The economic significance of MSME survival fund in Nigeria

Even though small and medium scale enterprises (SMEs) all over the world are mainly private concerns, governments have in one way or the other focused on their performances for economic gains and growth.

This explains why some governments in developed economies like the US & China had formulated policies aimed at improving and empowering the growth and development of the SMEs.

According to the National Bureau of Statistics (NBS), SMEs account for over 60 per cent of enterprises and employ about 70 per cent of people in the informal sector while contributing over 65 per cent of the annual GDP. This is why no serious or responsible government will neglect the SME in times of need.

In some cases, governments focus on assisting SMEs to grow through soft loans and other fiscal incentives to promote the socio-economic development of the country like poverty alleviation, youth unemployment, human capital development, and improve the social welfare of the people.

The COVID-19 lockdown brought untold hardships to businesses with small scale artisans being the worst-hit. Globally, SMEs are the bedrock of national economies. This is why serious governments take them seriously. They receive some of the biggest government support in times of serious socio-economic crisis like we had in the case of Covid.

As a response to the COVID-19 pandemic, President Muhammadu Buhari set up Economic Sustainability Committee (ESC) and asked the Vice President, Professor Yemi Osinbajo, to lead this team.

Their task was to come up with a comprehensive post-Covid recovery blueprint alongside several other assignments. After working for weeks, the Osinbajo-led Committee came up with the National Economic Sustainability Plan (NESP).

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The Plan – which was approved by President Buhari – recommended, among other things, the need for huge public funding for Social Investment Programmes (SIPs) and other pro-poor policies as a means to get the economy rolling again. It is, in the Committee’s wisdom, that SIPs are a necessity for the artisans, SMEs, farmers, and others in that cadre to get the economy on track again. So, nobody should be surprised that the government recently launched the N75bn MSME Survival Fund.

The MSME Survival Fund has two components: the Guaranteed Off-take Stimulus Scheme and the MSME Payroll Scheme which are to be implemented by the Federal Ministry of Industry, Trade, and Investment. Under the Off-Stake Scheme, the artisans are paid N30,000 for an initial three months. Under the Payroll Scheme, the Government pays the SMEs’ workers (a maximum of 10) for an initial period of three months.

One key aspect of the Fund is that the Nigerian Government through her many agencies like the NIPC, SMEDAN, and FIRS will enhance their engagements with the MSMEs, and also create central policies where SMEs are allowed to showcase their products/services and sell to the global market while ensuring adherence to the international standard.

It is evident that SMEs contribution is considerably high in economic development whether it is a developed country or developing country. Not only financially subsidized promotion is essential, but the strategic implementation becomes vital for sustainable development of the SME sector.

Strategic implementation takes care of financial aspects, human resource, marketing, research and development, technology, and corporate governance in the SME sector.

This is why we all must embrace the Survival Fund initiative as a reality in the post-Covid era for artisans as part of the government’s commitments to economic recovery.

Vanguard News Nigeria


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