Why MSME Development Should Be at the Centre of Nigeria’s Growth Agenda

MSMEs Drive Jobs, Innovation, and Inclusion

Hi, I’m Seyi Asagun. I write about money where it matters most: the small businesses keeping the economy alive. I share grounded insights on MSME finance, inclusive lending, their struggles, their wins, and the smatter systems that can help them grow sustainably.

In Nigeria, about 39 million MSMEs operate across sectors, yet they remain the unsung heroes of our economy. According to SMEDAN and NBS, these businesses contribute nearly 48% to GDP, represent 96% of all enterprises, and employ roughly 84% of the workforce. Despite their scale, they struggle with inconsistent support and remain underutilized in national growth strategies. If we want economic progress that’s real and inclusive, we must put MSME development at the heart of our growth agenda.

MSMEs Drive Jobs, Innovation, and Inclusion

MSMEs are the primary engines of employment. They absorb labor from cities to rural communities and offer pathways out of poverty. That’s not theory, it is fact. Their reach spans across women's economic empowerment, youth employment, and regional development. The national MSME policy (2021–2025) stresses inclusion of these groups—yet execution is still lagging.
Their small-scale operations create nimble innovation at the grassroots. From mobile food vendors to tech-enabled local suppliers, MSMEs are disrupting traditional value chains. But without clear support, many never scale.

Persistent Barriers Impede MSME Growth

• Data Gaps
  National MSME data is still sketchy. Although a census is underway, policy is often built on assumptions rather than real business insights.

• Finance Shortfalls
  Affordable credit remains scarce. What’s available tends to be expensive and inaccessible, forcing businesses into informal, high-cost borrowing. In 2023, the Development Bank of Nigeria disbursed ₦787 billion to nearly 495,000 MSMEs—but that’s still a fraction of the sector’s real demand.

• Poor Infrastructure and Market Connections
  MSMEs face daily issues like unstable electricity, unreliable transport, and weak market access. These gaps cripple productivity and keep them small.

Momentum Is Building—Now We Must Act

Several programs that showed promise:

• National MSME Policy (2021–2025): Nigeria’s MSME roadmap is clear—create more businesses, equip them with relevant skills, and drive inclusive participation, especially among women and young people. It’s not just a document; it’s a directional shift in how we think about enterprise development.

• Development Bank of Nigeria (DBN) & Bank of Industry (BOI): In 2023 alone, over ₦787 billion was disbursed to MSMEs—proof that when capital is structured right and backed by training and technical support, growth follows. Notably, 72% of DBN’s borrowers were women, showing what’s possible when financial inclusion meets intentional design.

• SMEDAN & Federal Government Programs: Government-led interventions under agencies like SMEDAN have generated more than 90,000 jobs and supported over 116,000 entrepreneurs just in the first quarter of 2025. These aren’t small wins, they’re building blocks for a stronger, more resilient MSME ecosystem.

• AfCFTA & UNDP Collaboration: New export tools and training initiatives are being rolled out to help Nigerian MSMEs access wider African markets. With AfCFTA in play, our small businesses are no longer limited by local borders—they can compete continent-wide, if given the right support.

Reframe the Growth Model: Policy Actions That Work

1. Embed MSMEs in National Planning
   Data from the ongoing census must inform all major policies—from infrastructure to trade. Without that, interventions remain scattershot.

2. Scale Affordable Finance
   Expand programs like DBN and BOI with easier terms. Introduce credit guarantees and blended finance to reduce risk for both lenders and borrowers.

3. Build Shared Facilities and Energy Hubs
   Support industrial clusters, solar-powered workspaces, and market platforms so that MSMEs have practical places to operate, grow, and trade.

4. Prioritize Skills and System Support
   Beyond funding, MSMEs need structured training in business planning, accounting, compliance, and export readiness. DBN’s model pairing capital with training is the right template.

Conclusion: MSMEs Are Not Optional

Nigeria’s path to sustainable growth must begin with the businesses we already have. MSMEs are where jobs, innovation, inclusion—and resilience—live. Policies must reflect that. Finance, infrastructure, data, and systems must align around those 39 million enterprises—not the other way around.

• Policymakers: Make MSMEs central in every growth plan using real data.

• Financial institutions: Extend affordable loans with capacity-building support.

• Development partners: Fund ecosystem infrastructure—energy, clusters, export tools.

Nigerians deserve a growth strategy that works for everyone. MSME-driven economic planning is not just smart—it’s essential.

Thanks for reading The Seyi Asagun Brief! I’d love to hear your thoughts - Share your perspective or experience in the comments below. Let’s keep the conversation going.