In order to harness the potential of the Micro, Small and Medium Enterprises sector, there is a need to address the constraints militating against its contributions to the economy, the President and Chairman of Council, Chartered Institute of Bankers of Nigeria, Dr Uche Olowu, has said. He stated this in Abuja in a presentation at the 11th Annual Banking and Finance Conference.
Olowu said despite the fact that MSMEs were contributing about 48 per cent to the nation’s Gross Domestic Product in nominal terms, this contribution was being limited by a lot of challenges. For instance, he noted that 80 per cent of operators in the sector still maintained that access to finance remained a major challenge. He also said that the high tax rate of about 30 per cent was another major constraint to the operations of MSMEs.
The CIBN President stated, “Truly, MSMEs should be the game changer given their potential and expected contribution in an emerging or developing economy. However, they are constrained by various factors. Eighty per cent maintain that access to finance remain their major challenge. They pay high tax rates of almost 30 per cent.
“In addition to lack of finance and high tax regime, they are further burdened by many, and most times, by conflicting and duplicated regulatory and other supervisory and government agencies. For instance, to run a restaurant, you must comply with the demands and rules of over 10 agencies from the federal, state and local governments.
“Even though we have made little progress in the global ranking in ease of doing business, the Nigerian business environment still remains very challenging.”