Why SMEs aren’t contributing enough to Nigeria’s export— UNILAG research team

Despite constituting over 80 percent of businesses in Nigeria, Small and Medium Scale Enterprises, SMEs, contribute less than five percent to the nation’s export to other nation. Also, the SMEs also contribute about 40 percent to the country’s Gross Domestic Product, GDP, a team of researchers from the University of Lagos, UNILAG, has said. The team, led by Prof. Olufemi Shuaib, disclosed this during a TETFund sponsored stakeholders dissemination workshop on their research. The research they conducted was titled “Institutional quality, SMEs productivity, global value chains participation and export intensity in Nigeria.” Shuaib, who is also the Director, Quality Assurance, SERVICOM, UNILAG, while giving the background to the research, said the Tertiary Education Trust Fund, TETFund, gave them the grant for the research in 2022. “We went to 13 states in the country after being given the grant. We administered over 6,500 questionnaires in 39 local government areas in those states. It was done from July to August 2022. We interacted with a number of agencies like SMEDAN and our findings revealed many things.

“In the course of conducting the research, we discovered that some business owners hoard information about their businesses, some believed that the effort was to tax them. Also, political instability prevented us from gaining access to some areas among others,” he said. Giving details of their findings, the Principal Researcher, Prof. Tajudeen Yusuf, listed a number of impediments on the way of SMEs in Nigeria and why their contributions to economic growth has been low. SMEs are to create jobs, wealth and be able to compete globally, but that is not fully the case in Nigeria for a number of factors. Some of them don’t even know the value of what they produce. They lack information with which to turn around the fortunes of their businesses. Some of them have had their goods destroyed abroad because they could not meet international standards. The government is also not helping enough to let them have access to financial support as it is done in some other climes. They have weak capital base and that makes it difficult for them to compete globally, ” he stated. Yusuf, while explaining the nature of some of the SMEs, said more than 51 percent are not registered, while over 72 percent are sole ownership. The team thanked TETFund for the support and called on agencies of government working in areas of promoting small businesses to be alive to their responsibilities.