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Businesses boom as South-West States rank top on SMEs in Nigeria

The latest report released by the National Bureau of Statistics (NBS) has revealed that three South-Western States in Nigeria have the highest number of Small and Medium Enterprises (SMEs) in the country.

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The latest report released by the National Bureau of Statistics (NBS) has revealed that three South-Western States in Nigeria have the highest number of Small and Medium Enterprises (SMEs) in the country.

According to SMEs national survey conducted by the NBS, Lagos, Osun, and Oyo are the top states with the highest number of SMEs.

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Some Breakdown: The NBS report shows that the total number of enterprises in Nigeria was estimated at 41.5 million, spread out across the 36 states in the country. The breakdown further shows that while microenterprises constitute a high 99.8% (41.4 million) of total SMEs, Small businesses make 71,228 (0.17%), even as medium enterprises comprise just 1,793 enterprises in the county.

  • As expected, Nigeria’s commercial hub, Lagos, recorded the highest with a total of 8,395 or 11.5% of total SMEs in the country, followed by Oyo (6,131 or 8.4%) and Osun 3,007 or 4.1%). 
  • On the other hand, states with the fewest SMEs in Nigeria as of 2017 are Yobe, Bayelsa, and Borno.
  • Specifically, Borno has 538 (0.7%) SMEs, Bayelsa recorded 300 (0.4%) while Borno has only 102 (0.7%) SMEs in the state.

[READ: Report reveals Small Businesses in Nigeria have created over 59 million jobs]

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Best Performing State: Three States in South Western Nigeria may have recorded the highest number of SMEs in Nigeria, but in terms of growth states in northern Nigeria recorded the highest growth in the number of SMEs.

According to the NBS report, Kwara, Nasarawa, and Jigawa witnessed the highest growth across all states in Nigeria. SMEs in Kwara state grew by 526.5%, Nasarawa state (132.5%), and Jigawa (116%).

On the other hand, the biggest decline in the number of SMEs was recorded in Kano, Rivers, and Plateau. Specifically, Kano had the biggest decline of 70%, followed by Rivers (45.1%) and Plateau (27.8%).

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Key Growth Trends: According to the NBS report, microenterprises, comprise 99% of MSMEs drives the growth trend.
Compared with 2013, both total MSMEs and microenterprises grew by 12.1%
Small enterprises grew by 4.6% for the period under review
• Also, the number of medium-sized enterprises decreased significantly from 4,670 in 2013 to 1,793 in 2017. This means medium-sized enterprises dropped by 61%. 

[READ: Stakeholder explains why FG should come up with MSME development plan]

Sectors dominated by SMEs: According to the report, the composition of sectors is different for each business type classification, as Education and Construction top five (5) for medium-scale enterprises.

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  • 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.

Small Businesses in Nigeria

Skills shortage: The NBS revealed that some sectors that require specialized skills and technical know-how suffer from a high skills shortage.

  • Micro enterprises find the highest skills shortage in sectors that are consumer-facing, with the exception of Manufacturing which also requires specialized skills
  • Accommodation & Food Services are both severely short skilled for both business classifications.
  • There’s a widespread lack of capital and poor integration into the financial markets, which may be due to low business planning incidence and low formalization.
  • Most enterprises are operating without legal & financial protection.
  • Meanwhile, it was stated that the lack of planning in MSME contributes to a high rate of failure as well as reluctance from investors in providing capital.

Upshots: The NBS report ranks Lagos state with the highest number of SMEs in Nigeria, and this is largely expected as the recent report on ease of doing business released by the World Bank shows that Lagos ranks top in ease of starting a business. This also explains why foreign investors prefer to invest in the state.

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Meanwhile, other states Osun and Oyo which recorded some of the highest numbers of SMEs, give a ray of hope that growth in small businesses is not skewed.

Lastly, States like Kwara, Nasarawa and Jigawa recorded the highest growth in SMEs. Note that Kwara State, for instance, receives the lowest monthly federal revenue allocation. Hence, the boost in SMEs indicates that the economies of these states may soon begin to improve.

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[ALSO READ: Lagos and Abuja remain top destinations for Foreign Investment in Nigeria]

Patricia

Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

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Coronavirus

Former Liberian President to sit on WHO review panel of COVID-19 response effort

Ellen Sirleaf has been picked alongside Helen Clark, to serve as co-chairs of the independent panel.

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Former Liberian President to sit on WHO review panel of Covid-19 response effort

Following stern criticism by US President, Donald Trump, over their handling of the COVID-19 response efforts, the World Health Organization (WHO) has announced it will implement an independent panel to review said response efforts to the pandemic.

To this end, Liberia’s former President and West Africa’s first female President, Ellen Johnson Sirleaf, has been picked alongside former Prime Minister of New Zealand, Helen Clark, to serve as co-chairs of the independent panel. They will be responsible for selecting the other members of the panel, according to the WHO.

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WHO’s Director-General, Tedros Adhanom, announced the panel will produce an interim report in a November meeting of global health ministers. Meanwhile, the substantive report would be produced by May 2021.

Tedros also said that the size of the pandemic calls for the need for a “commensurate evaluation, an honest evaluation”, adding that the WHO would be very serious with the preparation of the report.

READ MORE:COVID-19: WHO warns worst is yet to come as firm charges $2,340 for virus treatment

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The WHO members in May agreed to an independent review of the organization’s response to the pandemic. Ellen Johnson Sirleaf said the review of the body’s response would be challenging but looks forward to her role in doing what she can contribute to the response of the pandemic’s challenges.

The panel will also report monthly updates on the body’s response and will not only review the WHO’s response but also the International community’s response. Tedros added that it’s time for an honest reflection on the global response, saying a response will help with lessons on the pandemic.

 

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Economy & Politics

Presidency dismisses allegation of Osinbajo receiving N4 billion from recovered loots

The accusation was described to be an obvious campaign of lies and calumny.

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Twitter deactivate Yemi Osinbajo's Twitter account, How Nigeria's LPG sector can create 2 million jobs -Osinbajo, budget support, NEC okays $250 million investment in NSIA , MSMEClinic gets 200,000 capacity yam storage facility in Benue, Accusations of Yemi Osinbajo receiving N4 Billion from recovered loots are baseless- Presidency

The office of the Vice President has reacted to a series of tweets accusing Professor Yemi Osinbajo of instructing the embattled acting Chairman of the EFCC, Ibrahim Magu, to release the sum of N4 billion out of N39 billion that was recovered from alleged looters. 

These allegations have been described as “false and baseless”. 

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READ ALSO: UPDATE: President Buhari appoints Prof. Gambari as new Chief of Staff

A statement that was signed by the Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, said, with all emphasis at our disposal, let it be firmly stated that these are totally false and baseless fabrications purposing to reflect goings-on at the probe panel investigating Mr Ibrahim Magu”. 

Ibrahim Magu was relieved of his duties this week, after a probe was conducted on his activities as Acting Chairman of the nation’s anti-graft agency. He has since been replaced with Mohammed Umar. 

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READ MORE: Just In: DSS invites EFCC’s Acting Chairman, Ibrahim Magu for questioning)

Meanwhile, the statement by the Presidency also complained about the recent rise in people being paid to “peddle blatant falsehoods” against the Vice President and says Mr Osinbajo “will not be distracted by these obvious campaigns of lies and calumny”. 

The statement added that the online publications “being criminally defamatory in nature”  have been referred to law enforcement agencies for investigation. 

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Explore economic research data from Nairametrics on Nairalytics

 

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Financial Services

Stanbic IBTC observes closed period, as directors set to consider H1 results

The directors will also consider a proposal to pay an interim dividend to shareholders.

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Stanbic IBTC

Stanbic IBTC Holdings Plc announced earlier today that its board of directors will meet on Wednesday, July 29, as part of preparations towards the release of the company’s consolidated and separate audited financial statements for half-year 2020. The directors will also consider a proposal to pay the company’s shareholders an interim dividend.

A statement issued by the Stanbic IBTC to the Nigerian Stock Exchange (NSE) noted that the scheduled board meeting is in tandem with guidelines contained in section 1.2 of the NSE’s rules book.

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In the meantime, the bank Hold-Co has already commenced observing its closed period ahead of the release of the half-year financial statements. Specifically, Stanbic IBTC began observing its closed period on June 1st, 2020, the implication being that all insiders and their relatives have been prohibited from trading the company’s shares for more than one month now.

Explore economic research data from Nairametrics on Nairalytics

Note that the Stanbic IBTC’s closed period will continue until the half-year financial statements are released. Part of the statement which was signed by Chidi Okezie (Company Secretary), said:

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“In accordance with the provisions of Section 1.2 of the Rules of The Nigerian Stock Exchange (The NSE) relating to Board Meetings and General Meetings of Issuers, we would like to notify The NSE and our Shareholders, that a meeting of the Board of Directors of Stanbic IBTC Holdings PLC (the Company) is scheduled to hold on Wednesday 29 July 2020 at 1:00 pm. The meeting will discuss amongst other items, the Company’s Consolidated and Separate Audited Financial Statements for the Half-year ended 30 June 2020 as well as a proposed interim dividend.

READ ALSO: COVID-19: NSE extends time for submission of audited financial statements

“In view of the above, the closed period for the release of half-year results, which commenced on Monday, 01 June 2020 will continue to be in effect until the release of the Company’s Half-year audited financial statements.”

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Recall that the last earnings report that was released by Stanbic IBTC Holdings Plc was for Q1 2020. The unaudited report showed that gross earnings stood at N61.4 billion as against N58.7 billion in Q1 2019, even though interest income for the period declined by 12% year on year to N27.5 billion. Meanwhile, profit for the period stood at N20.6 billion, an increase when compared to N19.2 billion in Q1 2019.

Stanbic IBTC Holdings’ share price closed at N30.25 at the end of today’s trading session on the Nigerian Stock Exchange. Year to date, the stock has declined by nearly -20%.

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