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Nigeria has recently been found to have the continent’s highest GDP, having recently overtaken South Africa, and it owes the bigger part of that incredible accomplishment to small and medium-sized enterprises (SMEs) across the country. This report, commissioned by IHS Africa, addresses a lack of scholarship on the subject and sets the scene for future analysis and development. The SME sector has a majority share in Nigeria’s economy, with a mere 10% of business activities in the region being conducted by companies not included in the SME classification, and there is an unfortunate lack of comprehensive studies looking to understand this distinctive business climate. Through its contribution on this report, IHS Africa hope to bring the subject matter to the forefront of economic research.
The work was conducted by The Economist Intelligence Unit and it involved a combination of quantitative and qualitative research. It has been found that the current prosperous environment stands more as a testament to individual business acumen as opposed to a cohesive, beneficial platform on a national level.
Some of the findings did not turn out to be much of a surprise; infrastructure concerns are a global problem after all, whilst others were unique to the country. As one of the main players in the telecommunication industry, IHS Africa is well aware of, for example, the important role that mobile operators play in everything from every day communication to financial operations in the lives of citizens. Limited access to financing, on the other hand, poses a unique concern. As less than 2% of the adult population has been allocated funding from a banking institution, the problem of funding new business becomes thornier than might be expected. Resolving many of these problems requires focused efforts towards improvement on all sides and the data provided by IHS Africa’s report provides an empirical base for future action.