Lynda Saint-Nwafor
Nigeria's economic challenges have seen it suffer two significant recessions in recent years; still, Micro, Small & Medium Enterprises (MSMEs) have provided much-needed succor to millions of Nigerians struggling to secure gainful employment.
Today, SMEs account for 46% per cent of the country's GDP. This is no surprise as SMEs represent almost 97% of businesses in Nigeria and contribute to 88% of employment in the private sector. Interestingly, most of the over 40 million MSMEs are owned by sole proprietors with little or no funding and are, therefore, more susceptible to suffering the impact of any economic downturn.
Data shows that this has been the case over the last few years. Limited access to funding, rising inflation, and the wrecking ball of the pandemic mean most critical metrics in the sector are trending downwards. Over two million MSMEs were lost between 2017 and 2021, and despite an increase in employment in the industry within the same period, there was a significant decrease in GDP contribution. The situation has become worse in recent years. More than half of existing SMEs have faulted the rising cost of doing business as a significant drawback in their quest to achieve growth, with the annual inflation rate currently at over 22%--the highest in Nigeria since 2005.
Incidentally, beyond the pangs of underinvestment and rising inflation, an unprecedented upswing in technological innovation and adoption globally has made the sector and doing business even more dynamic. We are now witnessing more SMEs leveraging new technological solutions to satisfy existing customers and reach new ones. Likewise, there has been an encouraging proliferation of Nigerian startups offering MSMEs tailored digital services, including quick credit, payment wallets, and bookkeeping services.
It thus raises the question: how can SMEs in Nigeria take maximum advantage of this technological shift to weather the storm of peculiar economic challenges in their business operations? What will the future of SMEs look like with new technology concerning access to finance, markets, infrastructure, knowledge, and more?
I have intently engaged owners of small businesses in conversations about their convictions and reservations about the impact of new technology on their businesses. In many instances, a lack of awareness about the opportunities technology provides remains a significant barrier to accessing the required support. For many, a lack of know-how to translate the myriad opportunities technology promises to seamless operations management, market access, and improved productivity contributes mainly to their skepticism and stalling. Therefore, the first crucial step in driving Nigerian SMEs to leverage technology to navigate unfavorable economic tides and achieve sustainable growth would require deliberate knowledge sharing and training.
MSMEs must recognize the linkage between emerging technologies and business productivity in today's global business landscape. They must understand that crucial technologies such as Big Data and Analytics, Artificial Intelligence, Internet of Things, Cloud Computing, Virtual and Augmented reality (VR & AR), Cybersecurity, and many more have the potential to influence strategic levers in the areas of scale, cost optimisation, and operational effectiveness. More importantly, they must know the practical application of these new technologies.
Analyzing big data can significantly help SMEs identify new growth opportunities, forecast future trends, and optimize marketing efforts. AI can automate tasks and workloads, including customer services, data, or inventory management, while VR and AR can provide customers with immersive experiences that build brand loyalty and increase sales. Cloud computing will offer SMEs scalable and cost-effective solutions for managing technology infrastructure. The Internet of Things is also exciting. The technology can provide businesses with valuable data for specific operations and improve efficiency.
However, it is essential to note that conversations around the upliftment of SMEs in Nigeria must transcend lip service if we are to leverage these numerous technologies for the desired productivity and growth in the sector. Our actions can come in the form of deliberate partnerships and investments.
In 2018, MTN Nigeria demonstrated this by signing a Memorandum of Understanding (MoU) with Microsoft to create sustainable and scalable initiatives to ensure the growth of SMEs in the country. The partnership aimed to leverage Microsoft's technologies and MTN's expertise to develop strong value propositions for small businesses. At the time, the recommendations spoke to the needs of SMEs around capability development, access to markets, and business networks across Africa; and addressed some of their challenges by creating innovative solutions.
Our resolute commitment to providing SMEs with a foundation to survive deep business waters has similarly led to establishing SME-friendly programmes that can accelerate growth and drive digital inclusion. The REVV Programme, for instance, was launched by MTN Nigeria three years ago to address major macro-level issues facing SMEs at the height of the pandemic. The programme embraced a comprehensive strategy comprising four key components: masterclasses, market access, productivity tool support, and advisory initiatives to assist over 10,000 SMEs in accelerating the growth of their businesses in an emerging digital economy.
As an extension of our efforts for SMEs to survive in a post-COVID economy, MTN Nigeria was inspired to launch new Customer Relations Management (CRM) applications. The initiative had one primary goal: to empower MSMEs with digital tools and solutions to enhance their customer management capabilities and provide a one-stop platform for their ICT needs.
It is, however, critical that any tactical approach we employ in providing avenues for SMEs to leverage technology for productivity must be geared towards inclusiveness. The estimation by the International Finance Corporation (IFC) that about 41% of businesses in Nigeria are owned by women is compelling and provides us with a solid base to build upon. In this regard, MTN Nigeria recently organized a webinar to encourage and empower female-led SMEs to utilize advanced technologies to enhance their business processes for scalable growth. With the ICT company fully embracing its role as a digital enabler for SMEs, it was necessary to dedicate the event to specifically focus on female SMEs to recognise their contribution to entrepreneurship in Africa's largest economy.
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With MTN Nigeria's continued understanding of the importance of new technology to achieve productivity in the MSME sector, especially regarding connectivity, data analysis, and process automation, it is an exciting time for small business owners. Our investments in technological solutions to support SMEs mean small business owners in the country can now have easy access to comprehensive digital solutions, including IoT, Mobility, Cloud and ICT, and Productivity and Collaboration. When fully harnessed, these solutions present SMEs with unmatched opportunities to improve organizational effectiveness and productivity in their businesses.
As the world continues to experience rapid technological advancements and digital transformation, embracing these technologies becomes a key driver for Nigerian SMEs to remain competitive and thrive in the marketplace. This will ultimately empower them to navigate challenges, adapt to evolving customer preferences, and stay ahead of the curve in a rapidly changing business landscape.
Crucially, embracing emerging technologies will benefit individual SMEs and significantly contribute to Nigeria's overall economic development by fostering entrepreneurship, job creation, and sustainable growth. MTN Nigeria, I am enthused, will remain utterly committed to the cause.
·Saint-Nwafor is Chief Business Enterprise Officer, MTN Nigeria
