The Development Bank of Nigeria (DBN), has expressed its commitment to ensure that Micro, Small and Medium Enterprises (MSMEs) are adequately empowered to contribute effectively to the Gross Domestic Product of the nation.
The Managing Director, DBN, Mr Tony Okpanachi said this on Monday in Abuja at the Bank’s Maiden Lecture Series with the theme; “MSMEs as the Key to Unlocking Inclusive Growth in Africa”.
Okpanachi said that MSMEs were collectively the largest employers in many low-income countries including Nigeria, yet their viability and growth was restricted by lack of access to long-term debt capital.
“Statistics have shown that across the continent, and many global economies, MSMEs are the bedrock of economic growth and development because of the critical role they play in accelerating economic transformation and industrialisation.
“In Nigeria, recent data released by both SMEDAN and the National Bureau of Statistics (NBC) affirm that there are about 41.5 million MSMEs in Nigeria and collectively they contribute to well over 50 per cent of Nigeria’s GDP.
“However, access to finance is still a concern for this critical segment of the economy.
“The latest figure indicates that at the Micro level, about 90.5 per cent do not have access to credit.
`Other pressing areas which rank high for SMEs are assistance in power and water supply as well as tax rate reduction,’’ he said.
Also speaking, the Chairman, DBN, Mr Shehu Yahaya said that the mandate of the bank was to alleviate financing constraints being faced by the Micro, Small and Medium Enterprises (MSMEs) in Nigeria.
He recalled that poverty and inequality had deepened in the country due to population and economic growth which was not leading to creation of more jobs.
According to him, the bank wants to change the narrative by providing finance and partial credit guarantees to eligible financial intermediaries on a market conforming as well as fully financially sustainable basis.
The Permanent Secretary, Ministry of Finance, Dr Mahmoud Isa-Dutse said that since the inception of the President Muhammadu Buhari’s administration, the government recognised the need to pay utmost attention to the MSMEs.
He said that this was because MSMES accounted 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 stakeholders in this critical sector.
“Development Bank of Nigeria and other Development Finance Institutions are mandated to cater specifically for sustainable growth in various productive sectors of the economy.
“It is my expectation that our decisions will lead Nigeria to a glorious future where MSMEs can grow sustainably, scale up exponentially, become globally relevant entities and contribute immensely to the economic development of our continent,’’ he said.
Meanwhile, Dr Donald Kaberuka, a former President of the African Development Bank, said that aside finance, the major setback to small businesses was unfavorable government policies and bureaucracies.
“Think of a small car repairer 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.
“But there is also inexperienced management and capacity, and limited access to accounting services,’’ he said.
Kaberuka called on the Nigerian government to intensify efforts to achieve more than six per cent growth if Nigerians were to feel impact of the growing economy.