SMEs’ contributions to GDP dip to 3.5%, says NBS –

COVID-19 pandemic: SMEs' contributions to GDP dip to 3.5%, says NBS

From Isaac Anumihe, Abuja

The National Bureau of Statistics (NBS) has said that following the ravaging effect of coronavirus in 2020, Micro Small and Medium Enterprises (MSMEs’) contributions to the Gross Domestic Products (GDP) decreased to 3.5 per cent when compared to 2017.

Speaking when he released the findings of MSMEs survey conducted in 2020, the Statistician General of the Federation, Dr Simon Harry, said that COVID-19 pandemic affected MSMEs in the country such that 53.2 per cent of SMEs and 37.3 per cent of Micro Enterprises (MEs) were temporarily closed.

‘The major reason reported for the closure was the total lockdown of the economy and restrictions in movements which consequently led to increase in cost of transportation,’ he said.

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According to Harry, a total number of MEs was 38,413,420 (96 per cent) while the total number of Small and Medium Enterprises (SMEs) was 1,240,965 (3.1 per cent).

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‘In spite of the contributions of this sector to the economic growth, there are still challenges hindering its rapid growth and development. Key among the challenges is the dearth of robust, timely and reliable data on MSMEs. It was in attempt to address this problem that the fourth round of survey on MSMEs was conducted nationwide so as to generate up to data on MSMEs with a view to determining the effects of the recent socio-economic development as well as global occurrences like COVID-19 pandemic,’ the NBS boss said, adding that the first survey was carried out in 2010 and the second and third were done in 2013 and 2017 respectively. The fourth survey, he said, was conducted in 2020.

Recall that Small and Medium Enterprises (SMEs) play a major role in most economies, particularly in developing countries. SMEs account for the majority of businesses worldwide and are important contributors to job creation and global economic development. They represent about 90 per cent of businesses and more than 50 per cent of employment worldwide. Formal SMEs contribute up to 40 per cent of national income (GDP) in emerging economies. These numbers are significantly higher when informal SMEs are included. According to estimates, 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world. In emerging markets, most formal jobs are generated by SMEs, which create 7 out of 10 jobs. However, access to finance is a key constraint to SME growth. It is the second most cited obstacle facing SMEs to grow their businesses in emerging markets and developing countries.

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