Small and medium‑sized enterprises (SMEs) will only scale sustainably
if Nigeria confronts structural constraints around power, skills, and
access to finance according to panelists at the Nigeria Business Summit
2026, during a session titled ‘The SME Economy: Advancing Trends and
Opportunities’.
The session brought together perspectives from business operators,
policymakers, and SME development institutions to examine why many
enterprises remain trapped in survival mode and what must change to
unlock growth at scale.
Cost pressures continue to define the SME reality
Speaking from the front line, Mr. Innocent Orji Egwuonwu, Managing
Director of Ojay’s International, said operating conditions remain
deeply challenging for Nigerian SMEs, particularly those in
manufacturing.
“Access to finance and power are the two biggest constraints,” he
said. “Interest rates of over 30 per cent make it very difficult for
SMEs to survive, and collateral requirements are often unrealistic for
young businesses.”
Egwuonwu noted that power costs alone can wipe out margins. “Diesel is
now about ₦1,820 per litre. In my business, we spend over ₦1 million
every week just generating power,” he said, adding that such costs
directly limit expansion and job creation.
Beyond energy, Egwuonwu highlighted the burden of multiple taxation,
calling for clearer and harmonised tax assessments to help SMEs plan and
operate with certainty.
Formalisation remains the gateway to opportunity
From a policy and institutional perspective, Mr. Charles Odii, Director
General of the Small and Medium Enterprises Development Agency of
Nigeria (SMEDAN), identified formalisation as the single biggest
structural gap holding SMEs back.
“There are about 40 million MSMEs in Nigeria, but many are not
captured in any system,” Odii said. “If a business is not
registered, it is invisible, and when you are invisible, you cannot
access finance, incentives or structured support.”
Odii explained that many SMEs cite access to finance as their main
challenge, but that formalisation often determines whether financing
becomes possible in the first place. SMEDAN, he said, is addressing this
through cluster‑based models that reduce individual collateral
requirements and provide zero‑interest or blended financing at scale.
The state’s role in lowering the cost of doing business
Providing a state‑level policy lens, Mr. Christian Udechukwu,
Commissioner for Trade and Industry, Anambra State, argued that SME
growth accelerates when governments actively remove cost pressures.
“In Anambra, we focus on putting money back in the pockets of SMEs,”
he said; pointing to free education, targeted tax relief, improved road
infrastructure, and procurement policies that prioritise locally
produced goods.
Udechukwu added that partnerships with financial institutions,
development finance institutions, and agencies like SMEDAN allow SMEs to
access funding of up to ₦10 million without traditional collateral;
using cooperative and guarantee‑based structures.
“These interventions are not just about finance,” he said. “They
are about creating an environment where SMEs can think beyond survival
and begin to scale.”
Fixing one constraint: Where panelists agree
When asked which single intervention would unlock growth fastest,
perspectives converged around three interconnected levers: power,
people, and finance.
Egwuonwu was unequivocal, he said “If one thing must be fixed, it is
power. “Once power is stable and affordable, everything else becomes
easier.
Odii pointed to the interdependence of constraints. “SMEs told us
their three biggest problems are power, people, and finance,” he said;
noting that interim solutions such as shared infrastructure,
solar‑powered clusters, and logistics partnerships help reduce
immediate pressures, even as long‑term reforms take shape.
Udechukwu emphasised skills as the fastest accelerator. “Finance
without skills fails,” he said. “Skills drive productivity, improve
bankability, and make enterprises resilient.”
From discussion to action
The discussion underscored that SMEs seeking to scale must begin by
formalising their operations, as registration remains the gateway to
finance, partnerships, and structured support. Managing exposure to
operating costs, particularly energy, through shared infrastructure,
clusters, and alternative power solutions was also identified as
critical. Panelists stressed that sustained investment in skills and
capability improves both resilience and bankability, while cooperative
models, blended finance, and advisory support can unlock growth where
traditional lending constraints persist.
As highlighted during the session, SMEs looking to move from survival to
scale can engage Stanbic IBTC Bank to explore financing options,
advisory support, and partnership‑driven solutions aligned with their
growth stage. Through collaboration with regulators, development
agencies, and state governments, the bank continues to help Nigerian
businesses translate insight into execution and growth into
sustainability.
Follow this URL to learn more: www.stanbicibtcbank.com/business
