For a long time, economic experts around the world have been reiterating the need for countries to harness the potentials locked in the SMEs sector towards boosting the GDP. GTBank‘s recent partnership with the Development Bank of Nigeria further underscores just how important this is.
Here at Nairametrics, we understand the importance of the SMEs sector to the Nigerian economy. That is why this article will be illustrating how adequate and well-monitored investment in SMEs can facilitate sustainable economic development, whilst ultimately uplifting millions out of abject poverty.
Findings have shown that small and medium scale enterprises are the bedrock on which any economy can survive/thrive. As a matter of fact, most developed nations are successful today because of the foundations laid by their SMEs. It is, therefore, important for under-developed and developing countries such as Nigeria to learn from this.
Today (May 29th), newly-elected government officials are going to be inaugurated across Nigeria. One of their main functions, as policymakers, should be to design and implement special fiscal and support measures that should help SMEs to thrive. Note that this assistance should be targeted at not only sustaining domestic SMEs activities but also at encouraging small Nigerian businesses to position themselves for international exploits.
Why this is important: Let’s face it; it’s been close to 60 years since Nigeria gained independence from Britain, and up till now it still remains classified as a “developing nation”. The development process is taking too long, especially when you consider the fact that we have virtually all the natural resources, human resources, and numerous other opportunities that could fast-track our development. What we need at this point are the right Government policies, well designed and implemented for the sake of our development.
What is Achievable: There is no denying what can be achieved if the right support is given to Nigerian Small and Medium Enterprises. The potential in the SMEs space is apparent. And with the right Government support, a lot can be achieved. Indeed, investing in SMEs is a holistic approach to proffering solution to Nigeria’s economic woes.
The Reality: While the Government can truly not provide employment for all, SMEs can achieve just that. Already, the sector is trying by employing thousands of Nigerians and helping to curb unemployment. Imagine what would happen if small businesses are given the opportunity to grow and they end up becoming major businesses in ten to fifteen years.
How SMEs can boost the economy: In a journal published by the Edinburgh Group (EG), the influence of SMEs has been highlighted to play a significant role in the structural well-being of their host communities and nations.
We have seen countries such as the USA, France, Germany, and China where SMEs surge is contributing to the increment of available jobs, technically reducing unemployment, and preparing grounds for a robust economy. When there are more hands in production, the GDP gets pushed up.
As part of the EG’s mission to ensure that the international accountancy profession meets the needs of its diverse stakeholders, it published a financial and data analysis journal to address the theme: Growing the Global Economy through SMEs. In the publication, among other strategies endorsed include:
- Factorization of measures to support SMEs finance
- Allocation of significant budget to working capital support
- Facilitation of easy access to bank lending -France and South Korea as case studies
- Re-visitation and review of tax policy
- Reduction of social security charges
- Investment in infrastructure
Recommendations for policymakers
In addition to strategies check-marked by the authors of the journal, below are recommendations for policymakers to consider:
- Identify any additional information and support mechanisms that can be targeted toward SMEs to encourage their involvement in fast-growing economies.
- Look for opportunities to reduce unnecessary red tape and regulations concerning international trade and investment.
- Create clear signposting to help SMEs identify and access the full range of financial support available for international activity.
- Assess whether additional targeted tax breaks could encourage SMEs internationalisation, particularly in the aftermath of the global financial crisis when recovery is proving slow in many economies.
Bus fare paid by Nigerian commuters increased by 68.8% in October 2020
The average fare paid by Nigerian commuters for a bus journey intra-city spiked by 68.82% from N190.86 recorded in October 2019 to N322.22 in October 2020
The average fare paid by Nigerian commuters for bus journey within the city spiked by 68.82% year-on-year from N190.86 recorded in October 2019 to N322.22 in October 2020. This was contained in the transport fare watch report, released by the National Bureau of Statistics (NBS).
The Transport fare watch report for the month of October 2020 covered the following categories namely: bus journey within the city per drop constant route; bus journey intercity, state route, charge per person; air fare charge for specified routes single journey; journey by motorcycle (Okada) per drop; and waterway passenger transport.
According to the report, the average fare paid by Nigerians for a bus journey within a city also increased by 4.03% when compared to N309.73 recorded in September 2020. Meanwhile, States with the highest bus journey fare within the city were Zamfara (N585.34), Bauchi (N504.78), and Cross River (N431.04); while States with the lowest bus journey fare within the city were Abia (N192.11), Kebbi (N205.47), and Borno (N208.15).
- Average fare paid by commuters for bus journey intercity increased by 9.25% to N2,209.84 as against N2,022.7 recorded in September 2020, while it increased by 35% compared to N1,636.86 recorded in the corresponding month of 2019.
- States with the highest bus journey fare intercity were Abuja FCT (N4,376.09), Lagos (N3,073.41), and Sokoto (N3,055.12); while States with the lowest bus journey fare intercity were Bayelsa (N1,473.67), Enugu (N1,560.00), and Bauchi (N1,560.49).
- Average fare paid by commuters for journey by motorcycle per drop increased by 3.88% month-on-month and by 115.50% year-on-year to stand at N265.41 in October 2020 from N255.51 and N123.16 respectively.
- States with the highest journey fare for motorcycle per drop were Niger (N1,476.40), Kogi (N372.45), and Rivers (N352.47); while states with the lowest journey fare for motorcycle per drop were Adamawa (N78.49), Katsina (N106.20), and Kebbi (N135.75).
- In terms of air travel, the average fare paid by passengers for specified routes single journey decreased by -1.70% when compared to N36,884.59 recorded in September 2020. It however increased by 18.42% (year-on-year) to stand at N36,256.08 as against N30,615.43 recorded in October 2019.
- States with the highest air fare were Anambra (N38,500.00), Cross River (N38,460.00), Jigawa (N38,250.00); while States with the lowest air fare were Akwa Ibom (N32,750.00), Sokoto (N33,250.00), and Gombe (N34,800.00).
What you should know
Nairametrics reported in October that the average fare paid by commuters for a journey by motorcycle per drop, more than doubled in September 2020 when compared to the corresponding month in 2019, increasing by 111.11% to stand at N255.51 in the month.
The persistent increase in the prices of transport fares across the country is a resultant effect of the Covid-19 pandemic, which necessitated drivers and transporters to reduce the number of commuters they carry at a time.
This is in line with the health measures implemented by the Federal government to help curb the spread of the corona virus in the country.
Explore Data on the Nairametrics Research Website
PIB and Electoral Amendment Bill pass second reading in House of Reps
The Petroleum Industry Bill (PIB) and the Electoral Act Amendment Bill has passed second reading in the House of Representatives.
This was disclosed by Channels TV on Tuesday after both bills were addressed by Lawmakers for the second time during plenary.
On the Petroleum Industry Bill
Rep leader, Alhassan Doguwa, said the PIB has been in the pipeline since the firth assembly and hopes the 9th Assembly would be able to pass the bill.
Chairman of the House Committee on Upstream Petroleum, Musa Adar, stated that Nigeria needs the PIB, as it does not have the luxury to be irresponsible with resources. Citing the effects of the pandemic on the economy, he added that Nigeria’s needs a mature oil industry that will maximize productivity and compete with other crude oil and gas exporting nations in the continent.
Minority Leader, Ndudi Elumelu, said the PIB is a necessity, as the world is going green and Nigeria needs to maximize its oil and gas sector, and also explore other options.
“The world is looking to go green in less than 20 years and it makes it pertinent for Nigeria to gain maximally from the oil sector and look to explore other oil products before petroleum goes obsolete as a commodity,” he said.
(READ MORE: The new PIB may scrap DPR, PPRA, others)
On the Electoral Act Amendment Bill
The purpose of the Bill is to regulate the Electoral process across Federal and Local government levels, in order to give it more transparency.
The bill was sponsored by Rep. Aishatu Dukku (APC-Gombe). She added that the bill is necessary to fix Nigeria’s flawed electoral system.
“This amendment has become necessary because of the flaws observed in our electoral system. It’s no longer news that our electoral experiences since 1999 show a strong correlation between an efficient and effective electoral legal framework and the conduct of free, fair, and credible elections.
“In fact, amendments of our electoral laws were long identified as priority legislation by the National Assembly, because of the need to consolidate on the gains of our democratic achievements and to also address the lacuna identified in the electoral legal framework.
“A typical example is the case of the Kogi Governorship election in 2016, where a leading candidate died after the commencement of polls, but before the declaration of results.
“In addition to this are concerns that the legal framework on certain issues should be well settled ahead of the 2023 elections, such as the use of technological devices like the card reader and electronic voting system.
“Also, criteria for substitution of candidates, disclosure of the source of funds contributed to political parties, replacement of lost or destroyed permanent voters card, the penalty for the possession of fake voters’ card, dates for conducting primary elections, shall not be earlier than 150 days and not later than 120 days before the date of the election, etc.
“The bill, therefore, seeks to address many loopholes in our electoral system by way of amending over 300 clauses (including new provisions) of the Electoral Act 2010,” she said.
What you should know
Nairametrics reported last week that the Minister of State for Petroleum Resources, Timipreye Sylva said the Petroleum Industry Bill (PIB) may be passed into law by the first quarter of 2021.
“There is no better way of diversifying the country’s economy than through a well-developed oil and gas industry, particularly with the huge gas resources in Nigeria. So, PIB will be the most credible attempt towards a holistic diversification of the Nigerian economy,” he added.
House of Representative Speaker, Femi Gbajabiamila, also disclosed that the House would ensure that it passes the Petroleum Industry Bill within the next six months or probably less.
Budget proposal review of MDAs is a legislative right – Femi Gbajabiamila
Gbajabiamila has stated that the budget review on MDAs conducted by the House of Assembly is a right of the National Assembly.
The Speaker of the House of Representatives, Femi Gbajabiamila, stated that the budget review on MDAs conducted by the House of Assembly is a right of the National Assembly. He added that the House of Assembly has the constitutional right to ask questions on MDA budgets.