SMEs… the acronym that speaks volumes in our present-day economy! In Nigeria, SMEs contribute 48 percent of national GDP, account for 96 percent of businesses, and provide 84 percent of employment. Despite their significant contribution to the Nigerian economy, challenges persist that hinder the growth and development of the sector.
According to the Nigeria Bureau of Statistics, Small and Medium Scale Enterprises (SMEs) in Nigeria have contributed about 48 percent of the national GDP in the last five years. With a total number of about 17.4 million, they account for about 50 percent of industrial jobs and nearly 90 percent of the manufacturing sector, in terms of the number of enterprises.
Though significant growth has been achieved in the MSME sector, much remains to be done. According to an article on “developing Africa through effective, socially responsible investing”, there still exists a ‘missing middle’ which finds it hard to access funds due to the category of funding they belong to. Other challenges encountered by the sector include lack of skilled manpower, multiplicity of taxes, high cost of doing business, and having insurance coverage.
According to the 2010 survey report on SMEs in Nigeria conducted by the National Bureau of Statistics (NBS) in collaboration with SMEDAN, the SME sector in Nigeria is strategically positioned to absorb up to 80 percent of jobs, improve per capita income, increase value addition to raw materials supply, improve export earnings, enhance capacity utilisation in key industries, and unlock economic expansion and GDP growth.
Small and Medium Enterprises contribute a massive 48 per cent to our national GDP. That’s nearly half of everything our economy produces! It’s a testament to the collective power of these businesses, from the small shop owner on your street to the tech startup innovating in Lagos. This contribution isn’t just about the money; it’s about the services provided, the goods produced, and the value created within our communities.
Based on the above, there is a need to provide insurance coverage for SMEs in Nigeria with the aim of unlocking growth and development of the sector. International Energy Insurance Plc is committed to being a trusted partner for individuals and businesses across Nigeria, offering a wide range of insurance solutions tailored to meet diverse needs. With a focus on customer satisfaction, International Energy Insurance leads the industry in delivering dependable, innovative, and efficient services.
Insurance covers assist operators by covering material damage to their business premises and their contents (e.g., computers, stock, and other items), and motor vehicles against fire, lightning, limited explosion, malicious damage, strike, riot, flood, storm, impact, and burglary (cover applies to contents only). Cover can extend to all client business premises, provide a specific amount in terms of claims from third parties for injury and damage or death-on-service of employees, and cover the occupier’s liability against legal suits relating to injury or loss suffered by visitors to the insured’s premises.
Now, it is easy to get carried away with the positive numbers, but it is also important to be factual. Running a business in Nigeria, especially a small or medium-sized one, comes with its own set of unique challenges. It’s not always a smooth ride.
One of the biggest hurdles is what’s often called the “missing middle”. Think about a company that has outgrown microfinance but isn’t quite ready for the big leagues of traditional bank loans. They are stuck in this awkward middle ground, struggling to get the funding they need to grow. It is a real problem, and it holds back a lot of promising businesses.
But that’s not all. SMEs also face issues like finding the right people: Getting skilled and reliable workers can be tough; dealing with taxes: navigating the tax system can be a headache and a financial burden; and the cost of doing business: Things like infrastructure problems and high energy costs can make it really expensive to operate.
So, how do we help these vital businesses thrive? How do we remove some of these roadblocks and give them the support they need to reach their full potential?
At International Energy Insurance PLC (IEI), we understand the unique challenges faced by Nigerian SMEs. We know that these businesses aren’t just numbers on a spreadsheet; they’re the embodiment of hard work, resilience, and the Nigerian spirit.
That is why we are committed to being a partner in their success. Our SME DELYTE product, for example, is specifically designed with SMEs in mind. We have built something that truly meets their needs, offering comprehensive coverage that includes things like protection for their property, their vehicles, and their legal liabilities. We have made it flexible and supportive because we know that every business is different.
Insurance isn’t just about paying out claims; it’s about providing peace of mind. It allows business owners to focus on what they do best—innovating, creating, and serving their customers without constantly worrying about the worst-case scenario. It is about creating a stable environment where businesses can take risks, grow, and contribute to the economy.
Our ethos drives the existence of our brand. We stand unequivocally on our core values of friendliness, innovation, simplicity, responsiveness, and trust. We have decades of excellence, and we build insurance around your needs and products.
Our goal is simple: to empower SMEs to thrive. When they succeed, Nigeria succeeds. It is about building a stronger economy, a more resilient business sector, and a brighter future for everyone.
So, let’s celebrate the incredible contribution of Nigeria’s SMEs. Let’s support them, encourage them, and provide them with the tools they need to flourish. Because when SMEs thrive, Nigeria thrives.
Oluwaseyi Ibileke, Head of Strategy, ERM and Product Manager, International Energy Insurance PLC