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Finance of Micro, Small & Medium Scale Enterprise in Nigeria
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Harnessing Nigeria’s Natural and Human Resources for MSMEs
Growth and Development
1Ekpenyong,
Orok Bassey
Abstract:
The Nigeria economy is abundantly blessed with natural and
human resources that can guarantee sustainable economic growth
and development. The country has a land area of 923,773 km2,
with varied vegetation and soil types that are suitable for a
variety of agricultural purposes. The River Niger and Benue
divides the country into three major geographical sections,
namely: West, East and North, and acting in synchrony with the
Lake Chad which provides the needed irrigation potentials for allyear-round farming activities. The country has large reserves of
solid mineral deposits including: bitumen, topaz, lignite, coal, tin,
columbine, iron ore, gym sum, barite and talc. Metallic mineral are
mostly found in the middle belt, coal is found in the South East
and Middle Belt, and Bitumen predominantly in the South West.
Crude petroleum and natural gas are prevalent in the Southern
area of the country referred to as the Niger Delta region. The
nations material endowment facilitates inter-regional trade within
the country, which is why Nigeria was a veritable source of raw
materials for industries in Europe, especially during the colonial
era and currently has a population of over 170 million people with
diverse cultural background and this makes the future of Nigeria
promising, which makes it Africa’s most populous country located
on the west coast of the continent.
Nigeria operates a
decentralized, democratic, federal system of government
comprising a federal capital territory (FCT), 36 states and 774
Local Government Areas, with huge untapped investment
opportunities in the MSMEs. The paper therefore offers
suggestions on how to effectively harness the nations natural
resources into a productive micro economic means via the
establishment and funding of various MSMEs which is the engine
of economic advancement.
Keyword: MSMEs, Natural and Human Resource.
1
Ekpenyong, Orok Bassey: Anambra-Imo River Basin Development Authority, Agbala,
Owerri, Imo State; 08037624425, [email protected]
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Introduction
The new global order reads that every decade – as generations shift, leaderships
transform , visions change , and creativity and innovation force us all to live our
lives better, longer, differently and certainly with more challenges. Today’s global
landscape is much, much different than it was 10 years ago, or even earlier this
year. Current economic trend of global change shows that Nigeria is the largest
economy in Africa and 26th in the world, with a population density of about 170
million, out of Africa’s population of 1.1 billion, which is on course to reach 2.4
billion people by 2050. Its current average yearly growth rate is 2.45 per cent,
which remains constant or even grows higher over the next decades, increasing
that to 2.4 billion number. The most significant figure, within the population
numbers is between the age bracket of (10-30) representing about 50 percent of
the region’s population now, and will cross over that percentage mark in the
next two decades, hence to effectively actualize the vision 2020
Entrepreneurship must become a household name in Nigeria, this is because
the white collar jobs that people clamor for are no longer there. Hence, the need
for Micro, Small and Medium Enterprises (MSMEs) becomes a reality as a means
of ensuring self independent employment creation, import substitution, effective
and efficient utilization of local raw materials and contribution to the economic
development of Nigeria. The Micro , Small and Medium Enterprises (MSMEs)
have been known, all over the world , to be engines of economic growth and
contributor to employment generation, wealth creation, poverty alleviation and
food security. Recent data provided by the National MSMEs collaborate survey
2010, put the Micro, Small and Medium Enterprises in 17,284,671 with a total
employment put at 32,414,884. Deliberate efforts must be put in place to grow
these numbers, if we must achieve our national vision of being amongst the 20
most industrialized nations by the year 2020. Where there is an inconsistency
between employment and asset base, employment criterion will prevail.
Definition of Terms
Entrepreneurship which is an aspect of MSMEs is defined as an innovative act,
which includes endowing existing resources for new wealth – producing capacity
(Afonja, B. 1999).
An Entrepreneur is an individual that identifies, develops and brings vision to
life under condition of risk and a consideration of risk and a considerable
uncertainty (Bashar, O .2005).



Entrepreneurial characteristic : There are trait that make an individual
an entrepreneur (Tonga,R.2009).
Business Performance : The success or failure of an enterprise (Tonga ,
R. 2009).
Resources : Within these context is divided into two (human and natural)
and considered as effectively harnessing of natures natural endowment
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and the population of a nation to the process of creating employment via
the establishment of Micro , Small and Medium Enterprise with an aim of
attaining economic growth and development.

Funding Agencies: These are government Parastatals/Agencies,
Development Banks, Private Organizations like Banks, NGOs which make
funds available in the form of grant, credit facilities to the industrialist or
entrepreneurs.

Micro Enterprise/College Industry: A firm or enterprise with a labour
size of not more than ten workers (1 – 10) or total cost (including working
capital but excluding cost of land) not more than two million naira (N2m)
and/or a turnover of less than four hundred thousand naira only
(N400,000.00).

Small Scale Enterprise: Industry with a labour size of between 11 – 100
workers or a total cost including working capital but excluding cost of
land) not more than fifty million naira only (N50m) and/or a turnover of
less than ten million naira only (N10m).

Medium Scale Enterprise: Industry with a labour size of 101 – 300
workers or a total cost including working capital but excluding cost of
land) of over fifty million naira only (N50m), but not more than two
hundred million naira only (N200m).

Large Scale Enterprises: Industry with a labour size of over 300 workers
or a total cost including working capital, but excluding cost of land of over
two hundred million naira only (N200m).
Abbreviations, terms and notation used in this study include but not
limited to the following:
o
A.C.G.S: Agricultural Credit Guarantee Scheme
o
NACRDB: Nigeria Agricultural Cooperative and Rural Development
Bank.
o
NASME: Nigeria Association of Small and Medium Enterprises
which is an umbrella of SMEs.
o
DFIs: Development Finance Institution, these are companies
involved in projects and development finance e.g. Bank of Industry
(BOI).
o
SMEs: Small and Medium Enterprises (SMEs).
o
SMEDAN: Small and Medium Scale Enterprises Development
Agency of Nigeria
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o
CBN: Central Bank of Nigeria that supervises other Banks.
o
NEEDS: National Economic Empowerment and Development
Strategy.
o
SEEDS: State Economic Empowerment and Development Strategy
o
NDE: National Directorate of Employment
o
NAPEP: National Poverty Eradication Programme.
o
MSME: Micro-Small and Medium Enterprises.
o
MAN: Manufacturers Association of
association of manufacturing companies.
Nigeria.
This
is
the
The Nigerian Economy in the 21st Century
The world is a global village, the Nigeria economy in the 21 st century are diverse
and enormous. The unacceptable state of Nigeria’s enormous endowment of
natural and human resources. This is more so given the fact that Asian
countries, such as Singapore and Malaysia, with similar colonial heritage and
attributed attendant thereto, and similar natural resource endowments, have
recorded significant successes in the development of their economies since 1965
when they were at par or even behind Nigeria. Singapore, some 30 years later
had a per capita income of some US $ 10,000; whilst that of Nigeria was US
$300. Nigeria’s economic decline, especially during the last 20 years is
illustrated by the fact that per capita income, which was US $1000 in 1965 had
declined to US $300 by 1998. Within some 18 years, Nigeria had declined from
being a low middle income country and amidst the fifty richest countries in the
world to one of the 30 percent. The major causes of the decline in Nigeria’s
economic fortunes have been political instability and bad governance, most
especially in the 1990s military rule in Nigeria, as been the case in most other
countries with prolonged military rule, led to economic and social stagnation
and decline. Similar, the advent of an elected government at the dawn of 21 st
century after almost three decades of military rule should afford Nigeria the
opportunity to arrest the decline in her socio-economic development and embark
on economic revival via giving priority to the establishment of MSMEs. Nigeria
economy since 1960 has facilitated technology, especially in communication,
during the last decade of lag and current indebted to various initiatives. A
survey carried out by SWEDAN and the National Bureau of statistics, shows that
there were 17.2 million MSMEs in Nigeria, employing over 32 million people.
“The survey shows that over 95% of registered businesses in Nigeria are small
businesses. If each of these businesses employs one more person, Nigeria would
create over 17 million extra jobs, which would indeed be a revolution in Nigeria’s
job markets. “This is unexplored power of small businesses”, and with a focused
developing country like Nigeria in becoming one of the leading world’s economic
engines Mr. President said; “ We currently rank as the topmost investment
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destination in Africa , the largest economy on the continent and amongst the top
10 fastest growing economies in the world as a result of MSMEs that employ
people directly , and they promote employment indirectly through creating
market opportunities and improvement market conditions. Nigeria is a blessed
country and our people are some of the most enterprising in the world as a
result of MSMEs. We are a nation with the 9th largest workforce in the world,
and some of the largest Diaspora networks which can be used to drive change
and development. Countries that achieved major job creation and poverty
alleviation through the use of MSMEs to address structural factors underlying
poverty and unemployment are countries with policies on extensive social
protection with active support to the diversification of their economies , inclusive
access to finance and employment – friendly Macroeconomic policies that
fostered both investment and consumption, such countries like USA , Asia
Tigers have policies that strengthen the capacity to develop their critical
ingredients of the short – term response to the finance and economic crisis , with
well – designed social protection system playing a leading role in enhancing
resilience , stabilizing aggregate demand and protecting the most vulnerable
groups , always excel in MSMEs . The World Bank in its 2014 Doing Business
report showed that Nigeria dropped to 147 the position from 138 in the previous
year while Singapore , Hong kong , New Zealand and United States were placed
1st , 2nd , 3rd and 4th respectively. Within the Sub – Saharan Africa region ,
Nigeria was ranked 20th , when Mauritius , Rwanda and South Africa ranked 1st
, 2nd and 3rd respectively. While the recent World Bank’s Doing Business report
examines the difficulty of establishing and running a Small or Medium sized
business as difficulties in abiding to local work laws and regulations, this,
perhaps, explains why there are more Micro and Small Enterprises in the
country. The demise of the soviet coupled with the increasing acceptance by
most countries, especially China and India, of market informed economic policy
especially during the last two decades of 20th century is transforming the world
into a global village. Nigeria in the process of making up for the substantial
ground she lost in her quest for development, especially in the last 20 years,
must do so within the context of a world economy characterized by some
significant features. These features include the following (a) Advances in
technology will continue at a rapid pace, and is more likely to be exponentially
rather than arithmetically (b) Investment in Science and Technology will become
more important than investment in equipment as investment in human capital
will become the major element of capital formation. (c) Information technology
will become main engine of economic growth. It will displace oil, just as oil
displaced steel in the second half of the last century, as the main engine of
economic growth. (d). Consumption of energy and primary raw materials per
unit manufactured out if put will continue to decline as a result of advances
technology and environmental forces. (e). Production will increasingly be
privately owned and protected by various forms of intellectual property rights. (f)
Increasing
advances in
information technology, especially
in
the
telecommunications sectors, will quicken the pace of globalization of finance and
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trade. (g). Environmental management, including conservation and protection,
will increasingly become a people driven rather than government driven process.
The integration of Nigeria into a technological beehive of 21 st century global
economy, within the shortest possible time , must be effected within the context
of a world economy dominated by globalization, liberalization and technology;
especially information technology.{B.J. St. Mattew-Daniel}.
MSMEs: An Engine of Economic Growth in Nigeria
The process of creating linkages between the productive sectors of the economy
through the use of knowledge so as to facilitate the formulation of policies which
will promote the adaptation and use of science and technology in production can
then be meaningfully implemented. Micro, Small and Medium Scale Enterprises
are Sub-sectors of the industrial sector which play crucial roles in industrial
development {Ahmed, S. 2006}. Several policies in the past which gave priorities
to entrepreneurship development. Indicating the trust in government policy in
support of MSMEs. The government of Nigeria identifies entrepreneurship
development as a major thrust to achieve economic development through
MSMEs growth and development. The prioritization of the MSMEs by
government at different level is echoed in almost every policy document at
National, State and at the local government to prioritize Micro, Small and
Medium Enterprise at different level. Targeted governance has been observed to
play a pivoted role in starting, growing and MSMEs in Nigeria, ( Beck , 2005 ;
Zainab, 2008 and Atino , 2001).Although some entrepreneurs in MSMEs have
received both financial and non financial assistance , many are still small or are
facing viability problems. In Nigeria, the MSMEs sector is failing to contribute
meaningfully to the national economy as was experience elsewhere when
governments advanced target support targeted to MSMEs was found to translate
into economic development in countries like Indonesia where MSMEs accounted
for 98% of employment and 78% to Gross Domestic Product (GDP) (Okoh ,
2009). The President of the Trade Union Congress Comrade Bala Kaigha stated
that the MSMEs are the bedrock of economic transformation and development
for both developed economies. MSMEs are important drive of growth in economic
transformation and development for both developing economies. MSMEs are
important drivers of growth in economies across Sub-Saharan Africa, accounting
for up to 90 percent of all business in these markets. No wonder there is now a
consensus amongst policy makers in developing and emerging economies that
MSMEs are a strong driving force for their industrial growth and development.
For this purpose, governments especially in developing economies are always
searching for the ways to assist MSMEs, which is the reason behind the Nigerian
government have tried to create several incentives to boost cement production,
stimulate Bio-fuel industry, including Investment Promotion and Protection
Agreement (IPPA), Free Trade zone to promote MSMEs as well as to attract
foreign direct investment to Nigeria. Noting that MSMEs in Nigeria are still
confronted with difficulties in operating environment as a result of poor state of
roads which increases the cost of transporting both raw materials and finished
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goods to and from markets. It is common to find the activities in the MSMEs
sector under constant threats from different organs of government as different
tiers of government collect regressive and multiple taxes and levies as well as
other unofficial fees from MSMEs. This probably is the reason for the three
major problems of MSMEs as captured by the Doing Business Report, which
are; getting electricity, registering property and paying taxes.
MSMEs Categorized into three
Micro
Small
Medium
Less than 10
10 – 49
50 - 199
Less than 5
5 – less than 50
50 – less than 500
MSMEs and their relevance to the Nigeria Economy
MSMEs – Generation of employment, Creation of potential entrepreneurs,
ensuring sound competition, mobilization of local resources, mitigation of ruralurban migration, wealth creation, income generation and poverty alleviation,
enabling adaptive technology and skill acquisition, production of intermediate
products for uses by large enterprises, creation of new industries.
MSMEs Contribution to GDP and Employment Globally



MSMEs in high income countries contribute 55% to GDP and over 65% of
total employment.
In middle income countries MSMEs and informal enterprises account for
over 70% of GDP and 95% of total employment.
In low income countries MSMEs and informal enterprises account for over
60% of GDP and over 70% of total employment. {World Bank database, an
excerpt from Google.}
Details on the Nigerian MSME Survey
The Survey was conducted in all 36 states of Federation including the
Federal Capital Territory, Abuja. Divided into Household, Agriculture and
Business components. Over 300 Micro Enterprise households per state were
visited while 4000 Small and Medium Enterprises cutting across 12 sectors
of the economy were covered.
Enterprise group
Company size
Employee
NISH
Small
1-9
NISE
Medium
10-49
Acronym interpreted: - NISH {National Integrated Survey of Household}.
NISE {National Integrated Survey of Enterprise}.
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In 2012 Nigeria GDP grew by 6.17% surpassing the forecasted 5.34%,
MSMEs account for 46% of Nigeria GDP (2010) and contributes to GDP by
sector , for instance MSMEs contributes 99.13% of real estate , renting and
related business activities to GDP while 98.01 of GDP is contributed by the
Agricultural Sector. Total estimated to be 17,284,671 MSMEs which
accounts for 99.87% of the MSMEs in Nigeria with 17.26 million enterprises.
Lagos state has the highest number of SMEs totaled 4,535 while Osun state
has the least which is a hundred. Lagos state has the highest number of
Micro Enterprises of 880,805 number, followed by Kano state with 872,552,
while FCT recorded the least with a total sum of 272,579. The total number
of persons employed by the MSMEs sector as at December 2010 stood at
32,414,884. (Source: CBN Statistical Bulletin).
Contemporary Development Challenges of the MSMEs Sector
Poor access to affordable finance leading to inadequate working capital. Lack of
work space. Poor access to both local; Regional and international markets
leading to poor business turnover. Obsolete technology leading to inability to
compete globally. Inadequate government support and encouragement. Weak
infrastructure leading to high cost of doing business.
Others includes: Absence of patent right and unprotected intellectual property
rights. Low capacity utilization. Non insurance of business risk. Non-effective
implementation of the National policy on MSMEs. Poor management of business
operation due to lack of business management skills. Administrative barriers in
doing business, multiple permits and fees are required at the state level.
Absence of general rating scheme and Non-availability of qualified artisan(skillgap).
Small Scale Industries have been facing plethora of financial problems that
emanate from the absence of collateral security, high rate of business failure;
low productivity; Poor management and effect of activities of Small Scale
Industries have not been felt by these drawbacks, the Nigerian government has
been using the annual budgets and specialized agencies such as the Small and
Medium Enterprises Development Agency of Nigeria (SMEDAN). The product of
these small scale industries have not even contributed to the growth of the
Gross Domestic Product of the country. (OLUBI 1998) The import restriction of
the Federal Government have not affected the operations of these industries in
line with the above.
Government Past Efforts at Addressing these Challenges
The establishment of Industrial Development Centre (IDCs) in the 1960s. The
establishment of NDE (National Directorate of Employment) in 1989. The
establishment of the Bank of Industry (BOI) in 2001 from the defunct Nigeria
Industrial Development Bank (NIDB) and the Nigeria Bank for Commerce and
Industry (NBCI). The establishment of the Small and Medium Enterprise
Development Agency of Nigeria (SMEDAN) via SMEDAN Act 2003. The launching
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of the Micro-finance policy , Regulatory and Supervisory framework for Nigeria
in 2005 which resulted in the establishment of Micro- Finance Banks.
Others Include: The N200 Billion intervention fund for re-financing and
restructuring of Banks’ loan to the manufacturing sector. The establishment of
N200 Billion Small and Medium Enterprise Credit Guarantee Scheme (SMECGS)
in 2010 by the Central Bank of Nigeria. The Agriculture Credit Guarantee
Scheme Fund (ACGSF) Launched in 1977. The Nigeria Incentive based risk
scheme fund (ACGSF) launched in 1977. The Nigeria incentive based risk
sharing system (NIRSAL) for agricultural lending launched in 2011. The National
Economic Reconstruction Fund (NERFUND) was set-up in 1989 to catalyze the
MSMEs sectors growth and long term funding. The N100 billion bond – funded
cotton, textiles and garment industry revival scheme. The Bank of Agriculture
has emerged from the Nigeria Agricultural, Cooperative and Rural Development
Bank (NACRDB). (CBN Bulletin).
Facilitating and guaranteeing external finance through the World Bank, Africa
Development Bank (AFDB), International Finance Corporation (IFC) and other
international Institutions willing and capable of assisting MSMEs. Marching
funds from big entrepreneurs by BOI such as the N5 billion by Aliko Dangote.
Marching funds from states by BOI. Youth Enterprise with Innovation In Nigeria
(YOUWIN).(Extracted from Google).
Trans – Administrative Policy Coherence as concern MSMEs.
Manifesto and Buhari’s Vision for Nigeria: Securing our Nation, prospering our
people, to change politics and governance, Security and Conflict Resolution, The
Economy and Infrastructure base, The Society and Human Capital
Development. Every country has its “lost generation”. Some were stolen away by
war, some by economic downturns, and some by government. Top on the list of
his priorities are road construction, employment, regular power supply and
fixing ecological problems. Addressing supporters at Etche Road Primary School
play field in Abia, Abia State, the APC candidate said the Southeast would be
accorded a prime of place in the provision of electricity as part of the strategy to
boost its economy. Acknowledging the enterprise of the people of the zone, he
pledged financial assistance for the Micro Small and Medium Scale Enterprise
(MSME) to enable entrepreneurs grow their businesses and, by extension, the
national economy. The main concern of his administration is that there are no
idle able-bodied persons roaming the streets and becoming touts. We want to
encourage the financial institutions to empower the small scale industrialists by
giving soft credits. Qualified, competent, patriotic Nigerian will be employed to
manage each Ministries so that competent and qualified Nigerians will get jobs
and opportunity to perform. Speaking in another rally in Abakaliki, capital of
Ebonyi State, Gen. Buhari promised to end the importation of rice and other
food items into the country, calling Ebonyi one of Nigeria’s food baskets, and
said: “If your farmers are properly empowered, we don’t need to import rice into
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the country again.” He added: Everybody knows the ingenuity of the Igbo man.
We will empower you to do more in this area by providing constant electricity to
the zone and the entire country. We are going to make this country secure and
promises to industrialize the South- East and make the country one of the most
industrialized nation in the world. {Excerpt from General Buhari’s speech in
Ebonyi state}.
Jonathan on March 25 , 2015 officially launched the development Bank of
Nigeria (DBN) , that will disburse up to N300 billion in support of Medium and
long term lending. Loans will have duration up to 300 billion in support of
medium and long term lending. Loans will have duration of up to 10 years and
moratorium period of up to 18 months , which is to enable Micro , Small and
Medium Enterprises (MSMEs) , a breathing period they start to repay and also
allow them to match loans term investment cycles. The President noted that the
Micro , Small and Medium Enterprises have always been the backbone of the
nation’s economy, pointing out that the sector has never had the opportunity of
accessing cheap funds for its development. Disclosing that the nation had over
32 million people while contributing over 45 percent to the Gross Domestic
Product (GDP). According to him, existing developmental institutions in the
country , including the Bank Of Industry (BOI) and other commercial banks
cannot satisfy the following needs of the MSMEs have the establishment of DBN.
Access to long term finance has been a challenge for the MSMEs cannot get long
term funds from banks and other financial institutions, forcing them to spend
on personal savings, friend and family for loans. These loan are typically short
term and come at a high interest rate, thereby stemming the growth of these
businesses and making it clear that the inadequacies of the Bank of Industry
(BOI) and Bank of Agriculture (BOA) necessitated the establishment of the DBN.
Access to long-term finance has been a challenge for the MSMEs. Getting long
term finance has been a challenge for the MSMEs. Most MSMEs cannot get long
term funds from banks and other financial institutions, forcing them to spend
on personal savings, friends and family for loans. These loans are typically short
term and come at a high interest rate, therefore stemming the growth of these
business. Jonathan said that the inadequacies of the nation’s Commercial Bank
and other development banks, including the Bank of Industry (BOI) and Bank of
Agriculture (BOA) necessitated the establishment of DBN. The above is a prove
of trans- administrative policy coherence, irrespective of political party difference
, the acceptance of defeat by President Jonathan , is a show of democratic
advancement in Nigeria. Hence, there is a hope of continuity which makes
practicing true democracy a yardstick for economic development. (Excerpt from
President Jonathan’s speech on March 25, 20015).
Lesson from Singapore: The Entrepreneurial Capital of the World.
Singapore Independence
For over a hundred years, Singapore was under British control. But when the
British failed to protect the colony from the Japanese during World War II, it
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sparked a strong anti-colonial and nationalist sentiment that subsequently led
to their independence. On August 31, 1963, Singapore seceded from the British
crown and merged with Malaysia to form the Federation of Malaysia. Although
no longer under English rule, the proceeding political ideologies were being
threatened by the growing Chinese population throughout the island and
peninsula. Therefore, as a way of ensuring a Malay majority within Malaysia
proper and to phase out communist sentiments within the country, the
Malaysian parliament voted to expel Singapore from Malaysia. Singapore gained
formal independence on August 9, 1965, with Yusof bin Ishak serving as its first
president and the highly influential Lee Kuan Yew as its Prime Minister. Upon
independence, Singapore continued to experience problems. Much of the citystate's, three million people were unemployed. More than two-thirds of its
population was living in slums and squatter settlements on the city's fringe. The
territory was sandwiched between two large and unfriendly states in Malaysia
and Indonesia. It lacked natural resources, sanitation, proper infrastructure,
and adequate water supply. In order to stimulate development, Lee sought
international assistance, but his pleas went unanswered, leaving Singapore to
fend for itself.
Globalization in Singapore
During colonial times, Singapore's economy was centered on entrepôt trade. But
this economic activity offered little prospect for job expansion in the postcolonial period. The withdrawal of the British further aggravated the
unemployment situation. The most feasible solution to Singapore’s economic
and unemployment woes was to embark on a comprehensive program of
industrialization, with a focus on labor-intensive industries. Unfortunately,
Singapore had no industrial tradition. The majority of its working population
was in trade and services. Therefore, they had no expertise or easily adaptable
traits in the area. Moreover, without a hinterland and neighbors who would
trade with it, Singapore was forced to look for opportunities well beyond its
borders to spearhead its industrial development. Pressured to find work for their
people, the leaders of Singapore began to experiment with globalization.
Influenced by Israel's ability to leap over its Arab neighbors who boycotted them
and trade with Europe and America, Lee and his colleagues knew they had to
connect with the developed world and to convince their multinational
corporations to manufacture in Singapore. In order to attract investors,
Singapore had to create an environment that was safe, corruption- free, low in
taxation, and unimpeded by unions. To make this feasible, the citizens of the
country had to suspend a large measure of their freedom in place of a more
autocratic government. Anyone caught conducting narcotic trade or intensive
corruption would be met with the death penalty. Lee's People Action Party (PAP)
repressed all independent labor unions and consolidated what remained into a
single umbrella group called the National Trade Union Congress (NTUC), which
it directly controlled. Individuals who threatened national, political, or corporate
unity were quickly jailed without much due process. The country's draconian,
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but business-friendly laws became very appealing to international investors. In
contrast to their neighbors, where political and economic climates were
unpredictable, Singapore on the other hand, was very predictable and stable.
Moreover, with its advantageous relative location and established port system,
Singapore was an ideal place to manufacture out of. By 1972, just seven years
since independence, one-quarter of Singapore's manufacturing firms were either
foreign-owned or joint-venture companies, and both the U.S. and Japan were
major investors. As a result of Singapore's steady climate, favorable investment
conditions and the rapid expansion of the world economy from 1965 to 1972,
the country's Gross Domestic Product (GDP) experienced annual double-digit
growth. As foreign investment poured in, Singapore began focusing on
developing its human resources, in addition to its infrastructure. The country
set up many technical schools and paid international corporations to train their
unskilled workers in information technology, petrochemicals, and electronics.
For those who could not get industrial jobs, the government enrolled them in
labor intensive un-tradable services, such as tourism and transportation. The
strategy of having multinationals educate their workforce paid great dividends
for the country. In the 1970s, Singapore was primarily exporting textiles,
garments, and basic electronics. By the 1990s, they were engaging in wafer
fabrication, logistics, biotech research, pharmaceuticals, integrated circuit
design, and aerospace engineering.(Excerpt from Google).
Singapore Today
Today, Singapore is an ultra industrialized society and entrepôt trade continues
to play a central role in its economy. The Port of Singapore is now the world's
busiest transshipment port, surpassing Hong Kong and Rotterdam. In terms of
total cargo tonnage handled, it has become the world's second busiest, behind
only the Port of Shanghai. Singapore's tourism industry is also thriving,
attracting over 10 million visitors annually. The city-state now has a zoo, night
safari, and a nature reserve. The country recently opened two of the world's
most expensive integrated casino resorts in the Marina Bay Sands and the
Resorts World Sentosa. The country's medical tourism and culinary tourism
industries have also become quite marketable, thanks to its mosaic of cultural
heritage and advance medical technology. Banking has grown significantly in
recent years and many assets formerly held in Switzerland have been moved to
Singapore due to new taxes imposed by the Swiss. The biotech industry is
burgeoning, with drug makers such as GlaxoSmithKline, Pflizer, and Merck &
Co. all establishing plants here, and oil refining continues to play a huge role in
the economy. Despite its small size, Singapore is now the fifteenth largest
trading partner of the United States. The country has established strong trade
agreements with several countries in South America, Europe, and Asia, as well.
There are currently over 3,000 multinational corporations operating in the
country, accounting for more than two-thirds of its manufacturing output and
direct export sales. With a total land area of just 433 square miles and a small
labor force of 3 million people, Singapore is able to produce a GDP that exceeds
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$300 billion dollars annually, higher than three-quarters of the world. Life
expectancy is at an average of 83.75 years, making it the third highest globally.
The corruption minimal and so is the crime. It is considered to be one of the best
places to live on earth, if you don't mind the strict rules. Fifty years ago, the citystate of Singapore was an undeveloped country with a GDP per capita of less
than US $320. Today, it is one of the world's fastest growing economies. Its total
capital has risen to an incredible US $60,000, making it the sixth highest in the
world based on Central Intelligence Agency figures. For a country that lacks
territory and natural resources, Singapore's economic ascension has proven that
it is possible to become a world economic power without having a natural
resources ,but with economic integrity, development can be attained.
Singapore's economic model of sacrificing freedom for business is highly
controversial and heavily debated. But regardless of philosophy, its effectiveness
is certainly undeniable.(Lee kuan Yew , Third World to First World).
Way forward:
 Nigerians should emulate Singapore by sacrificing freedom for business
as same will pay off at the long run.
 MSMEs clubs should be established in all Colleges, Universities and
Polytechnics in Nigeria.
 Initiatives by previous administration should be sustained by the current
administration.
 The government should establish the National credit guarantee scheme
for MSMEs subsector in Nigeria.
 Renewed commitment by all tiers of government to drive the overall
development of the MSMEs sub-sector in Nigeria.
 Establish a comprehensive National MSME policy information and
database.
 Pump more funds into infrastructure development through PPP and
ensure value for money.
 Effective implementation of the National policy on MSMEs.
 Deliberate incentives should be put in place for the development of
MSMEs as is done in other jurisdictions e.g , equipment incentive ,
technology incentive ,marketing incentive and National Awards for
MSMEs incentive.
 Promote and develop the venture capital sector and other forms of making
funds available at affordable rates including listing on the stock
exchange.
 Undertake transformational projects that will take MSME development to
specific sectors and rural areas.
 The idea of development bank which was launched by the Jonathan’s
administration should be sustained by the current administration.
 Remove barriers to access finance, effective BDs and increased
productivity.
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Finance of Micro, Small & Medium Scale Enterprise in Nigeria

Many Economists developed and developing have come to realize the
value of Small Scale Industries, they are seen to be characterized by
Dynamism Witty Innovation, efficiency and their Small Size allows faster
decision making process. The findings are that product of Small-Scale
Industries significantly contribute to the Gross Domestic Product of
Nigerian Operations of small scale industries or significantly affected by
the import restriction based on the findings of this research, the study
recommends that Government should review the nations and map out
strategies to prevent the small scale entrepreneurs from total collapse,
managers of Small Scale should ensure efficient planning at the idea
stage to minimize future programs that may occur.

The importance of Small Scale business to Nigeria can only be fully
appreciated when one realizes the dominant roles it plays in our economic
development (Nwana 1995). The Small Scale Enterprises are the mainstay
of the Nigerian economy. Providing almost seventy percent of the
employment to able men and women in the society. Before the
introduction of Nigerian Enterprises Promotion decree of 1972, most
business both Small and Big were managed by foreign experts, the role of
fund to existing and newly established business organization cannot be
over emphasized because it serves as a pivot upon which the success of
any organization rotates. In order to provide adequate fund, the Small
and Medium Scale Industries’ Equity Investment scheme requires all
Commercial and Merchant Banks to commit 10 percent of their annual
Pre-tax profit to the funding of the equity investment in Small and
Medium Scale Industries (The Guardian September 15, 2004 p. 50).

A business whether Small or Big, Simple or Complex, Private or Public is
created to provide competitive prices. Business in Nigeria has been
classified as Small, Medium and Large. In both the developed and
developing countries, the government is turning to Small industries as a
means of economic development and a veritable means of solving
problems. MSMEs should be seen as a seedbed of innovations, inventions
and employment.

Presently in Nigeria, MSMEs assist in promoting the growth of the
country’s economy, hence all the levels of government at different times
have policies which promote the growth and sustenance of MSMEs. Small
Scale Industry Orientation is part of the Nigerian history. Evidence
abound in the communities of what successes the great grandparents of
Nigeria, made of their respective trading concerns, yam barns, cottage
industries, and the likes. The secret behind the success of a self reliant
strategy does not lie in any particular political philosophy, so much as the
people’s attitude to enterprise and in the right incentive adequate enough
to make risk worthy business a necessity for the nation. There had been
many policy actions by the government, governmental agencies and the
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MSMEs Growth and Development
Finance of Micro, Small & Medium Scale Enterprise in Nigeria
private sector to promote MSMEs in Nigeria, but patronizing made in
Nigeria products should be the focal point.
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Integrity is everything and should be the culture of any Entrepreneur in
Nigeria.
The natural resources of Nigeria must be harnessed to efficient MSME
usage.
In order to actualize Nigeria’s dream of a robust MSMEs, the Federal
Government’s of Nigeria Enterprise Development Programme {NEDEP}
should enforce the provision of a National template to address critical
issues faced by the small businesses.
NEDEP should play a role to ensure that MSMEs in the country are
bankable and viable enough to access fund and other MSMEs fund
available.
Power sector reforms remain on course, the reduction of corruption
through transparent processes with no wriggling room for discretion,
immediate elimination of multiple taxes as well as the simplification of the
process of registering property.
Where fiscal incentive in form of tax reliefs, import restrictions and
prohibitions are adopted, they should have a sunset clause after which
the industry will be opened to competition.
MSMEs owners should constantly engage themselves in capacity building
to enable them run their business in line with global standards. {Peter
Esele, Past President of Trade Union Congress.}
MSMEs needs support from all stakeholders in order to operate optimally
amidst the current global and financial crisis.
Corruption should be reduced to the barest minimal to enhance MSMEs
growth.
Policies should be made by the government to curb piracy to the barest
minimal to enhanced profit maximization and sustainable growth.
Nigeria’s resource abundance should be turned to resource blessing via
effectively harnessing the nation’s natural resources into a productive
means.
Nigeria should be rebranded as an MSME driven economy, hence a need
for the government to provide infrastructural development, social
amenities and security as these are the requisite requirement for
economic development.
MSMEs should be taxed less for an effective productivity and growth.
Awards should be given to successful young entrepreneur inform of cash
prizes and tax waiver
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Ekpenyong, Orok Bassey: Harnessing Nigeria’s Natural and Human Resources for
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Finance of Micro, Small & Medium Scale Enterprise in Nigeria
Conclusion
The study though limited to harnessing the Nigeria’s natural and human
resources for MSMEs growth and development, their were no much record made
available to the assessment of the impact of MSMEs and their measures of
development in Nigeria. Though, MSMEs sector provides the platform for
opening the country to global competitiveness, prosperity and economic
advancement; the research was limited to inaccessibility of records from the
funding institutions like Banks and Government Agencies. The desired records
to ascertain the quantum of grants or subvention or loan guarantee offered to
the operators of MSMEs were not made available by the relevant stakeholders.
Time of survey were limited in terms of data collection. All sampled population
could not meet all the needed information within the stipulated period; and
during the survey period , the level of cooperation varied from one entrepreneur
to another. There is however a belief that natural resource richness must have a
positive impact on economic growth , since resource abundant economies are
able to accumulate infrastructure and human capital more (Sachs and Warner,
1999: Murphy.. Shleifer, and Vishny. 2000). The Natural resource abundance in
Nigeria should rather be a blessing rather a curse.
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Lederman, D. and William F. M (2007). Natural Resources : Neither curse nor
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