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Nigeria is 50 per cent driven by SMEs

The potentials of small and medium businesses as the growth driver of any economy is recognised by the federal government.

Nigeria’s Minister of Finance, Mrs. Kemi Adeosun, addressing the audience on Nigerian economy.

This remark was made at the Platform, an annual discussion forum on Nigerian economy and development.

“Actually, our economy is 50 per cent driven by SMEs and only 10 per cent of them have access to loans. So, if you begin to improve their access to capital, you can rapidly grow jobs and businesses,” Adeosun said.

She further stated that it is as a result the federal government has revived the Development Bank of Nigeria, whose major role is to ensure availability of capital and growth funds for SMEs in the country. The $1.3 billion capital bank would lend to microfinance and commercial banks, specifically for on-lending to SMEs.

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Discussing the policy direction of the government, the minister noted that the federal government is currently laying the foundation for a sustainable economy, through saving for the future and implementing a non-oil based growth model for the economy.

"We are going to build an economy that really doesn’t care about what the price of crude oil is. There are 180 million of us in the country and we have two million barrels of oil per day. Kuwait has 3.9 million people and three million barrels of oil per day. So, we can’t afford to continue to behave like an oil economy. An oil economy simply pumps the oil out, then use the dollars to buy everything they need.

“That is the economic model that Nigeria has largely been following. We export crude oil and then we buy everything. We don’t add value, we don’t get any of the by-products and that means that Nigeria has become a very unproductive economy. That is not the intention of the Nigerian dream.”

“Even though things are difficult, we are saving. As you know, when we came in, we gave the Sovereign Wealth Fund (SWF) an extra $500 million and we are still going to do more. We cannot afford to waste because we don’t have money to waste.”

“We have taken the pains. Often, the medicine that does it the best is the bitterest medicine and we have had very bitter medicine in the last one year. But now, we would have the long-term benefits in terms of growth and jobs.”

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She also informed the gathering that some of these actions by the federal government are yielding expected fruits, as a lot of foreign investors were interested in investing in the country.

“When I leave here (The Platform), I am going to meet a group of investors that came in from America. Long-term investors are now looking at Nigeria and saying it is time to come in. On Thursday, we had a group of Japanese.”

“We are not talking about people that are bringing in sachets of things to come and sell here, we are talking about people that want to set up factories to manufacture transformers. We are talking about industrialists. They are coming back into Nigeria because Nigeria is showing that it is serious, Adeosun told her audience.”

While stressing the need for all to be tax complaint, the minister disclosed that a recent study revealed that only 214 Nigerians pay tax in excess of N20 million, and government is taking measures to broaden the tax base of the country.

“One of the things we have been trying to do is to improve our revenue so that we can’t continue to depend heavily on crude oil sales,” she added.

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This year’s edition of the programme had keynote address from the Nation’s Vice President, Prof. Yemi Osinbajo, while the Chief Economist and FS Advisory Leader of PwC West Africa, Andrew S. Nevin and many accomplished Nigerians in academia, business and public sector delivered paper on various aspect of Nigerian economy.

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