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Thursday, December 8, 2022

Prioritize SMEs for wealth creation, Expert urges

By Francis Akinnodi

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An economist, Dr. Timothy Awe has urged both federal and state governments to prioritise the Small and Medium-sized Enterprises (SMEs) for wealth creation.

Awe, a lecturer of Economics at the Ado Ekiti University gave the assertion while quoting available data, positing that, SMEs in Nigeria contributes up to 48 per cent of the National Gross Domestic Product (GDP), accounts for 96 per cent of businesses, and provides 84 per cent of employment.

He specifically stated that SMEs are the lifeblood of any economy, and that countries that prioritise the success of SMEs position themselves for wealth creation.

He explained that the development of countries like China, Germany, France, among others, can be attributed to the success of their SMEs.

“In a country of over 200 million people, with 40 million of the population classified as youths below the age of 35 years, SMEs can create meaningful employment opportunities that will stall the alarming talent drain across the country.

“Government must create an environment and structure to enable capital flow freely across the country.

“The best way to do this is to incentivize the free movement of capital through the growth and development of small business enterprises.

” SMEs have the capacity to create opportunities for people to feed themselves and care for their families.”, he assured.

Awe argued that, to drive financial inclusion, leadership, governance, regulation and structure have a key role to play, adding that, restrictive policies should be relaxed to encourage more people, especially, rural dwellers to access financial services.

He also advocated that regulatory requirements should be flexible and favourable to financial providers, which would then allow them to create more value-adding products and services for people.

According to him, “Poverty alleviation must consist of deliberate programmes that would reach the grassroots, and dogged commitment to implementing and tracking the plans, must not be the same as usual.

Financial inclusion and social welfare programmes, he stressed, have been identified globally as panacea for poverty eradication, noting that, “when people have access to financial services such as credits, loans, savings, life insurance, and others, they can fend for themselves and run sustainable businesses that would create a ripple effect in the country’s GDP.

“But access to these financial tools remain limited in Nigeria. We are still one of the top three unbanked countries in the world with 40% of our population living without access to financial services”, he said.

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