Share this article

A recent PwC Nigeria survey report on MSMEs, PwC’s MSME Survey 2020- Building to last has revealed that about 60% of the informal sector are not covered in the tax data. The report which is the first in a series of surveys that aim to provide insights into a range of issues concerning Micro, Small and Medium scale enterprises (MSMEs) in Nigeria – through the eyes of their CEO’s, also revealed obtaining finance, finding customers and infrastructure deficits as some of the most pressing problems impacting the operations of MSMEs in Nigeria.

The report presented survey findings of 1,629 key decision makers in the MSME sector with annual sales turnover ranging from N5 million and above. The businesses surveyed had a geographical spread covering 29 states and across the 6 geopolitical zones in the country. The survey was conducted prior to the COVID-19 Pandemic (between August and December 2019).

Presenting the results of the findings, Esiri Agbeyi (Partner & Head Private Wealth Services, PwC Nigeria), noted that Obtaining finance (22%), Finding customers (16%) and Infrastructure deficits (15%) were identified by respondents as their most pressing problems.

“One remarkable finding was how payment policies imposed by big corporates severely affected 33% of MSMEs whose payments were delayed for more than a month. This negative impact on cash flows is compounded 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”, said Esiri.

Other highlights of the findings are as follows:

Obtaining finance, finding customers and infrastructure deficits are the most pressing problems of SMEs.
Electricity is responsible for the highest cost to operations followed by rent and cost of capital
Top economic issues are pressure to reduce prices, rising inflation and low demand for products and services.
Local government levies are the most difficult taxes to comply with.
MSMEs would prefer private equity over debt financing

The study also includes case studies with leading SME players across various sectors, as well as interviews with key stakeholders and experts on the sector.

The objective of the study according to Esiri Agbeyi is to capture the challenges the MSME sector faces, identify opportunities to unlock growth and investment, provide solutions, mitigate risks and assess the outlook for MSMEs across industries. The findings covered the Nigerian business environment and market conditions, tax issues, access to finance, growth obstacles, payment policies, the role of technology and the impact of women on the MSME sector in Nigeria.

Share this article