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SMEs as a Key Driver to Economic Growth in an Emerging Market

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Adewale A. Adeyipo

In spite of the harsh economic conditions Nigeria is faced with, recent trends have shown there are opportunities for growth of the SME Industry in Nigeria. As reported by Nigeria Bureau of Statistics, 2019 Q1 GDP grew by 2.01%, with majority of this growth being associated with the Non-Oil Sector which is a positive sign and indicative of Nigeria’s possible diversification and less reliance on the oil sector to drive her economy.

The International Monetary Fund forecasts that GDP will increase by 2.1% in 2019, which would make Nigeria one of Africa’s slowest-growing economies and means that growth is negative in per capita terms.

While inflation is at 11.4% and has been above the Central Bank’s target of 6% to 9% for almost four years. How then can Nigeria survive the next four years of uncertainties in revenue generation, debt recovery rate, a further devaluation of Naira, low FDI flows into Nigeria in 2018, expected high fuel prices and insecurity? A recent report from Trading Economics shows that Nigeria’s all-time low of FDI inflow for 2018 Q4 was $314 million.

Nigeria’s population median age is 18 years that is made up of young, vibrant, skilled, and unskilled youths. With this youthful population and despite the tough economic conditions, I firmly believe Youth engagement through the SME approach can drive economic growth.

One of the key drivers to economic development in an emerging economy has been the successful engagement of SMEs, while the growth of economic development has been an essential goal for many developing nations of the world.

I wonder sometimes how a country with a 23% unemployment rate, inflation rate of 11.4% plans gets her citizen out of poverty which currently stand at 33.1% if not by empowering the populace that are living below the ‘Poverty Line. i.e. they live and sustain with less than $1 a day. The more people we have actively engaged, the better we are as a nation and with poverty alleviation.

The contribution of SMEs has been accepted as one of the primary supports for economic growth because of its ability to enhance economic output and improve human welfare. With so many challenges faced with SMEs in Nigeria today, low FDI inflows in 2018 is another critical indicator showing why tech firms like Google would establish an AI lab in Ghana and not in Nigeria despite current economic indicators showing that the Nigerian economy is stronger than Ghana’s economy.

Before a technological investment is made in any economy, the investing party measures the opportunity for growth, existing infrastructure, and innovation. Such parameters have side-lined Nigeria for several years. FDI inflow in Nigeria for Q1 2019 was recorded at $1.1 B (Trading Economics Reports).

Though many argue that FDI in Nigeria is usually low after a general election. The point remains that investors must see the basic amenities on ground before coming into any nation which of course stability and security is essential.

Jeff Dean’ the leading AI software engineer at Google, stated that Ghana is the ‘Future of Africa’ and it had to do with the robust network of academic institutions as well as infrastructure in place which was a significant factor on establishing an AI lab in Accra. – Aside from the ‘not too deliberate approach’ from the Government, inadequate Private-Public partnerships and collaborations amongst Government agencies.

The SMEs in Nigeria also lack access to relatively cheap and effective sources of funding, which hinders their growth and contribution to economic growth.

Agencies like SMEDAN can emulate Malaysia NSDC (National SME Development Council) as a use case where they demonstrated a positive impact on their economy since it was established in 2004.

As at 2015, the contribution of SME to the Malaysian economy was measured in terms of their share of the total number of businesses (97.3%) and share of the total number of jobs created at 59%. (Department of Statistics Malaysia)

International Finance Cooperation & World Bank’s Support on SMEs

Without a doubt, Government policies are one of the essential drivers for SMEs developments in any nation.

Two decades ago, Global Financial Institutions and Economic Organizations like World Bank and International Finance Corporation (IFC) emphasized the significance of small and medium-sized enterprises (SMEs), especially in developing regions like Nigeria, these bodies had consistently sought the support of the Government to implement policies for sustainable growth in human capital, financial inclusion, and technological advancement.

According to the World Bank Group, ‘The country partnership strategy period (FY2014-FY2019) has an investment of $8.8 billion through the International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD).

Nigeria has been one of the International Finance Corporation’s (IFC) fastest growing portfolio and represents IFC’s fifth largest global country exposure, with a committed volume of $1.8 billion. Their support for Nigeria is structured around several priorities, which include promoting diversified growth and job creation with a focus on youth, women and the poor in marginalized areas; whilst improving social and financial inclusion.

It was estimated that most developing economies have a high potential in ensuring diversification, inclusiveness, and expansion of industrial production as well as the fulfillment of the fundamental objectives of development. As reported by the World Bank Group, the Country partnership period (FY2014 – FY2019) for Nigeria is expected to have achieved:

  1. 16% increase in power generation capacity; 8% increase in transmission capacity
  2. Improved access of small farmers to inputs and technology and improvement in their average income
  3. Improved road access for two million people in rural areas.
  4. Additional two million micro-entrepreneurs provided with financial services.
  5. Additional 100,000 loans provided to Small and medium enterprises (SMEs).

World Bank has estimated the growth rate for Nigeria’s economy in 2019 at 2.1% with job creation rise of 10% quarter-on-quarter if local or raw materials and resources are well utilized. SMEs depends on the use of raw materials and innovative technologies to further assist them in achieving their goal of self- reliance.

For example, Provision of starch as a raw material to the market can provide jobs for three different levels in starch production, Starch for consumption, starch for clothing, starch for pharmaceuticals. In this ecosystem, the raw material provider and the user creates more jobs and keep the SME ecosystem sustainable.

Adewale A. Adeyipo is Ag. CEO CWG Plc


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GEFAS Launches Tech-Driven Hub to Mobilize Youth for Soludo’s Re-election

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Geeks and Founders Alliance for Soludo (GEFAS) on Thursday 17th July, 2025 unveiled its new office space in a significant event that further strengthens the group’s mission to drive Governor Soludo’s “everything technology, technology everywhere” vision across Anambra State.

The unveiling was performed by the Secretary to the State Government, Prof. Solo Chukwulobelu, who could not contain his excitement and amazement at the level of sophistication of the facility and the vibrancy of the young professionals and tech enthusiasts behind the initiative.

Prof. Chukwulobelu commended the GEFAS team for building such a dynamic platform, uniting diverse sectors under a common goal to support Anambra’s digital transformation and Governor Soludo’s re-election bid at the November 8 Governorship Poll, without requesting a dime from the government.

He noted that their efforts reflect growing youth support for his administration.

“Our goal is to secure victory in the upcoming election and continue delivering good governance to the people of Anambra. Anambra is APGA, and APGA is Anambra

There is no vacancy in Government House come November 2025,” he added.

He urged GEFAS members to remain steadfast and resilient in the face of opposition, adding that the government would collaborate with and complement GEFAS to ensure its vision is further integrated into governance for greater impact.

Also present to lend credence to the movement was the Special Adviser to the Governor on Political Matters, Dr. Alex Obiogbolu, who described GEFAS as a strategic and dynamic angle to the campaigns.

He lauded the initiative, stating that it exemplifies the power of digital tools in modern political campaigning and governance, and expressed optimism that a second term for Governor Soludo would unlock even more innovative solutions for Ndi Anambra.

In her remarks, Ms. Odili Jombo, a coordinator with GEFAS, shared the impressive results of the Alliance’s outreach so far.

She revealed that the GEFAS Call Centre, with its team of 21 dedicated agents, has already reached over 20,000 Ndi Anambra, gathering valuable insights on citizens’ sentiments about Mr. Governor’s performance and their disposition towards the upcoming elections, an experience she described, has recorded more positives than negatives.

She further announced that GEFAS will soon unveil a mobile WiFi bus, among other top-tier initiatives designed to change the campaign landscape and further position Anambra as a leading tech state.

The event was well attended by top government officials, members of the media, tech stakeholders, and other well-meaning Ndi Anambra, many of whom expressed amazement at what GEFAS has created and pledged unwavering support for them and Governor Soludo’s continuity at the November polls.

Explaining the passion behind GEFAS, the Convener and MD/CEO of the Anambra State ICT Agency, Chukwuemeka Fred Agbata, CFA, described the Alliance as a continuity-driven force working to align with Governor Soludo’s vision of moving Anambra from a departure lounge to a destination lounge.

“We believe that together, leveraging technology, we can drive the real change Anambra truly deserves,” he said.

With this milestone, GEFAS remains committed to driving technology-driven engagement that delivers practical impact and amplifies the Solution Government’s transformational strides.


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HCSF Describes Galaxy Backbone as a Strategic Partner in Civil Service Digitalization Reforms

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In a significant move towards accelerating the Federal Government’s digital transformation agenda, the Head of the Civil Service of the Federation (HCSF), Mrs. Didi Esther Walson-Jack, paid a strategic working visit to Galaxy Backbone (GBB) Limited, Nigeria’s foremost ICT infrastructure and shared services provider.

The visit, which took place at GBB’s National Shared Services Centre (NSSC) and Corporate Headquarters in Abuja, forms part of the HCSF’s efforts to deepen collaboration and assess the technological infrastructure supporting the government’s ongoing digitalisation reforms across Ministries, Departments, and Agencies (MDAs).

Accompanied by the Permanent Secretary of the Federal Ministry of Communications, Innovation and Digital Economy (FMCIDE), Mr. Adeladan Rafi’u Olarinre, and a delegation of Permanent Secretaries and Directors from the Office of the Head of the Civil Service, the visit featured an extensive tour of GBB’s cutting-edge Digital Infrastructure facilities. These included its Network Operations Centre (NOC), Security Operations Centre (SOC), and Uptime Institute Certified Tier III Data Centre; all built to ensure a secure, scalable, and sovereign digital infrastructure for Nigeria’s public sector.

In his welcome address, Mr. Adeladan Rafi’u Olarinre described Galaxy Backbone as a critical institution under the supervision of FMCIDE, tasked with providing the nation’s core digital infrastructure and shared ICT services. “Today’s visit is an important opportunity to showcase the significant progress GBB has made in building the infrastructure necessary for a truly digital government,” he said.

“I believe this engagement will foster stronger alignment and collaboration between MDAs and GBB as we move towards a more connected and efficient public service.”

The Managing Director/CEO of Galaxy Backbone, Professor Ibrahim A. Adeyanju, expressed appreciation for the visit, noting its alignment with GBB’s mandate to support Nigeria’s digital transformation goals.

“A visit of this nature by the Head of the Civil Service is highly symbolic,” he remarked. “It reinforces the central role that the Civil Service plays in national development and highlights the importance of strategic ICT infrastructure in driving effective governance.”

He went on to emphasize that GBB’s mission to design, build, and manage Nigeria’s digital infrastructure aligns seamlessly with the Civil Service’s digital reform agenda.

“Our platforms; including the 1Government Cloud, GovMail, and our extensive fibre optic network present in 28 states, are designed to support a digitally enabled, secure, and efficient government,” Prof. Adeyanju added.

He also called for greater collaboration with the Office of the Head of Service to drive the adoption of GBB’s infrastructure, particularly the fibre optic connectivity already terminated at Federal Secretariat buildings across 28 states of the country. He further appealed for support in expanding Local Area Networks (LANs) in the Federal Capital Territory (FCT) secretariat buildings to integrate more MDAs into the digital ecosystem.

In her remarks, Mrs. Walson-Jack commended the world-class infrastructure and strategic digital solutions developed by Galaxy Backbone, stating that her perception of the agency had been greatly enhanced following the tour.

“This visit has opened my eyes to the enormous potential and capacity that Galaxy Backbone brings to Nigeria’s digital journey,” she said. “I now see GBB not just as an ICT agency, but as a strategic partner in the realisation of our dream to build a modern, agile, and paperless civil service.”

She specifically praised GBB’s support for the “War Room” initiative, the widespread deployment of GovMail — currently serving over 34,000 civil servants, and the agency’s high-speed fibre connectivity provided during the 2025 International Civil Service Week hosted by her office.

Reaffirming her office’s commitment to achieving a fully paperless civil service by December 31, 2025, the Head of Service expressed optimism that this goal is attainable with stronger collaboration and technical support from GBB.

She also highlighted several strategic areas where partnership with GBB is critical, including:

  • Full implementation of the 1Government Cloud to host and manage MDA operations.
  • Adoption of an Enterprise Content Management System (ECMS) to streamline records and workflow automation across MDAs.
  • Synergy between the 1Government Cloud Academy and the Civil Service Academy to enhance capacity development.
  • Training and onboarding of civil servants on innovative tools such as Service-Wise GPT – Nigeria’s AI-powered platform designed to transform public service delivery.

Mr. Mohammed Ibrahim Sani, Executive Director of Finance and Corporate Services at GBB, in his vote of thanks, expressed deep gratitude to the Head of Service and her delegation for taking the time to visit and engage with the team. He reiterated GBB’s unwavering commitment to partnering with all stakeholders to deliver inclusive, resilient, and forward-looking digital solutions for the Federal Government.

 


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Festive Seasons Trigger 400% Spike in Livestock Prices Across Nigeria’s North East — Moniepoint Study

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A new study by Moniepoint Inc., Africa’s leading financial technology company, has revealed that livestock prices in Nigeria’s North East markets surge by up to 400% during festive seasons, driven by high demand from cities like Lagos, Port Harcourt, and Onitsha.

The report, which focuses on informal market dynamics in Borno State, shows that traders at Kasuwan Shanu in Gamboru dispatch an average of 50 trucks daily during peak periods such as Eid al-Adha and Christmas, with goat prices rising by 400–470% and rams by over 230%.

Beyond seasonal spikes, the study highlights a shift toward investment-minded trading, where livestock is raised in advance to boost resale value. This approach is helping traders build more stable and profitable businesses, despite the region’s history of conflict and economic volatility.

Key findings include:

  • 51.2% of traders source goods from Maiduguri, reinforcing its role in Nigeria’s food supply chain
  • 45% of traders now accept digital payments, with mobile transfers and POS usage rising sharply since the 2023 cash crunch
  • Informal credit and trust-based transactions remain dominant, often conducted via phone calls and voice notes, without formal contracts

Moniepoint CEO Tosin Eniolorunda said the company’s tools are helping bridge long-standing gaps in access to finance: “This shift isn’t just tech-enabled — it’s structurally impactful. We’re helping build an economy where everyone can participate.”

The study joins Moniepoint’s growing portfolio of thought leadership on Nigeria’s informal economy, following previous reports on Onitsha Market, community pharmacies, and women-owned businesses.


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