More Business To Reduce Poverty

The number of poor Nigerians is put at 58 million or 33.1 per cent of the population. 

This represents an improvement from the previous study conducted in 2009/2010 which put the poverty level at 61% of Nigeria’s population.

The World Bank’s Economic Report (July 2014) states that Nigeria is one of the top five countries that has the largest number of poor people in the world.

The top five countries, in terms of numbers of poor, are India (with 33 percent of the world’s poor), China (13 percent), Nigeria (7 percent), Bangladesh (6 percent) and the Democratic Republic of Congo (5 percent), which together are home to nearly 760 million of the world’s poor.

According to the Bank of Industry, BOI, Micro, Small and Medium Scale Enterprises, MSMEs, constitute the essential ingredients to lubricate and develop the Nigerian economy to lift citizens out of poverty.

Divisional Head, Large Enterprises of BOI, Mr. Joseph Babatunde said that there is need to enhance the business activities of MSMEs.

According to Babatunde, there should be provision of financial and tax incentives to encourage SMEs to join the formal sector. Governments need to provide tax incentives for SMEs and subsidies similar to those available to large corporations as well as give more priority to intervention funds for start-ups/ or SMEs, he said.

Babatunde added that governments should promote public-private partnerships to attract venture capital funds and higher levels of investment, and put in place measures to create investor-friendly environments.

He said, “SMEs contribute a large share of manufactured exports in most industrialised East Asian economies like China and India, ranging from 31-56%, than less developed African economies of less than 1% in Tanzania and Malawi, and 4% in Nigeria for instance. There is therefore the need to focus on policies that will promote the SMEs export potential to boost economic growth and development.

“Building supply chain capacity: Apart from government, large corporations can also support the development of a strong and reliable SME sector. A lot of large corporations source for their supplies from developing countries.

Large corporations can help SMEs become more viable business partners for raw materials sourcing, by providing capacity building support in terms of training in business planning, logistics, marketing, distribution, and quality control. They can assist through technology transfers, direct investment in infrastructure, and the sharing of knowledge. These would make SMEs more competitive, as well as facilitate their access to credit. All of this can benefit the large corporations by creating more effective and inclusive supply chains.