Who is thinking about small businesses in Nigeria?
In Nigeria, almost everywhere you turn, you are likely to find a young person who owns one business or another. From Logistics, Food retail, cosmetics, event planning, interior design, fashion, style, Agriculture, tech or even as a Vendor, young people in Nigeria are trying to either start a new business or manage an existing business, despite the harsh and tough business climate in Nigeria, but who is thinking about them really?
For me, I consider that many of these businesses that have remained largely at the subsistence level, if carefully identified, aggregated, supported, and adequately nurtured, can transform from small businesses, to become big employers of labour, pay tax, contribute to government revenue, and ultimately to the growth of the economy, but again who is thinking about them really?
Let’s even pretend to agree with Nigeria’s Ministry of Industry, Trade and Investment, that the number of micro, small and medium enterprises is about 37 million (a figure that I dispute because I think it is underreported anyway), but despite what I have described as underreporting, the ministry disclosed that, the number alone accounts for more than 84% of Nigeria’s labour market. Huge.
There are at least two facts that support this present entrepreneurship bulge, the first is that unlike the generations before them, the Gen Y also known as Millennials (the generational cohort 1981-1996) are entrepreneurial in nature. Globally, Millennials and the generation after them Gen Z, have less of the traditional 9-5 or white-collar disposition. It is the reason you are now likely to hear about remote working and all that new stuff you are unlikely to have seen in practice before now. This disposition is also partly responsible for the reason work culture is changing in terms of engagement, style, and disposition, simply because more young people are growing to be indisposed to the white-collar culture!
The other fact that also supports this bulge is that opportunities in the formal sector (the typical white-collar jobs) are limited if not completely absent in Nigeria. As a reminder, Nigerian Bureau of Statistics (NBS) recently reported that the total number of unemployed people in Nigeria is now 23 million, up from 27% in Q2 2020 to 33% in Q4 2020, the implication is that at least a third of Nigeria’s labour force, did absolutely nothing within that period. So, for most young people, starting a small business has become the only way to make some money to survive at the very least.
At the wake of each new day, there is at least one young person who is starting a business, but for most the intention is simply and squarely to survive. But I have said before, that it is dangerous to have the bulk of our population on what my friend Aisha Seriki calls “Survival mode”, they will hardly be productive. I have said this loud enough, that the Nigerian people particularly its young people should live for much more than survival, they should live for opportunities, hope, potential and possibilities, in this case, young business owners must live with the certainty that Nigeria has an environment that will enable their business to grow, expand and thrive.
It is in trying to find answers to this conundrum that I decided to call the prodigiously brilliant and renowned Economist, Tope Fasua who is in far away Kano, by the way, touring and beaming searchlights on some big business activities in Kano, most of these big businesses hardly even hug the headline.
In our conversation, we both agreed that entrepreneurship cannot be sustainable when it is anchored on survival. He quickly reminded me of the thoughts of Austrian Political Economist Joseph Schumpeter on entrepreneurship who had since described entrepreneurship in terms of innovation or creating a new market. Fasua added that if Nigeria had just 2 million innovators, we will not be where we are today.
I completely agree with him, but the challenge is that you can’t have an innovative population when the bulk of that population are unemployed and in extreme poverty, you need a population that is thinking beyond survival to be able to innovate and invent. People who are hungry cannot innovate and that is the reason most Nigerians turn to entrepreneurship as a means of survival.
It is for this reason that we must all remind government and political leaders of their responsibility to provide opportunities for the people so that starting or managing a business in Nigeria is not just about survival but growth, expansion and the potential to contribute to the economy.
But now that we already have a large population of small business owners, who is thinking about them? Government has a duty to think about them, government must commit to identify, aggregate and support small businesses so that they can become employers of labour and big contributors to the economy.
It is in this spirit that I was full of effusive praise for Media Influencer and Author of Digital: The New Code of Wealth JJ Omojuwa, who recently rallied people to raise over N6 Million to support small business through his #PitchCH initiative. I was also particularly happy, because one of my friends whom I had watched over time start her fashion brand from zero, also made the cut. I believe that Omojuwa’s #PitchCH initiative has provided a sustainable model that government and political leaders can adapt, which is to identify and support small businesses purely on the merit of their work and the potential of their business.
Although, fair enough to the federal government, a point which Fasua also alluded to, they recently registered several businesses for free as part of the government’s enabling business environment reform, the recently signed Finance Act 2019 also exempt businesses below N25million turnover from paying VAT. So, by this intervention, I do not feign ignorance of the government’s effort in this regard, but the government must do more. Government must-see small businesses for their incredible potential and capacity to help to reduce Nigeria’s staggering unemployment and poverty index.
The first way to start is for the government to segment the market which is the aggregation I talked about earlier, further ease business registration, since most businesses are tech driven particularly with social media. Government must improve access to the internet, provide quality funding and support among other intervention.
The difficulty of starting, managing and scaling a small business in Nigeria should worry anybody, I am worried!