The International Labour Organization (ILO) recently made a groundbreaking discovery through a study conducted which was aimed at understanding the relationship between small businesses and employment world wide. The report reveals that seven in ten workers are into what we would call small and medium enterprises, SMEs. The report unveils the hitherto neglected roles of these kinds of businesses in job creation.
According to the report, self-employment, micro and small enterprises play a far more important role in providing jobs than previously believed.
You may wonder where they got this information from.They gathered data from 99 different countries and in the process discovered that what was previously seen as ‘small economic units’ when summed up, make up 70 per cent of total employment, the most significant economic unit in job or employment creation.
Another important aspect of this study is the part that reveals that an average of 62 per cent of employment, in these countries where the studies were carried out, is in the informal sector, which is where the bulk of our unmeasured GDP lies.
The informal sector in Nigeria represents a large part of the economy though there isn’t sufficient data to put numbers to it, making it difficult to say exactly how productive the Nigerian economy is.
But we know they exist, in numbers large enough to keep partakers going and sustained. Only a fraction of the businesses in Nigeria for instance is registered with the Corporate Affairs Commision, the rest represents everything from the street corner barber, to the roadside mechanic, or that mobile cobbler mending your shoes.
The report is titled; Small Matters: Global evidence on the contribution to employment by self-employed, micro-enterprises and SMEs.
The question of whether we are actually wealthier than our GDP projects or even poorer is one that has to be genuinely answered. Then the government must do all within its power to encourage these small and medium enterprises driving the economy.
In a capitalist economy the people are supposed to be the drivers of the economy, and all that is expected of the government is to provide an enabling environment where all these can strive.
This shouldn’t be so hard to do. A few of the things to do to make this unit blossom is to
- Make enterprise friendly laws and stick to it in the long-run
- Provide a suitable and favorable taxing policy
- Easy access to loans with payable interest rates
- Provide basic infrastructure but not limited to roads and power supply.
- Stop the political sabotage of businesses or undue interference for local, regional or personal interests.
- Involve more technocrats and economists in economic decisions and less politicians. Round peg, round hole.
So long as the political will is there and economic know how is present, a lot of the aforementioned can be done before our very eyes. And Nigeria will blossom.