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Nigeria system strangulates MSMEs- Peter Obi

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Nigeria system strangulates MSMEs- Peter Obi

Former presidential candidate of the Labour Party, Peter Obi, has decried that Ngeria’s system was responsible for the death of Micro Small and Medium Enterprises through wrong policies.

 

Obi said unlike other first world and third world countries which support growth of MSMEs through finance and policies, Nigeria’s system through taxation and other negative policies ruin the growth of small and Medium Enterprises.

 

He said high taxation, unavailability of finance, and when available at high cost, energy cost, policies, poor infrastructure and insecurity are against the growth of MSMEs in the country. He added that inflation and poverty have also reduced demand.

 

The Labour Party chieftain said this on Thursday, June 27, while marking the International Day of Micro Small and Medium Enterprises.

 

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Obi said Nigeria like other economies could be ablt to generate 60% of its GDP through the MSMEs.

 

He said, ” the world commemorates the greatest engine of economic growth – Micro, Small, and Medium enterprises, MSMEs. In all the nations of the world, from the 1st to the third world, MSMEs remain the greatest contributor to their GDP and employment.

 

“They contribute in different ways to the growth and development of so many countries, especially in the exemplary countries of reference: China, India, and Indonesia, to mention a few, which are large in population and can be comparable to Nigeria.

 

“It is their small businesses and their support for small businesses that are propelling their growth. For example, in China, MSMEs contribute over 60% of their country’s GDP, about 60% of their export products, over 70% of technological innovation, 80% of urban employment, and 50% of tax revenue. In Indonesia, the SME sector contributes over 60% to their GDP constitutes about 90% of business units, and creates over 90% of their employment.

 

“In India, which is almost becoming the world’s innovation and technology powerhouse, the SME sector has become the backbone of innovation and the start-up ecosystems. It has become a vital supply chain by providing cost-effective and timely services to large corporations globally.

 

“In all the above countries, well articulated consistent policies designed to ensure the effective operation of MSMEs are put in place and in some cases ensure access to seamless finance as exemplified by countries like China.

 

“In Nigeria, while they contribute similarly, in terms of GDP and jobs creation, and remain the most critical tool for pulling millions of people out of poverty, they have not been given similar attention as other countries referenced above, rather the system has become agents of crippling them through badly articulated and inconsistent policies, multiple taxations, strangulation regulatory framework, inadequate access to finance and, when available, financing comes at a high cost.

 

“Add to these high energy costs, poor infrastructure and high level of insecurity. High rates of poverty and inflation which are now affecting demand are all weighing down on the SMEs.”

 

The former governor of Anambra State called on government to prioritize investment, attention and support critical areas of growth and development.

 

“This day, therefore, reminds us of the need to prioritize investment, attention, and support to this critical area of growth and development. By paying attention to the critical contributors to our economic growth, as done in other referenced countries above,” he said.