- Over 39 million MSMEs contribute 46.31% to GDP and represent 96.7% of businesses.
- Policies, finance access, infrastructure, and security influence the business environment.
- Collaboration stimulates economic growth, job creation, and innovation.
Nigeria is home to over 200 million people, with a lot of businesses all over the country. According to a 2022 report released by the Small and Medium Enterprises Development Agency (SMEDAN) and the National Bureau of Statistics (NBS), there were about 39,654,385 Micro, Small, and Medium Enterprises (MSMEs) as of 2020 in the country.
They also contribute 46.31% to the GDP and represent 96.7% of businesses in the country. These figures show how business-oriented the average Nigerian is.
A business environment refers to the economic and social variables that influence how businesses operate and make choices. A favourable business environment provides possibilities or offers opportunities for a business to grow.
The environmental factors could be social and physical factors, among others. Across the world, the government plays a major role in the way businesses operate.
The government, aside from providing infrastructure, performing functions enshrined in the constitution, and performing duties within its powers, also plays a crucial role in steering the economic prosperity of a country. In events like this, the relationship between the government and businesses could be beneficial or hostile.
In the event of any, the actions of both parties could be responsible. In an economy like Nigeria, where businesses are created by individuals, one would ask if the government can create a business environment for a business owner to thrive.
Government Policies and Financial Support
One of the many ways the government can create a business environment is through its policies. The policies of the government could be on different things. One of these is tax reform.
The government, through tax policies, can create a business environment; a favourable tax policy or tax incentives will lead to businesses coming up. Another policy is regulatory policy; a government can create a policy that will either lead to more businesses coming up or stifle the growth of the existing ones.
Through the relevant agencies and favourable policies, the government can create a business environment.
For a business to thrive, finance is one of the most important factors. Although the government sometimes does not create businesses, its’ involvement in such businesses is often needed.
Through access to funding through grants, loans, and other types of financial support, the government can create a business environment. With this, a business owner can establish a different chain of businesses or expand the current one he’s operating.
In addition, most businesses will thrive and survive when there’s the right infrastructure. Different types of businesses in the country need the movement of their goods or services from one place to another.
Infrastructure, security, and legal protection
When the government provides infrastructure like roads, bridges, and ports to support logistics and supply chains, the ease of doing business has been established, and a business environment has been created.
The government and its institutions are products of political participation and the electioneering process. The government must protect its citizens and ensure the security of their lives and properties.
This, by extension, applies to businesses. A business cannot survive in an environment that is not void of political instability, insecurity, and social unrest. In Nigeria, recent social unrest is a testament to how businesses suffer.
When there’s security, the customers of a business are safe and can go out to perform business transactions. Also, the business owners can make themselves available for business to continue.
The legal aspect is often not talked about when business discussions are made in the country. A lot of businesses in the country are innovative and new; they can only survive in the right environment where there’s protection for their intellectual property.
With the government providing an enabling environment for innovations to be patented and protected, many businesses will survive and thrive.
The way forward
Through public-private partnerships, the government and the private sector can work together to stimulate economic growth. With the right environment, a lot of businesses are created and protected, offering lots of jobs to the citizens.
This does not only reduce the unemployment levels in a country, which is detrimental; it also stimulates economic growth and leads to economic prosperity.
The government can only create, support, and promote an enabling business environment and is not necessarily tasked with the duty to ensure a business grows. It’s up to the business owner to thrive.
The government can only create a platform; the business owner has to take advantage of the opportunity to create and build a successful business.