The Micro, Medium & Small enterprises (“MSME”) sector plays a pivotal role in driving socio-economic growth, particularly in emerging economies. In the Nigerian context, the sector’s status as the largest employer of labour makes it an effective supporting sector for fostering entrepreneurial innovation and local capital formation. However, the Nigeria MSME sector is characterized by high levels of informality and preponderance of small-sized low scale enterprises – a dynamic that has been a constraint on scale mobility and a key driver of the high mortality rate experienced in the sector.
To address these issues, the government has taken actions aimed at building the resilience and potential for growth of the sector by creating an enabling environment for increasing the involvement and capacity of MSMEs to compete in the formal economy. The Federal Government, through the Ministry of Industries, Trade, and Investment (“the Ministry”), has identified increasing MSMEs participation in government procurement at the core of its strategy.
To define this strategy, the Ministry through the Policy Development Facility Phase II commissioned Ernst & Young (EY) to conduct a market analysis of the MSME sector, which at its basic premise will investigate the current categorization of enterprises within the MSME sector and how such categorization impacts MSME’s competitiveness in government procurement and intervention programs.
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