Understanding MSMEs (Micro, Small and Medium Enterprises) in Nigeria.
Micro, Small, and Medium Enterprises are taking over Africa’s economy especially in sectors you would not have thought and we at Triift Africa are here to help you understand how they operate. As at 2017, the total number of MSMEs in Nigeria stood at 41,543,028, with its components: Micro Enterprises (MEs) having 41, 469,947 (99.8%), Small and Medium Enterprises (SMEs) 73,081 (0.2%). They are all around you and have the potential to minimize the daunting unemployment rate in Africa.
Micro, Small or Medium? Here’s how to tell them apart.
Grace runs a catering service from her mum’s kitchen with her friends who are in-charge of delivering and planning surprise parties for clients. She operates a Micro Enterprise. Five years later, one of her friends, Tolu, decides to get independent. She rented a two room apartment to begin her events management firm, then hired experienced caterers to join her in planning and catering for events, as well as to train aspiring event managers. She currently has a total of 15 staff; you can call her a small business owner.
Subsequently, Grace married Chike who owns a logistics company in Lagos and has outlets in Ibadan, Ilorin and Port-Harcourt worth over sixty million Naira with a total of 68 staff including drivers and cleaners; he operates a medium enterprise.
The major disparity between Micro, Small and Medium Enterprises is in the value of the investments and returns, however, they all contribute significantly to the economy.
Self Examination: Are you creating a sustainable business?
IMPACTS OF MSMEs TO THE ECONOMY
The National Survey of Micro Small & Medium Enterprises (MSMEs) 2017 shows that 91.0% of businesses in the country are MSMEs and among the 5 major sectors that were evaluated and graded based on their economic performance, Wholesale/Retail trade topped the list followed by Agriculture. Here’s some ways small businesses have made a difference.
- Entrepreneurs and small business owners are increasing Africa’s manufacturing sector by meeting the growing demand of goods and services as well as ensuring the production and supply of locally produced commodities.
- Investment Opportunities: MSMEs have opened opportunities for both foreign and local investors who are interested in contributing to sustainable businesses.
Read: Thinking of starting a new business? You need to understand these costs.
- Job Creation: SMEDAN says there are more than 37 million MSMEs in Nigeria offering over 59 million jobs. Many ‘white collar’ employees now have separate businesses which they refer to as ‘side hustle’ in order to create another stream of income while providing jobs for some other people.
With the yearly increase in national and Africa’s population as well as constant improvement in the performance of MSMEs, Africa is on its way to becoming a major player in the world’s economy in the future and we are here for it.
You should read: Does Your Hustle Pay? And Other Questions for Small Business Owners.
At Triift Africa, we understand that building a micro, small or medium business from the ground up is a daunting task and we help to make the journey better by providing the finance, knowledge and encouragement that you need. We can help your business thrive rather than just survive. Talk to us.
