The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has said it is partnering with the Nigeria Postal Service (NIPOST) to bring down the cost of logistics for SMEs in the country.
The Director General of SMEDAN, Mr. Charles Odii, disclosed this via a post on his X handle after a meeting with the Postmaster General and CEO of NIPOST, Mrs. Tola Odeyemi.
According to Odii, the cost of logistics has been a major challenge for many SMEs in Nigeria as the costs of goods delivery, in some cases, are higher than the costs of the goods. He said this informed the meeting with NIPOST to solve the problem.
While the details of the collaboration and how the SMEs will partake in it are yet to be released, the SMEDAN DG said he would announce “the outcome of this partnership in the coming days, which will benefit small businesses.”
SMEs logistics challenge
Emphasizing the need to bring down the cost of delivery for businesses in Nigeria, the SMEDAN DG noted that the logistics problem has been affecting trading volumes in the SME industry.
“Our interactions with small businesses across various platforms, including town halls and cooperative meetings, have consistently identified logistics as a major bottleneck hindering trade volumes and profit.
“In some cases, the cost of delivery exceeds the price of the goods, discouraging consumers and limiting the growth potential of these businesses.
“To tackle this challenge, I met today with Tola Odeyemi the Postmaster General and CEO of NIPOST, to discuss how we can leverage the organization’s extensive reach and infrastructure, including in rural areas, to provide small businesses with an affordable, efficient, and reliable logistics solution.
“Encouragingly, we share a common understanding of the critical role logistics plays in driving inclusive economic growth and prosperity, both as an employment generator and trade enabler,” he said.
Odii added that both parties agreed to collaboratively address trust-related issues and offer small businesses nationwide a compelling solution through a partnership that will expand their sales reach, ensure customer satisfaction, and increase their revenue potential.
What you should know
According to a 2017 study by the National Bureau of Statistics, there were 41.5 million MSMEs in Nigeria employing almost sixty million people. These businesses constitute around 46.31% of GDP and about 96% of total businesses in Nigeria.
However, the SMEDAN DG recently disclosed that about three million SMEs were lost to several challenges including flooding in the last few years. He, however, said the Agency was working on different initiatives to drive sustainability in the Nigerian SME industry.