PwC MSME Survey 2020 slide image

PwC MSME Survey 2020

S Foreword PwC MSME Survey 2020 PwC Uyi Akpata Country and Regional Senior Partner PwC Nigeria Taiwo Oyedele Fiscal Policy Partner and West Africa Tax Leader PwC Nigeria The MSME sector is the growth engine of any economy contributing to its development, job creation and export amongst others. According to the World Bank, MSMEs represent about 90% of businesses and more than 50% of employment worldwide. Formal SMEs contribute up to 40% of national income (GDP) in emerging economies. The latest SMEDAN/NBS MSME Survey indicates Nigeria's SMEs contribute nearly 50% of the country's GDP and account for over 80% of employment in the country. No doubt, the sector is pivotal to Nigeria's growth including reducing poverty levels. However, the sector continues to be weighed down with challenges which ultimately impact the nation's growth. PwC's MSME Survey 2020 is aimed at gauging experiences of sector players, assessing the underlying issues which MSMEs face and providing insights on this strategically important sector. The theme of this publication is "Building to Last: Navigating MSME growth and sustainability in a New Decade." You will find the survey headlines ascertain some persistent problems, shed light on those you never really considered to be issues such as payment policies and the one on one interviews with business CEOs inspiring. One of the findings we found provoking was how payment policies imposed by big corporates severely affect 33% of MSMEs whose payments were delayed for more than a month. The impact on cash flows is worse when you consider the double digit interest rates or inflation. It does not come as a surprise then when about 50% of the SMEs surveyed did not record growths above 20% over the last 3 years. It is important to note that the survey was conducted prior to the COVID-19 pandemic. In the aftermath of the pandemic and as we enter an age of disruptions to traditional business models, traditional approaches to doing business in Nigeria surely must change. Does the Nigerian environment offer a platform that ensures Nigerian SMEs remain competitive? Will there be a ready workforce that can support the much needed advancement for SMEs? Or will we witness a slow down for decades following the pandemic? It is of uttermost importance that an inclusive approach is embraced to advance MSME growth and Nigeria's competitiveness. As part of our efforts in this national discourse, PwC Nigeria has established the SME Desk to support the growth, sustainability and development of the SME sector in Nigeria. The SME Desk is our social impact initiative to support small businesses by providing insights, advice and support on a range of areas including Finance and Accounting, Tax and Audit. It is one of the ways we are helping to build a stronger economy by giving small businesses a greater chance to succeed in an often difficult environment. We hope you find this report invaluable and that the insights within will help SMEs, ministries, agencies and the Government authorities take our SMEs to the next growth phase in the new world. June 2020 3
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