Nigeria MSMEs need partnerships, funding to thrive – Business Executives

Experts have emphasised that Nigeria’s micro, small, and medium enterprises (MSMEs) need collaboration, knowledge, funding and opportunities to thrive, which many entrepreneurs erroneously do not take note.

Many business consultants and executives who spoke at the inaugural Enterprise Support Organisations (ESOs) Forum, an initiative of the Nigeria Impact Investors Foundation, themed: ‘Scalable Pathway for ESOs in Nigeria to Build MSME Investment Readiness Capacity’ held recently in Lagos, disclosed that despite the crucial roles enterprises play in the economy, entrepreneurs are struggling.

Etemore Glover, the chief executive officer of Impact Investors Foundation in her address said that MSMEs need partnership, knowledge and funding, among others to thrive in Nigeria’s business space.

“Small and medium enterprises are the backbone of the Nigerian economy, but the investment readiness is frequently questioned. Despite building business traction and scaling plants, many MSMEs struggle to secure affordable financing,” she said.

Glover buttressing her view said that the 2023 national advisory board for Impact Investment and the NESG report highlighted the important of partnerships in identifying regulatory issues around financing gaps in the NABI’s key sectors, health, education, and agriculture.

“Our findings provide a clear roadmap for addressing the existing gaps and building a more supportive environment for entrepreneurs across the country,” she said.

According to her, the report explained that providing MSMEs, which comprise 96.7 percent of businesses in Nigeria, with funding, knowledge, and opportunities to thrive should be the top priority of the Nigerian government as these businesses provide 87.9 percent of employment, and contribute about 49.7 percent to the national GDP.

Additionally, 72 percent of enterprises are not adequately prepared for the market, emphasising the need for improved readiness programmes. The report also highlights the challenges MSMEs face in adopting new business models, which limits their competitiveness in an increasingly digital and global market.

Also, Patrick Okigbo, the founder and principal partner at Nextier, an advisory firm with a focus on energy and other public policy issues said that SMEs are crucial to growing Nigeria’s economy, however, despite the crucial role small businesses play in both job creation, innovation and development of Nigeria’s economy, the entrepreneurs are still struggling to access funding.

“MSMEs embody our nation’s resilience, innovation and entrepreneurial spirit. However, despite their importance, MSMEs, which comprise about 48 percent of private enterprises in Nigeria, continue to struggle

“Nearly 61 percent of MSMEs in Nigeria fail within nine years, even with various government initiatives aimed at supporting them,” he said.

Okigbo emphasised that access to finance is a persistent challenge, but he stressed that beyond capital, many MSMEs also lack the structured support, mentorship and technical expertise necessary to attract investment and achieve sustainable growth.

Yewande Ososanya, chief executive officer at Strateco Sustainability said investment into Africa’s MSMEs has long been hindered by the pipeline problem.

According to her, pipeline problem is the notion that there are not enough investment-ready companies to absorb the capital available for investment.

To resolve this, she said; “It is time we face this problem head-on, with concrete actions to boost investment readiness and increase the funding required for Nigeria’s businesses to grow.

Our entrepreneurs use their skills, creativity, innovation, technology and unique value propositions to solve urgent problems, some of which only entrepreneurs can solve, and many have taken up that mandate.”

Ososanya disclosed that besides, financial capital, entrepreneur need non-financial support in the form of capacity building, community and connections which she said is vital for business success.

“ESOs coach, consult and counsel entrepreneurs to become investment ready, scale successfully and meet their financial and impact goals. They directly impact the success of businesses, and they indirectly benefit the customers that these businesses serve. Supporting entrepreneurs effectively requires continuous learning and adaptation,” she noted.

Commenting on the funding, Alice Dada, technical country lead, Nigeria, RISA Fund, said, “This report provides a comprehensive view of Nigeria’s ESO ecosystem, mapping key players, their innovative offerings, and strategic priorities.

By strengthening ESOs, we can unlock greater opportunities for MSMEs, foster economic growth, create jobs, and advance innovation across the country.”