EntrepreNEWS – In a bid to further encourage entrepreneurship in Nigeria, the Federal Government has reduced the cost of registering Small and Medium-scale Enterprises (SMEs) with the Corporate Affairs Commission (CAC) by 60 per cent.
This came on the backdrop of complaints by local entrepreneurs as regards formalising their business.
The announcement came during the epoch making 200 billion disbursement for the MSMEs in Nigeria at the 8th annual Micro, Small and Medium Enterprises’ finance conference in Abuja on Tuesday.
The conference, with the theme: ‘MSME financing in Nigeria: Past, present and future’, was organised to look at the MSME finance sub-sector from a holistic perspective.
The Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, said the directive for the reduction of the business registration costs was given by President Goodluck Jonathan, adding that the development underscored the importance of the sector to poverty reduction, job creation and inclusive growth.
He said since SMEs accounted for about 80 per cent of businesses registered with the CAC as well as contributing about 50 per cent to the country’s Gross Domestic Product, there was a need to remove all factors that would impede their development.
Aganga said, “The administration of Mr. President has made it a matter of importance to support MSMEs in certain key areas – access to affordable finance, which we are doing here today; access to markets, formalisation of businesses, skill acquisition, and provision of infrastructure to reduce the cost of doing business for SMEs.
“Already, the President has approved a reduction in the cost of setting up SMEs by 60 per cent and the idea is to reduce the cost of doing business. So, today, if you are going to the CAC to set up a company, then know that the costs have been reduced by 60 per cent already.”
He added that the N220bn facility, whose disbursement was inaugurated at the event by Jonathan, would help not only to empower the SMEs, but address the access to financing needs of the sector in an efficient and sustainable manner.
Jonathan, while speaking at the event, commended the Central Bank of Nigeria for providing the fund for the development of the sector at an interest rate of nine per cent.
He added that the decision of the bank to set aside 60 per cent of the fund for women was in line with his administration’s commitment to women empowerment.
The President said that MSMEs had been recognised globally as the engine of growth in any development-oriented economy.
He added that due to their inherent labour-intensive production processes, MSMEs were also providing a veritable platform for job creation.
Jonathan said “All over the developed world, the contribution of the MSMEs to GDP is on the average of about 47 per cent; this shows clearly how important the MSMEs are to us.
“With about 17.3 million SMEs in Nigeria, there is a need for more concrete and concerted efforts to expand the activities of the MSMEs in our country.”
He added that the focus of this year’s conference, which was aimed at enhancing access to finance, was appropriate and that a vibrant MSME sub sector was indispensable to achieving sustainable transformation of the Nigerian economy.