SMEs At The Heart Of Inclusive Growth and Job Creation

channels logoNigeria has been selected to host the 24th edition of the World Economic Forum on Africa (WEF) between 7 – 9 May 2014 in Abuja with the theme – Forging Inclusive Growth, Creating Jobs

We need economic growth to pay for the things we need in life – education, health, housing, roads. But how to ensure that growth benefits everyone, without further widening inequality and exclusion?

Headline economic growth is not enough. Deliberate policies to reduce inequalities and promote inclusion are now needed more than ever before. Inclusive Growth refers both to the pace and pattern of growth, which are interlinked and must be addressed together. Rapid pace of growth is unquestionably necessary for substantial poverty reduction, but for this growth to be sustainable in the long run, it should be broad-based across sectors, and inclusive of the large part of a country’s labour force.

Our experience tells us that the only way to achieve this sustainable growth is through tapping into the many innovations of the private sector, particularly Small and Medium Enterprises (SMEs). Already, SMEs are the engine of growth in many African economies. A study by the AfDB recently found that SMEs contribute more than 33% to GDP in African economies, while estimates from the ILO suggest SMEs provide two thirds of all formal jobs in developing countries and up to 80 per cent in low-income countries.

That was the focus of my discussion during my interview on Channels TV, along with The Director, Finance and Investment of the Tony Elummelu Foundation, Mr Tony Nwanze, and The Academic Director Owner-Manager Program of the Lagos Business School, Mrs Henrietta Onwuegbuzie, where we discussed the need for Impact Investment with regards to the WEF theme. Impact investors are investors who want to fund businesses for financial returns and social impact. Impact investing might seem to an obvious topic of common interest amongst the investor community in Africa, given the massive unemployment challenge and growing social inequities despite what is an incredibly positive growth picture.

For SMEs to thrive thereby promoting inclusive growth, creating jobs, infrastructure issues have to be sorted out. Hence, these infrastructure opportunities should be showcased at the WEF to help our people and our economy. We need to urge foreign and local investors to take the bold step of investing in Nigeria, despite the risks on ground. In every market there are risks. What one needs to do is to price the risk into the investments made but it doesn’t mean one cannot make a return.

My final advice for SMEs to survive in our current market is to  “identify your market, and develop a business model that can work in the environment that you are in.”

What are your thoughts?

 

 

To your success,

Olanrewaju Oniyitan






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