Industrial growth hinges on MSME-large firms’ partnerships

As Nigeria strives to revive its industrial sectors and diversify its economy, experts say Micro, Small and Medium-sized enterprises (MSMEs) must partner larger firms.

According to analysts, several industrial policies have affected the growth of Nigerian MSMEs in 2024. However, in 2025, leveraging on collaborations with larger firms would enhance the productivity and efficiency of these small firms and also provide them with enough access to finance, technology and market capital.

During the Analysts Data Services & Resources (ADSR) Limited’s 2025 Nigerian macroeconomic outlook recently, its report revealed that the leading contributors to Nigeria’s GDP in 2024 were Agriculture (28.65%), ICT (16.35%), Trade (14.78%), Manufacturing (8.21%) sectors.

However, the financial & insurance sector accounted for 5.51 percent of Nigeria’s GDP but continues as the major driver of economic growth and remained the fastest growing sector in recent times.

The report, “Turning Reform pains to citizens’ gains in the Mid-term year”, presented by Dotun Seyingbo, principal economist at ADSR, emphasised the need for the Federal Government to rethink industrial policies to focus on linking micro and small enterprises with larger firms for increased efficiency and productivity in this year.

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“There is a need to build a strong foundation for long-term productivity and export-led growth to strengthen the Nigerian currency and also couple financial sector growth with real sector expansion through adequate lending and advisory for economic growth,” the report said.

ADSR urged the FG to monitor reform success for learning and take bold decisions by adopting relevant and effective means to eliminate insecurity problems, ensuring that states are more empowered to drive the administration’s economic growth agenda.

Joseph Ogebe, head of research, at Nigerian Economic Society (NESG) stated that most businesses recorded high production cost and increased cost of purchasing raw materials due to some reforms that started in mid-2023 into 2024.

“Reforms like subsidy removal were long overdue to cut down the inefficiencies of businesses. Most business owners complained about the high costs incurred in logistics that move their goods across the country and within the country. This reform added pressure on their costs, squeezing up their profits,” he said.

He added that rising inflation was another reform that affected consumers’ purchasing power, causing reduction in demands of some businesses in 2024.

“Most Nigerian MSMEs saw a reduction in demand in 2024 because consumers’ incomes were actually depleted with rising costs. However, they decided to adopt new strategies by reducing production rate and number of workers” he said.

Ogebe emphasised that the major concern about these reforms were their sequence and how they were implemented.

“We have seen interventions in terms of the government increasing the minimum wage to N70,000 and improvement in cash transfers from the financial sectors but we have not seen much interventions for Nigerian businesses, especially MSMEs. They are struggling to survive,” he said.

Olu Ajakaiye, chairman of the African Centre for Shared Development Capacity Building (ACSDCB) said; “I would like to encourage the effect of the reforms, desirable as they are, or maybe inestimable as they may seem, on the environment within which the business is operating especially in the aspect from the PMS pricing,”