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SMEs key to global economic growth – Obi

Obi with Prime Minister of Bangladesh, H. E Sheikh Hasina, and other officials at the event.

To harness the full contributions and impacts of SMEs, Obi called for reforms such as proper formalization and internationalization to address the identified challenges

By Valentine Amanze

The Labour Party (LP) Presidential candidate in the 2023 general election, Mr. Peter Obi, has said that Small and Medium Enterprises (SMEs) were very vital to global economic growth.

 He explained that the SMEs drive the global economy through job creation, innovation, and domestic investment.

Obi spoke at a global conference organized by the Bangladesh Government in conjunction with the Commonwealth Enterprise and Investment Council, in Dhaka, Bangladesh at the weekend.

The LP flagbearer said at the international conference explained: “World Bank records (2020), show that SMEs account for roughly 90 percent of businesses and more than 50 percent of jobs created globally. While formal SMEs contribute up to 40 percent of national income (GDP) in developing and emerging markets (DEMs), their impact and contribution are significantly higher when informal ones are included (World Bank, 2020).

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‘‘In Bangladesh, SMEs contribute about 40 percent to GDP, in Nigeria 48 percent and China 60 percent with about seven out of every 10 formal jobs created by SMEs.

“It has the same immense impact in India where SMEs account for over 40 percent of the total workforce.”

The Anambra State former governor also urged the Commonwealth nations to pay special attention to small businesses, which he said, had proven to be the fulcrum upon which sustainable and inclusive growth and development could be achieved across  Commonwealth countries.

 “If we enhance the functionality and impacts of SMEs across Commonwealth countries through formalization and internationalization, we would have done it across the world with lives, communities, and economies positively impacted. 

“Endowed with a population of about 2.5 billion people, a home to over a billion young consumers and exports of over $1 trillion, the need for better support for SMEs cannot be over-emphasized,” he said.

Obi pointed out that small businesses, especially in developing and emerging markets, face many challenges arising from a lack of formalization and internationalization.

He revealed that many small businesses were not registered and licensed and lack international affiliations, export less than large companies, and barely exploit the benefits of international trade, which limits the growth opportunities of both the SMEs and the countries.

To harness the full contributions and impacts of SMEs, Obi called for reforms such as proper formalization and internationalization to address the identified challenges.

“Formalization involves bringing SMEs into the formal economy through registration of their businesses and complying with legal and regulatory requirements.

“Expectedly, the process of formalization will be beneficial not only to the SMEs but the overall business environment and economic stability as significant segments of SMEs operate in the informal sector due to a lack of resources or awareness of the formalization benefits.”

On the sidelines of the conference, Obi also held a meeting with the Prime Minister of Bangladesh, H. E Sheikh Hasina, where he congratulated her and her team for what they have achieved in their nation, with the support of SMEs in the last 15 years.

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