The Nigerian Economic Summit Group (NESG) has expressed fears of economic recession and social unrest as possible consequences of Nigeria’s current weak economic growth, which is manifested in rising inflation and unemployment figures.
dr Olusegun Omisakin, chief economist and director of research and development at NESG, expressed concern noting that the return of inflationary pressures and falling purchasing power are hurting the Nigerian economy and that “weak growth combined with inflation and unemployment are leading to a recession can and social unrest.”
Omisakin was speaking at an event ahead of the 28th Nigerian Business Summit (#NES28) organized by the NESG and the Federal Department of Finance, Budget and National Planning themed “Key Factors for Economic Prosperity: A Critical Look at Enterprise Policy”.
Omisakin explained that access to credit and an unfavorable business environment affect production capacity and product prices, contributing to inflationary tendencies; The relationship between oil prices and trade surpluses shows that 79 percent of Nigeria’s total exports are crude oil, but the country has not used it to its advantage, leading to a drop in foreign direct investment (FDI).
Omisakin said Nigeria’s oil sector must do well considering the growing non-oil sector is not contributing to job creation.
In her welcoming remarks, NESG Chief Executive Officer Ms. Wonu Adetayo said: “As Nigeria looks to welcome a new government, economic growth should be a key issue and an immediate focus, considering that entrepreneurship is a crucial engine of the economy.
“In order to implement policies and interventions, entrepreneurship policies need to be addressed, including the gaps in them, and this event will review key policies on issue areas to boost access to finance.”
Adetayo said the Nigerian entrepreneurial system continues to struggle with the pandemic-related recession and the current macroeconomic problems of the Nigerian economy. She also said that access to finance and poor business environment in Nigeria are exacerbating the economy’s problems. “Although the Nigerian economy continues to show resilience, many MSMEs continue to grapple with the impact of the challenges,” she said.
The 2021 MSME Survey in Nigeria showed a 4.5 percent decline in MSME growth, indicating a decrease from 41.5 million in 2018 to 39.6 million in 2021, mainly due to the impact of the pandemic; meaning that 1.9 million MSMEs have disappeared.
Minister of State at the Federal Department of Trade and Investment Mariam Katagum, represented by Enterprise and Promotion Director of the Nigerian Small and Medium Enterprise Development Agency (SMEDAN), Mr Sunday Ewans, stated that important policy actions address key areas that affect small businesses.
She found that micro-enterprises form the majority of Nigeria’s 39.6 million MSMEs, accounting for over 95 percent of all MSMEs. In addition, she revealed that in a 2020 impact assessment survey of MSMEs, small businesses said they lacked adequate access to affordable finance, skills and market access.
For his part, the Managing Director/CEO of Development Bank of Nigeria (DBN), Mr. Tony Okpanachi, said that DBN provides technical support to financial institutions, partial loan guarantees and capacity development for MSMEs. He pointed to the existence of a funding gap in the sector, which affects the availability of finance for MSMEs.
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