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Business

African leaders should support MSMEs for rapid recovery of economies – Report

African leaders would help speed up the recovery process in most African economies if they can continue to support the MSMEs.

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Development Bank of Nigeria , Companies Allied Matters Act (CAMA)

African leaders have been enjoined to promote and support policies that would strategically support the Micro, Small and Medium-sized Enterprises (MSMEs) and speed up the recovery process in most African nations.

This was stated in the Foresight Africa 2021 report, a publication of African Growth Initiatives of the Brookings Institution, a non-profit organization devoted to independent research and policy solutions.

According to the report:

  • “Policymakers must continue to support businesses—both smaller enterprises and larger firms—that have been disrupted by the crisis.
  • “Arguably, the greatest priority must be to bolster the micro-, small-, and medium-sized enterprises (MSMEs) that are key to African commerce and account for 83 percent of private-sector employment in Africa.
  • “Such businesses, which number between 85 million to 95 million, are especially vulnerable to COVID-19 mitigation measures given they are often characterized by person-to-person contact. By just May 2020, 75 percent saw their revenue decline by over 30 percent.
  • Finance will continue to be one of the greatest needs for African businesses; indeed, only 5 percent of MSMEs across the continent feel they have received adequate support from lenders. Provided governments navigate Africa’s fiscal challenges with skill and determination, they can continue offering suitable financial support to small enterprises; in addition to indirect support through value chains and banks, such assistance might include loans, debt forgiveness, low-interest rates, assistance with payments to suppliers, and reduction in utility costs.”

 Ways Governments can provide financial support to MSMEs

  • There are several steps that governments can take to provide financial support to MSMEs. One option is to assist MSMEs through larger firms in their value chains, which might include upstream suppliers and downstream buyers.
  • “Governments can provide easier liquidity and working-capital terms to these larger players, and they can make such support conditional upon these firms’ providing favourable financial terms to MSMEs.
  • “Governments can also consider providing risk guarantees or first-loss mechanisms while requiring banks to on-lend under the chosen set of criteria and guidelines in order to encourage banks to lend to MSMEs.
  • “Policymakers must not lose sight of the region’s informal sector, as 84 percent of African MSMEs are unregistered. Policymakers can take advantage of the opportunity created by the crisis to convince larger numbers of informal enterprises to register, and thus gain better access to finance and markets. Moreover, to promote registration, governments could shape bold campaigns and attractive packages, potentially including multi-year tax holidays and capacity building for MSMEs.”

Why this matters

  • Micro, Small and Medium-sized Enterprises (MSMEs) are widely recognized for the important contributions they make to sustainable development, in terms of contributions to economic growth, creation of jobs, provision of public goods and services, as well as poverty alleviation and reduced inequality.
  • The pandemic has seriously impacted the MSMEs in all African nations as it has exacerbated economic hardship and may have pushed more than 40 million Africans into extreme poverty.
  • It is imperative that the African leaders focus on enabling businesses to respond effectively to these new and unfavourable conditions to which most MSMEs have been exposed to.

Johnson is a risk management professional and banker with unbridled passion for research and writing. He graduated top of the class with B.sc Statistics from the University of Nigeria and an MBA degree with specialization in Finance from Ambrose Alli University Ekpoma, with fellowships from the Association of Enterprise Risk management Professionals(FERP) and Institute of Credit and Collections management of Nigeria (FICCM). He is currently pursuing his PhD in Risk management in one of the top-rated universities in the UK.

1 Comment

1 Comment

  1. Adenle m.a.

    February 7, 2021 at 3:54 am

    You just introduce yourself and your accolades what is your mission

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Business

 Onitsha River Port set to receive 1000 containers from Lagos next week

The National Inland Water Ways Authority says1000 containers from Lagos will arrive Onitsha river port.

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 Onitsha River Port Set To Receive 1000 Containers from Lagos Next Week

The National Inland Water Ways Authority has made public its intention to move 1000 containers from Lagos to Onitsha river port.

The statement was made on Thursday by Jibril Dardau the NIWA general manager of Corporate Affairs.

Mr. Jibril Dardau was speaking of the backdrop of an earlier statement made by the executive director of NIWA Mr. George Moughalu. Mr. George Moughalu said the agency is targeting about 1,000 containers to be hauled per trip from Lagos ports to Onitsha River Port within the maximum duration of 4 days.

Moghalu added that NIWA is engaging the Nigeria Ports Authority (NPA) and other stakeholders to facilitate the commencement of the cargo haulage.

NIWA in an official statement articulated the practical modalities involved in the new initiative. It also mentioned the third party companies it would work it during the operation.

“The idea of hauling containers via Burutu Ports to Onitsha River Port is to deliberately avoid the two small bridges of Gbarekolo and Bumandi,

“Because the two bridges are too tiny and shallow for sea moving badges or vessels to ply through, that is why the company (ACTL) is considering the route from Lagos ports to Burutu Port then to Onitsha River Port as the final destination,” the statement added.

What to know

  • The Recent initiative by the National Inland Waterways Authority is aimed at reducing the gridlock at the Sea Ports in Lagos.
  • The Nigerian Government has been accused of intentionally marginalizing the Southeast region by neglecting their Maritime sector.

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Business

Sanwo-Olu commissions 1.4km Pen Cinema, Agege flyover

Governor Sanwo-Olu has commissioned the 1.4km Dual Carriageway Flyover Bridge in Pen Cinema Junction, Agege.

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The Lagos State Governor, Babajide Sanwo-Olu, on Friday officially commissioned the 1.4km Dual Carriageway Flyover Bridge in Pen Cinema Junction, Agege.

This is part of the effort by the state government to reduce the gridlock and improve the traffic situation on that axis.

During the commissioning of the project, Sanwo-Olu said that the flyover would reduce travel time and save man-hour that would have been otherwise lost to traffic on the road.

According to a report from the News Agency of Nigeria (NAN), the Governor said it would provide a better riding surface, leading to reduced maintenance cost; boost interconnectivity and generally make life more meaningful to commuters in the state.

What the Lagos State Governor is saying

Sanwo-Olu said, ”One of the most critical challenges being experienced on a daily basis by residents/road users along the Agege Pen Cinema area over the years is the heavy traffic volume occasioned by the geometric increase in traffic.

Residents and road users along this area have clamoured for a solution to the suffocating nature of the perennial traffic gridlock occasioned by the huge human and vehicular traffic, flowing through this intersection.

”To address the challenge of this huge traffic burden, our administration decided to continue with the construction of a Precast and Pre-stressed Reinforced Concrete Dual-carriage Flyover and Ramp, with road works, across the Agege Pen Cinema Intersection which was then at about 20 per cent completion.

”This is in line with the first pillar of the T.H.E.M.E.S Agenda which targets the provision of roads as a critical infrastructure that will support economic activities.

“It will also enable commercial interactions and ensure ease of commuting from one part of the state to another through the elimination of traffic gridlocks,” he said.

While speaking at the occasion, the Special Adviser to the Governor on Works and Infrastructure, Mrs Aramide Adeyoye, said that the project in its entirety consisted of a dual carriageway 1.4km Flyover Bridge component with two lanes of 3.65m width each in either direction with ramps, including the rehabilitation of five adjoining roads.

She said that the construction of a flyover across the Pen-Cinema intersection in addition to the spur linking old Abeokuta road which was conceived in September 2017, was seen as the solution to the transport/traffic problem on that axis.

What you should know

  • The Agege Pen-Cinema Flyover project was started by the immediate past administration of the former Governor Akinwunmi Ambode in December 2017.
  • The project is expected to crisscross Oba Ogunji Road and Pen Cinema area and over the railroad, terminating at the Agunbiade Street or Oke-Koto area of the Agege community. The bridge also extends to the old Abeokuta highway into Abule Egba.
  • The flyover which was conceived to solve the perennial traffic on that axis has a total length of approximately 1.4 Kilometres and it is designed to have streetlight facilities and pedestrian walkways.

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