SMEs urged to drive manufacturing value chain expansion

…as FATE Foundation unveils 10th business outlook

Operators of small and medium enterprises (SMEs) in Nigeria have been urged to seek expansion of manufacturing value chain to meet global standards and boost foreign exchange earnings.

Bongo Adi, a professor of Economics, and Data Analytics made the call in his keynote speech at the FATE Foundation’s 10th business outlook and alumni meeting.

Adi explained that global value chain orientation among Nigerian entrepreneurs is crucial to growing the country’s economy, and make it globally relevant.

Adi, who spoke on the topic; “Nigeria’s Economy: 2024 Review and Outlook for MSMEs in 2025”, on Friday, said having global value chain is the way innovation happens, and that it generates massive revenues for a country.

“Nigerians consume products from other countries such as Korea, Japan and China, among others, such as cell-phones, electronics, air-conditioners, and others nothing stops us from having our value chains in those products.

“Looking at the amount we spend in importing these products, we should strive to produce some parts of these products we consume,” he said.

The economist reiterated that for the country to grow its GDP, it must be driven by the amount of products and/or services it contributes into the products its citizens consume per time.

Stressing that export-oriented economy is the only way Nigeria can boost its economic growth.

He said entrepreneurs must enhance their products or service qualities to have global value chain.

“We have to enhance our products’ quality. Then, the basic building blocks which is education must be enhanced. We need machine tools that are at top qualities and enhance the human capacity.

“We can’t be competitive as a country, when we’re lagging behind our neighbouring countries, such as Togo, Benin, and Ivory Coast in vocational skills quality,” he noted.

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According to the renowned economist, “Businesses aiming to thrive in 2025 and beyond must embrace collaboration, even beyond borders, and avoid over concentration in service economy, and embrace export-oriented economy that attracts foreign exchange.”

He disclosed that despite Nigeria’s persistent fiscal challenges, tax revenues increased, due to growth in key sectors such as mining, finance, and telecommunications.

However, he said that the rise in public debt, worsened by exchange rate depreciation and new borrowings, highlights underlying fiscal vulnerabilities that need to be addressed.

The way forward according to the keynote speaker said without reducing the cost of governance, the fiscal and monetary reforms will only succeed in escalating misery and poverty in the land.

Nevertheless, he decried the fact that the signals from the government actors does not infuse significant confidence in the economy.

“There’re huge opportunities in the African nations for Nigerian entrepreneurs. Business owners should go out to others neighbouring countries and collaborate with other entrepreneurs across borders,” he said.

Adi revealed that there is hope for SMEs because according to him Naira is projected to gain moderate weight due to an increase in domestic petrol production, diaspora remittances, capital flow and the new CBN foreign exchange (FX) code.

“Economic growth in 2025 will be modest, with real GDP increasing by 2.6 percent as developed economies slow. Inflation is expected to ease, allowing for further monetary easing. Prices for agricultural and energy commodities will fall, but those for industrial raw materials will rise,” he noted, among others.

Toyin Bakare, the president of FATE Foundation alumni community said the reason for the occasion is for alumni members to discover opportunities to play big in the global value chain.

“One thing FATE Foundation does is to help members not only to scale up their businesses but to hold their hands and guide them through the trajectories of growing ventures,” she said.

Bakare said the foundation is poised to organise workshops that will help alumni optmise cross borders collaborations and tap into the global value chain space available to them.

FATE Foundation is Nigeria’s foremost enterprise support organisation enabling aspiring and emerging Nigerian Entrepreneurs to Start, Grow and Scale their businesses.