth are restricted by lack of access to long-term debt capital”.
He said the mandate at the DBN is to alleviate financing constraints faced by the MSMEs in Nigeria ”through the provision of financing and partial credit guarantees to eligible financial intermediaries on a market conforming and fully financially sustainable basis”.
He further said the lecture series is the outfit’s way of providing a platform for a robust exchange of ideas.
In his remarks, the African Union High Representative for the Peace Fund and former president and chairman of the board, African Development Bank, Donald Kaberuka, said young African entrepreneurs and MSMEs are much more resilient than their counterparts in other parts of the world.
He said in order to support MSMEs, ”a good understanding of the country in which they operate should be considered”.
“Think of a small car repair vehicle in Kaduna or a small kiosk owner in Soweto. If electricity is unreliable, his small margins are gone even if they had access to finance.
“Think of red tape, and, multiple level taxation or inability to access government procurement or not being paid on time,“ he said.
He, however, said he has no doubt that the DBN can make sound independent investment decisions and will be a key factor in unlocking the potential of Nigeria.
The vice president, country Operations, Islamic Development Bank, Mansur Muhtar, in his presentation, listed eight key directives that can improve MSMEs financing.
These include: ”developing supportive legal/regulatory framework; strengthening financial information infrastructure; designing effective government support mechanisms; broadening the range of financing instruments; address capacity building; training and awareness needs, facilitate trade and value chain integration, leveraging and partnering with private sector/other development actors, monitoring, tracking and adapting”.
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