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SMEs as a Key Driver to Economic Growth in an Emerging Market
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:
- 16% increase in power generation capacity; 8% increase in transmission capacity
- Improved access of small farmers to inputs and technology and improvement in their average income
- Improved road access for two million people in rural areas.
- Additional two million micro-entrepreneurs provided with financial services.
- 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
As the world marks International Youth Day, attention once again turns to the opportunities and challenges facing young people as they prepare for work, financial independence, and adulthood.
In Nigeria, the urgency is clear. According to UNICEF, about 7% of young people aged 15–24 possess basic ICT skills, highlighting a wider gap in the skills required to participate effectively in an increasingly digital economy.
At the same time, the Federal Government, through the Federal Ministry of Youth Development, continues to prioritize skills development, job creation, entrepreneurship and social inclusion.
For PalmPay, youth empowerment goes beyond corporate social responsibility. It is an investment in the people who will shape Nigeria’s workforce, businesses and economy.
This belief is reflected in initiatives focused on financial literacy, employability, digital skills and access to opportunities.
Through its Graduate Trainee Programme, PalmPay provides young graduates with opportunities to gain workplace experience, develop professional skills and build careers in a fast-evolving industry.
The investment also extends to financial education. Through its NYSC Financial Literacy Programme, PalmPay brings practical financial education to young Nigerians at an important transition point, helping Corps members develop better habits around saving, spending, budgeting and protecting their money.
For young women, Purple Woman provides another pathway to economic empowerment, creating opportunities for internships, learning and professional development while supporting greater female participation in the technology sector.
Speaking on the importance of youth empowerment, Chika Nwosu, Managing Director of PalmPay Nigeria, said: “Nigeria’s young population is one of its greatest assets, but unlocking its potential requires access to the right skills, knowledge and opportunities. At PalmPay, we are committed to equipping young Nigerians to learn, earn and thrive in an increasingly digital economy. We believe that investing in young people today is an investment in a stronger, more inclusive Nigeria.”
These initiatives reflect a broader belief that youth empowerment is most meaningful when young people are given the knowledge, exposure and opportunities to apply what they learn.
A graduate given workplace exposure today can become tomorrow’s business leader. A Corps member who develops sound financial habits can carry those lessons into their career and personal life. A young woman given access to professional opportunities can gain the confidence, experience, and networks to create opportunities for others.
Investing in young people is a great strategy for building a stronger, more productive, and more inclusive economy.
This International Youth Day, PalmPay reaffirms its commitment to investing in young Nigerians and contributing to a broader national ambition where the young population is not just counted, but equipped, employed, empowered, and positioned to lead.
Mobility technology company, Moove has raised $250 million in a Series C funding round at a valuation of $2.1 billion, reaching unicorn status.
The startup will deploy the fresh capital to build out autonomous vehicle infrastructure, expand fleet ownership, construct robotics-focused “Nests” for charging and maintenance, and grow its autonomous workforce from 150 to 500 by year-end.
The company plans to enter additional global markets, reflecting a strategy to build the operational infrastructure required for large-scale autonomous transportation rather than simply supplying vehicles.
Led by Mubadala Investment Company and co-led by Woven Capital, Toyota’s Growth Fund, and Ion Pacific, the round also included new investors BlueCrest Capital Management, Sona Asset Management and The Raptor Group, alongside existing backers BlackRock, MUFG, Franklin Templeton and Uber.
“Autonomous mobility is becoming an infrastructure race requiring fleets, charging systems, maintenance, data infrastructure and continuous city-level operations,” said Ladi Delano, co-founder, co-CEO and advisory board chairman of Moove.
Founded in Lagos in 2020, Moove has grown into a global mobility platform employing about 3,300 people across 29 cities in 13 countries, operating approximately 42,000 vehicles and reaching $420 million in annualised recurring revenue.
It has expanded organically and through acquisitions, including Kovi in Brazil and Tokyo Taxi in Japan. Moove also operates autonomous vehicle fleets in partnership with Waymo in Phoenix and Miami, with London expected to join its footprint.
The $2.1 billion valuation places Moove among Africa’s small group of tech unicorns, alongside Flutterwave, OPay, Moniepoint, Andela, Chipper Cash, Wave, Tyme, MNT-Halan and Interswitch.
The $250 million round is the largest single funding deal announced by an African startup this year, though EV mobility firm Spiro raised $270 million cumulatively across two separate rounds.
Heirs Life Assurance, the specialist life insurance company of Heirs Insurance Group, has appointed Pastor Jerry Eze as an Independent Non-Executive Director on its Board, effective August 10, 2026.
L – R: Tony Elumelu, Chairman, Heirs Life Assurance; Pastor Jerry Eze, incoming director, Heirs Life Assurance
The appointment reinforces Heirs Life Assurance’s commitment to expanding financial inclusion and accelerating insurance adoption by strengthening public trust, consumer education, and long-term financial resilience across Nigeria.
Despite being Africa’s largest economy, Nigeria’s insurance penetration remains below one percent – among the lowest globally – highlighting the need to expand financial protection and build greater public trust in insurance.
As Heirs Life continues to pursue its mission of making insurance accessible to every Nigerian, Eze’s appointment brings a unique perspective on community engagement, value-based leadership, and broad societal impact.
Pastor Jerry Eze is the Founder and Lead Pastor of Streams of Joy International Ministry, a growing multinational ministry with 34 branches across West Africa, Southern Africa, Europe and North America.
He is also the convener of the New Season Prophetic Prayers and Declaration (NSPPD), one of the world’s largest digital prayer platforms, reaching millions of people daily. Through his ministry and humanitarian initiatives, he has become one of Africa’s most influential voices, championing hope, compassion, and community transformation.
Beyond ministry, Eze is the Founder of the Jerry Eze Foundation, a faith-led philanthropy where he provides housing support and grants to vulnerable and underserved communities.
In 2026, he announced N1billion in grants to support young entrepreneurs across agriculture, technology, and manufacturing, further advancing enterprise development and economic opportunity.
Before entering full-time ministry, Pastor Jerry Eze built a career in development communications, serving as a Communications Specialist on a World Bank HIV/AIDS programme and with the United Nations Population Fund (UNFPA).
He holds a Bachelor’s degree in History and International Relations from Abia State University and a postgraduate degree in Business Administration from Enugu State University of Science and Technology.
Speaking about the appointment, Tony O. Elumelu, CFR, Chairman, Heirs Life Assurance, said: “Pastor Jerry brings an exceptional combination of integrity, influence, and a deep understanding of people and communities.
“As we continue our mission to democratise access to insurance, his insight will help strengthen consumer trust, deepen financial inclusion, and reinforce our commitment to protecting the financial future of millions of Nigerians.
“We are delighted to welcome him to the Board of Heirs Life Assurance and the broader family of Heirs Insurance Group.”
Commenting on his appointment, Pastor Jerry Eze said: “I am honoured to join the Board of Heirs Life Assurance at a defining moment for the insurance industry. Financial security empowers individuals, families, and businesses to pursue their aspirations with greater confidence and resilience.
“I look forward to working with the Board and Management to advance the company’s mission of making insurance more accessible, relevant, and impactful for every Nigerian.”
Heirs Life Assurance has become one of Nigeria’s leading specialist life insurance companies, ranking 7th on the Financial Times list of Africa’s fastest-growing companies.
It is one of the three insurance businesses of Heirs Holdings, the leading pan-African investment company, with investments across 24 countries and four continents.
Combining an omni-channel digital presence with physical branches spread across the country, Heirs Life continues to redefine life insurance through innovation, customer-centric solutions, and a commitment to making financial protection accessible to every Nigerian.
Heirs Insurance Group, comprising Heirs Life Assurance, Heirs General Insurance, and Heirs Insurance Brokers, collectively serves over 3 million people directly and indirectly.
The Group is championing financial inclusion and leading the digital insurance play in Nigeria, demonstrating its mission to democratise access to insurance.
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