Nigeria's SMEs look to ICT to overcome challenges
- Published on 03 June 2015
A report on Nigeria and the role of technology in empowering SMEs, produced by the Economist Intelligence Unit and sponsored by mobile communications infrastructure services provider IHS Towers, finds that the local tax system and access to finance represent ongoing challenges for SMEs, along with deficits in mobile networks, transport and power.
The report, Enabling a more productive Nigeria: Powering SMEs, was launched today.
A media release from IHS Towers says the report outlines factors that empower small and medium enterprises and "looks to identify both what is driving growth as well as issues that are holding them back."
"The Report.... looks at SME productivity across five categories – policy, transport, technology, energy and finance, combining SME interviews from across the country, with expert insights," says the release.
Findings of the EIU report suggest that while transport projects and power privatisation are underway, these will take time to deliver benefits.
ICT is being used for remote work, mobile marketing and new product development such as apps and mobile services, the statement continues.
The tax system is raised as a challenge for SMEs. "Nigerian SMEs are subject to complex and overlapping rules which need to be streamlined and simplified. In addition, import and customs charges are often unpredictable and costly, placing an additional burden on businesses, with no recourse available through official channels."
Another challenge impacting on SME productivity, according to the release, is access to finance – described as "a long-standing problem". The report suggests that SMEs strengthen accountancy practices and corporate structures, and that "banks hire more SME business experts, as they are frequently missing opportunities to participate in home-grown success stories."
Nigeria is IHS' biggest market and home to 15 000 of the 25,000 telecommunication towers (both managed and self-constructed) within the company's portfolio.
Issam Darwsh, executive vice chairman and IHS Towers Group CEO, said: "Many of us are invested in Nigeria's future prosperity, yet little is known about the universe of Nigerian SMEs and the entrepreneurs behind them, particularly the obstacles and enablers of their growth.
This report recognises the efforts of government institutions in supporting SMEs but also importantly shines a light on the innovative thinking embedded in this vital part of Nigeria's economy. It helps us all to understand what can be done to support their growth and drive their productivity."
Darwish says the study reaffirms the company's belief that mobile network contributes directly towards urban and rural business growth.
"The importance of mobile telecommunications and its role as a leapfrog technology is readily apparent from this study, affirming our belief that an enhanced mobile network materially contributes to the growth of both urban and rural businesses, with the potential to reduce societal inequality. For example, a way to lessen the urban-rural digital divide is to deepen the application of mobile to agriculture, the sector in which the majority of Nigeria's rural dwellers work. Combined with improved mobile networks in rural regions, the penetration of ICT across wider geographies will significantly support favourable income distribution trends throughout the continent."