ACHIEVING the Federal Government’s ambitious goal of a $1 trillion economy in the coming years hinges on strategically positioning small and medium-sized enterprises (SMEs), a recent report by The ICIR has highlighted. This sector already makes a significant contribution to the nation’s economy.

President Bola Tinubu has repeatedly stated his confidence in reaching this milestone, first mentioning it at the 2023 Nigeria Economic Summit, where he envisioned a $1 trillion economy within three years and a $3 trillion economy by the end of the decade in 2030. He reiterated this stance in his 2025 New Year message, urging Nigerians to support efforts in establishing the country as a $1 trillion economy.

In a recent conversation with The ICIR, Anthony Chinwe, the Chief Executive Officer of De-SME Facilitators Limited, offered insights into how the government can maximise the potential of SMEs to achieve this economic target.

Chinwe, a former group head of SME banking at Fidelity Bank, suggested that the government needs to establish a regulatory environment that facilitates SMEs’ access to appropriate funding, whether through equity, debt, or hybrid options.

He believes that creating this enabling environment, through a robust legal and regulatory framework, would allow SMEs to access markets more smoothly, particularly international ones. He explained that this would benefit Nigeria through increased foreign exchange earnings contributing to the Gross Domestic Product (GDP), job creation, and the overall positive impact SMEs can bring.

“For instance, a friend who conducted research revealed that if you go to African markets in the United States, most of the goods in stock are from Ghana.

“He informed me that 60 per cent of the goods sold in that market, coming from West Africa, are from Ghana,” Chinwe recalled.

He questioned why it is easier for commodities to be exported from Ghana to the United States (US) than from Nigeria, expressing concern about Nigeria’s failure to fully leverage the African Growth and Opportunity Act (AGOA), which grants duty-free access to the US market for Nigerian exports.

He further inquired, “What are the bottlenecks in the export of products of the agricultural value chain in Nigeria? Is it that the goods don’t meet international standards? Then, what are we doing to create a proper certification framework that makes our goods acceptable in the international market?”

Chinwe emphasised that these are crucial issues the government should address, finding solutions and collaborating with the private sector to overcome them. He also noted the potential of the African Continental Free Trade Area (AfCFTA) agreement, a treaty aimed at boosting trade and economic integration across Africa, for Nigeria to maximise its benefits.

Another key suggestion from Chinwe to position SMEs for a $1 trillion economy is for the government to adopt a cluster approach, creating dedicated workspaces for businesses operating in similar sectors.

He highlighted Japan’s success with its “one-village, one-product” policy, which enabled the development of unique agricultural or mineral products specific to different villages.

“That’s the law of comparative advantage. Sometime between 2010 and 2011, when Modupe Adelaja was the Director-General of Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) she came up with an amended version of that policy that would be domesticated in Nigeria.

“That is, one local government, one product, but it was never driven to a conclusion by way of implementation,” Chinwe said.

He argued that when the government establishes clusters for businesses, it fosters valuable linkages and facilitates access to shared services, which in turn improves technology and innovation and reduces the cost of doing business.

The government needs to take concrete steps to establish clusters for different products in various regions, he asserted, stressing that every region, state, and local government in Nigeria possesses unique produce that gives it a strategic advantage.

He believes that if this cluster creation is allowed to run and merge with the larger economy, it will boost the entire Nigerian economy.

“Those are the areas – cluster creation, market access, and access to suitable funds – that the government should look into,” he maintained.

Chinwe emphasised the importance of cluster creation because many SMEs currently have to generate their own electricity and water, build their own roads, and provide their own security, all of which present significant challenges that hinder business growth.

“The present government seems to be doing a lot and working on reforms. But if the right things are in place and there’s a segment of the capital market dedicated to SMEs even if you have a furniture company and you retired and your children are not interested in running it, you should have a platform that will enable you to sell it not as a scrap but as an ongoing business just as one will sell a big company in the capital market,’ he added.