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Report reveals Small Businesses in Nigeria have created over 59 million jobs

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Small Businesses in Nigeria

There appears to be a ray of hope for the citizens of Africa’s most populated country, Nigeria, as the latest report released by the National Bureau of Statistics (NBS) shows that the country’s Micro, Small and Medium Enterprises (MSMEs) have created 59.6 million jobs across the country.

According to the latest report, MSMEs generated 59.6 million jobs as of December 2017, with 5% or 2.8 million of those jobs created by Small and Medium Enterprises (SMEs).

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Similarly, it was revealed that a large majority of micro businesses are sole proprietorships. However, SMEs are more distributed with 65% sole proprietorship, private limited liability (21%), faith-based (6%), and 5% partnerships.

Booming Sectors: According to the report, the composition of sectors is different for each business type classification, primarily due to staff requirements of more formal establishments.

  • Education and Construction are the top five (5) for medium-scale enterprises.
  • Wholesale/Retail Trade, Agriculture, as well as other services and activities, make up 76.3% of Micro-enterprises.
  • Education, Manufacturing, and Wholesale/Retail Trade make up 68% of small enterprises in Nigeria.
  • Manufacturing, Wholesale/Retail Trade, and Human Health & Social Works make up 68% of medium enterprises.
  • Accommodation and Food services is a preferred sector (top 5) across all business classification types.

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Startup funding: The majority of micro-businesses started with less than N50,000 in initial startup costs. Only 4.7% started with more than N300,000.

  • Wholesale/Retail Trade, Transport & Storage, and Agriculture were the most capital intensive for micro-enterprises.
  • Similarly, 75% of SMEs had startup funding with less than N10 million capital, while 6% of MSMEs started with over N40 million in capital.

[READ ALSO: Why MSMEs lack funding despite growing number of lenders]

Majority of the enterprises – Micro and SMEs, personal saving was the most common source of capital. Nationally, only 49.5% of SMEs (that are sole proprietorships) reported having access to bank credit.

  • The NBS report shows that Personal Savings was the most common source of
    capital.
  • 61.2% of Medium Enterprises explored personal savings to raise funds, while 55.6% of SMEs do the same.
  • Only 17.5% of SMEs owners got loans, while 11.7% resorted to family as a source of capital.
  • 23.6% of Micro Enterprises source funds from families and cooperatives/Esusu.
  • For SMEs who had access to bank credit, commercial banks were the main source of
    these funds (91.9%), while 4.7% accessed credit from Micro-Finance Institutions, and
    1% from Development Institutions.
  • SMEs in Oyo, Jigawa, Lagos, Kano, and FCT reported having the most access to bank
    credit.

Low business registration: The report further reveals that 97.8% of microenterprises are not registered. Basically, NBS stated that these unregistered businesses are hard to track for development and policy planning, regulation, and revenue generation purposes.

To establish the Bureau’s claims, about 96.6% of Micro businesses are not insured while 63.9% SMEs are also not insured. To say the least, MSMEs in Nigeria are particularly vulnerable to business shocks, and lack of integration into financial markets increases risks.

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[READ ALSO: MSMEs to receive N100 billion support from DBN before the end of 2019]

Some critical downsides: Despite growth recorded in Nigeria’s MSMEs, NBS highlighted several factors affecting small businesses in the country.

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• High fuel prices, taxes, and power supply are the top unfavourable factors affecting micro-enterprises. These reflect a challenging operating environment for micro-enterprises and the importance of policies that mitigate these challenges.
• High electricity tariff, high taxes, and high interest rates are top unfavourable policies for SMEs. These reflect the challenges of formalization, including access to the financial markets, and the importance of financial market initiatives in mitigating these challenges for SMEs.

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Way forward: The Bureau proposed policy recommendations with the top on the list being a review of the system of classification of business.

NBS recommends that the large sub-sector of microenterprises can still be further broken down based on pro-establishment behaviour.
• An additional criterion of classifying small businesses by employment, assets and formal registration should be introduced.
• Policies aimed at both business types should not be generic or lumped together.

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[READ ALSO: Access Bank pledges ₦1Billion to promote SMEs in the health sector]

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Appointments

ExxonMobil Nigeria gets new Chairman and Managing Director

The disclosure was made in a statement by the Manager Media and Communications.

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Exxon to Divest oil fields in Nigeria, Domestic oil companies

Oil exploration and production giant, ExxonMobil, has announced the appointment of Richard Laing, as the new Chairman and Managing Director of its 3 affiliate firms in Nigeria with effect from August 1, 2020.

The disclosure was made in a statement by the Manager Media and Communications, ExxonMobil, Mr. Ogechukwu Udeagha, on Saturday, August 8, 2020, in Eket, Akwa Ibom State.

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The 3 affiliate oil firms of ExxonMobil include Mobil Producing Nigeria Unlimited, Esso Exploration and Production Nigeria Limited and Esso Exploration and Production Nigeria (Offshore East).

According to the statement from ExxonMobil, Richard Laing was appointed to replace Paul McGrath, who has been appointed Vice President, Global Projects for ExxonMobil in Houston after spending more than 3 years in Nigeria.

The statement from Ogechukwu Udeagha reads, “Prior to his appointment, Laing was executive director of oil and gas production and related support groups for all of the ExxonMobil affiliates in Nigeria.’’

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”Laing joined ExxonMobil in 1989 and has held variety of engineering, planning, safety and managerial positions in upstream and downstream operations while working in the U.K, Qatar, U.S. and Nigeria,” he added.

Udeagha said that Laing holds a bachelor’s degree in Mining and Petroleum Engineering from the University of Strathclyde, Glasgow and Master’s in Petroleum Engineering from Heriot-Watt University, Edinburgh.

In his reaction, Liang said; “It is a privilege to lead the ExxonMobil team in Nigeria and build on the work that Paul McGrath had done over the last three years.

“I look forward to the work that lies ahead and continuing the company’s outstanding relationships.”

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Coronavirus

Breaking: COVID-19: Buruji Kashamu is dead

Kashamu’s demise was announced by a former lawmaker-friend and party member on Twitter.

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Senator Buruji Kashamu has died on Saturday.

Buruji, who was a member of the 8th Senate, died of COVID-19 at the First Cardiology Consultants, Lagos.

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This was disclosed by Senator Ben Murray-Bruce via his Twitter handle.

Details soon …

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NUPENG gives reasons it directed petroleum tanker drivers to embark on strike in Lagos

NUPENG said its members are being consistently extorted, intimidated, harassed and victimized by different groups.

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The National leadership of the Nigerian Union of Petroleum and Natural Gas Workers (NUPENG) has disclosed the 3 major reasons why it directed Petroleum Tanker Drivers (PTD) to withdraw their services from Lagos.

NUPENG revealed that the 3 major challenges that were being faced by Petroleum Tanker Drivers include; Extortion of money from the petroleum tanker drivers by various security agents, the menace of containerized trucks at Apapa, Kirikiri and Beach Land axis of Lagos State and the harassment and extortion by area boys and area godfathers.

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This was contained in the press statement that was issued by NUPENG on Friday, August 7, 2020, and signed by its National President, Comrade Williams Akporeha, and its General Secretary, Comrade Olawale Afolabi.

While directing petroleum tanker drivers to withdraw its services, the national leadership of NUPENG said it cannot afford to fold its arms while its members are being consistently and continually extorted, intimidated, harassed and victimized by different groups and segments in Lagos.

On the extortion of money from Petroleum Tanker Drivers by various security agents; NUPENG said that it is really disturbing that security agents who are expected to ensure free-flow of traffic and protection of road users now use their uniforms and arms to intimidate, harass and extort money from Petroleum Tanker Drivers. The union pointed out that this reprehensible conduct by the security agents is taking serious tolls on the psychological, emotional and financial state of Petroleum Tanker Drivers and their capacity to effectively and efficiently deliver services to the nation.

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On the menace of Containerized Trucks at Apapa, Kirikiri and Beach Land axis of Lagos State and collusion of government officials hindering Petroleum Tankers from loading activities at depots and tank farms;

The union said that the persistent traffic gridlock and indiscriminate parking of containerized trucks on major Lagos roads and bridges leading to Apapa port, Kirikiri, Beach Land, Satellite Town, Ijegun, are another major setbacks bedevilling the smooth running of the operations of Petroleum Tanker Drivers in Lagos State.

NUPENG disclosed that as at today, MRS depot has been held captive for more than 3 months from discharging products to Petroleum Tanker Drivers despite heavy availability of Petroleum products stockpiled in their tank farm facilities.

They explained that for safety reasons, Petroleum Tanker Drivers cannot continue to struggle with these containerized trucks in these corridors considering the inflammable nature of the products their members carry and cannot afford to undermine safety standards, procedures and protocols in the course of rendering their services.

Some of the locations faced with this situation include Oshodi/Apapa Expressway, Ojuelegba Bridge, Iponri, Constain roads, Ikorodu road through Funsho Williams Avenue (formerly Western Avenue) to Ijora inward Apapa and Oshodi-Apapa Expressway through Mile 2 to Berger Yard inward Tincan Island. These locations have been overwhelmed with indiscriminate parking of these articulated vehicles, aggravating the gridlock faced by Petroleum Tanker Drivers that ply the roads daily to lift products.

On the harassment and extortion by Area Boys and Area god-fathers; The union said that it was really worried that Lagos State which is known to be a megacity and centre of excellence has now become a safe haven for area boys and area god-fathers who now see Petroleum Tanker Drivers as soft targets, extorting money from them on a daily basis, assaulting them and vandalizing their trucks in some instances, especially when some of the Tanker Drivers show restraints in paying them illegal fees and levies.

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They said that the Petroleum Tanker Drivers (PTD) now battle with both Area Boys and Area God-fathers amidst the deplorable state of the roads in Lagos State, and this is really causing PTD lots of havoc on a daily basis.

The union pointed out that a distance of just about 10 kilometres, now takes 7 to 8 hours of manoeuvres by petrol tankers, many of which break down in the process, upturning their contents, killing PTD members and endangering the lives of several other Nigerians who traverse the roads.

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They revealed that Tanker Drivers whose activities cut across Oguntedo, old Ojo road, Ijegun-Egba, Abule Ado and its environs in Satellite town, Oriade Local government Area, and Apapa corridor of Lagos state have continued to work in fears, following incessant attacks by members of various notorious groups who have developed a penchant for extorting money forcefully from Tanker Drivers.

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They are known for operating unchallenged and freely around Apapa, Kirikiri, Mile 2, Maza-Maza and Abule-Ado, near Trade Fair flank and so on.

NUPENG said that they decided to embark on the indefinite strike after consultations with the different leadership organs of the union and stakeholders in the oil and gas industry.

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