Small and Medium Size Enterprises Get A Look In
 10th OCT 2006

The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has embarked on a study designed to explore the potentials of the informal sector, which is believed to engage over 80 per cent of the entire population.

The study also seeks to redefine and re-classify the sector as well as provide road map to formalize the sector and integrate it into the mainstream economy. A draft report of the study conducted by Resman Associates Limited was presented in Abuja recently to enable stakeholders make their inputs before the final document is made public.

The exercise, which was sponsored by the United Nations Development Programme (UNDP) and executed by SMEDAN is expected to achieve the certain objectives, including the provision of a policy and legal framework for government and private sector interventions; enable government and private sector to fully exploit the potentials of the informal sector's contributions to employment, poverty reduction and economic growth as well as examine and make recommendations for the value additions in the supply chain.
At the presentation of the draft report, SMEDAN Director-General, Mrs Modupe Adelaja said the predominantly informal nature of our economy has been posing serious threat to human development, planning and intervention.

According to her, the issue has made the tracking of economic growth and development extremely difficult, pointing out that "various government agencies have varying figures on economic growth indicators".
Adelaja observed that both our development partners and relevant public institutions in Nigeria have different figures about our informal economy. "There is no doubt that the integrity of these figures is questionable".

She said SMEDAN embarked on the exercise because of the need to have a more comprehensive study that will deeply and sufficiently address informal enterprises.
"Our experience since inception of the Agency point to the fact that most micro and small enterprises in Nigeria are informal in orientation, outlook and operations. It is in the same vein that I believe the overall informal sector of the economy should be turned around for better employment generation and poverty alleviation".

The SMEDAN boss noted that one of the tasks for the consultant was to identify the nature and pattern of informal settlements in urban areas of the selected states. "They were also to identify informal and formal enterprises with high employment and export potentials. This will help us provide practicable intervention strategies to the twin issues of poverty and unemployment", She added.

President of National Association of Small Scale Industrialists (NASSI), Alhaji Sanusi Ma'jama in his remark said the future of the Nigerian economy lied in the relative strength of the informal sector.

He said "if the sector is weak and fragile, the Nigerian economy will be hanging on the brink of precipice and if the sector is strong and resilient, the economy will reflect same".

UNDP representative, Ms Grabriella Spirli noted the increasing volume of informal economy in both rural and urban centres, saying that appropriate policy is required to guide the sector. She offered UNDP's continued assist Nigeria to grow her informal sector to formal one.

Six states- Abia, Borno, Kano, Lagos, Rivers including the Federal Capital Territory (FCT) were selected to represent the six geo-political zones of the country in the study. According to the consultant, the findings showed that 85 per cent of those engaged in informal sector are male while only 15 per cent represent women.

Speaking further, Agofe identified the problems of the sector to include inadequate and unsuitable electricity supply, harassment of law enforcement agencies and government officials. Other problems that confront the operators in the sector are scarcity of bank credits, high interest rate credits as well as inadequate working capital.

Back to Top
Post Your Feedback