23/08/2026
Digitising MSMEs for Unlocking Nigeria’s Non-Oil Revenue and Economic Growth
Being a Strategic Opening Address by Olufemi Awoyemi, founder and chairman, Proshare Nigeria Limited, at the 6th Annual MSME & Startup Economic Summit 2026, convened by the Africa Global Economic Forum under the theme, “Digitising MSMEs for Unlocking Nigeria’s Non-Oil Revenue and Economic Growth”, on Thursday, August 20, 2026, at the Civic Centre, Victoria Island, Lagos.
Distinguished guests, ladies and gentlemen.
I thank the Africa Global Economic Forum and its partners for convening this summit. I also acknowledge the public institutions, financial institutions, technology companies, enterprise associations and business owners represented here. Proshare’s role as a strategic knowledge and media partner reflects a shared commitment to improving the quality of evidence, dialogue, and ex*****on around Nigeria’s enterprise economy.
When I addressed the MSME Finance CEO Forum last year, my central argument was that Nigeria needed purpose over propaganda. I called for a current definition and a credible count of our enterprises, stronger links among nano, micro, small, medium, and large businesses, and financing arrangements grounded in operating cash flow and productive value chains. Those requirements remain. Today’s theme adds the instrument through which they can be advanced at scale, and that instrument is digitisation.
Digitisation should not be reduced to payment terminals, mobile applications or the migration of paper forms to a website. For an MSME, useful digitisation should lower the cost of being visible, verified, financed, connected to markets and compliant. For the government, it should improve the quality of economic data and widen the revenue base through business growth and simpler compliance. For financial institutions, it should turn fragmented transaction activity into information that supports better risk assessment.
The Operating Context
The macroeconomic indicators are improving, but the operating environment remains demanding. Nigeria’s real GDP grew by 3.89% year on year in Q1 2026, while the non-oil sector accounted for 96% of output and expanded by 3.94%. Information and communications grew by 10.98%, manufacturing by 3.29%, and agriculture by 3.15%. These figures confirm that the non-oil economy is carrying national growth, but they do not establish how much of that growth came from MSMEs or whether it translated into stronger enterprise margins, employment quality and survival rates.
Headline inflation moderated to 15.43% in July 2026, but food inflation accelerated to 5.56% month on month. The policy rate remains 26.50%, with a 45% cash reserve ratio for deposit money banks. For a small business, these conditions appear through input prices, household demand, inventory costs, power and logistics expenses, and the price and availability of credit. Lower annual inflation is positive, but it does not reverse the cumulative increase in the cost base. The exposure is easily understated. The SMEDAN and National Bureau of Statistics survey found that 64.5% of Nigerian micro-enterprises turn over less than N50,000 a month, with a further 29.4% between N50,000 and N300,000. At that scale, a single quarter of margin compression is a solvency event rather than a planning inconvenience.
A macroeconomic recovery becomes meaningful to the enterprise sector when firms can rebuild working capital, protect margins, retain workers, invest in productivity and reach new customers. The measurement of policy success must therefore extend beyond aggregate stability to enterprise-level outcomes.
The Measurement Problem
Nigeria’s most frequently cited MSME baseline remains the 2021 SMEDAN and National Bureau of Statistics survey, which reported 39.65 million MSMEs contributing 46.31% of GDP. Proshare’s recent examination of the commercial case for Nigeria’s informal economy also notes that informal employment accounts for about 93% of employed Nigerians. These figures describe the scale of the market, but the MSME count is now nearly five years old. It cannot tell us how many firms survived the inflation, exchange-rate and energy-cost adjustments, how many were created, where they operate, or which have moved between nano, micro, small and medium categories.
The direction of the last two readings deserves attention. The 2017 national survey counted 41.54 million enterprises against 39.65 million in 2021, a contraction of close to 1.9 million businesses, and that decline was recorded before the currency, subsidy and energy-cost adjustments of 2023 and after.
One figure from that survey belongs at the centre of a summit convened on non-oil revenue. MSMEs account for 96.9% of Nigerian businesses, 87.9% of employment and 46.31% of GDP. They account for 6.21% of exports. An enterprise base that is very nearly the whole economy sells about one-sixteenth of what the country sells to the world. Non-oil revenue growth to date has come mainly from more effective taxation of domestic transactions. Non-oil export earnings are the part of this agenda that has barely started, and it is the part that brings foreign currency home.
The first institutional requirement is therefore a continuously updated enterprise registry. It should connect business identity, beneficial ownership, location, sector, employment, payments, credit history, tax status and participation in government programmes, with proper consent, data protection and clear rules on access. The objective is to ground policy in observable enterprise activity rather than in approximation carried forward from a survey the Federation can afford once every several years. Consent, data protection and clear rules on access belong in the design at the outset rather than as later additions.
That requirement is closer to delivery than the debate suggests. The Director-General of SMEDAN confirmed in February 2026 that a fresh national enterprise census is underway. Its value will be measured by its publication date and the depth of its disaggregation, covering sector, state, enterprise size, formality status, and ownership, with a committed repeat cycle. A dated census, published and repeated, is the highest-return public investment available to this sector, and this summit should ask for the date.
Digital transaction data can support this process, but payments alone are not a complete economic record. Cash flow does not automatically reveal profitability, inventory quality, customer concentration, indebtedness or productive capacity. Payment data should therefore be combined with simple bookkeeping, digital invoicing, supply chain records, and verified business identity. Data portability is equally important. An enterprise should be able to carry its verified commercial history from one platform or lender to another rather than become captive to a single provider.
From Transaction History to Investability
The financing challenge is partly a question of liquidity and pricing, but also of investability. Many enterprises have no audited accounts, acceptable collateral, stable records or enforceable forward contracts. A lender presented with limited information will either decline the credit, shorten the tenor, demand security the business cannot provide, or price for uncertainty. Digitisation can reduce that uncertainty by making revenues, payment regularity, supplier relationships and operating cycles more observable. The scale of the constraint is documented.
The World Bank stated in December 2025 that fewer than one in twenty Nigerian MSMEs have access to bank credit, that available loans are short-term and costly, and that collateral requirements exclude many otherwise viable firms. The World Bank and the Bank of Industry placed the MSME financing gap at about US$120bn in October 2025. Credit to the private sector stood at N83.26trn in June 2026, growing 9.37% year on year, while the money value of the economy was expanding at close to twice that rate. Private-sector credit is growing more slowly than the economy it exists to finance, and the small enterprise sits at the end of that queue.
Nigeria already has evidence that digital rails can distribute credit at scale. The reported N1tn milestone in instant digital loan disbursements by FirstBank illustrates the reach that automated decision systems can achieve. The next task is to ensure that scale is matched by suitable tenors, transparent pricing, responsible collections, effective consumer protection and evidence that credit improves enterprise capacity rather than merely financing short-term distress.
The rails themselves are thickening. The value of transactions through point-of-sale terminals reached N18.78trn in the first quarter of 2026, an increase of 79.03% year on year. The point-of-sale terminal is the merchant-level instrument closest to small businesses. NIBSS has begun rolling out the National Payment Stack, which had processed 26.55 million transactions worth N1.4trn across 48 participating institutions by August 2026, and which unifies payments, identity and data on a single rail. Whether that architecture delivers the portability described earlier will depend on the access and interoperability rules written now rather than on the technology itself.
For productive MSMEs, the financing architecture must extend beyond unsecured short-term loans. Proshare’s work on de-risking Nigeria’s small businesses identifies the need for lower-cost retail finance, competitive domestic supply chains, credit guarantees, venture capital and insurance. The appropriate instrument depends on the business. Equipment may require leasing. Purchase orders may require invoicing or supply chain financing. Early-stage innovation may require patient equity. Agriculture may require insurance-linked seasonal finance. Non-interest and profit-sharing structures may suit firms whose cash flows cannot carry conventional interest obligations.
The practical unit of intervention should increasingly be the value chain rather than the isolated borrower. A nano enterprise supplying a small processor, a small processor supplying a medium-sized distributor, and a medium-sized company supplying a larger off-taker become more financeable when orders, delivery, payment and performance are digitally documented. This converts relationships into records and records into financeable assets.
Three instruments now in the field will test that architecture. The World Bank approved the US$500m FINCLUDE facility in December 2025, comprising US$400m from the IBRD and US$100m from the IDA, implemented by the Development Bank of Nigeria with guarantees through Impact Credit Guarantee Limited, targeting 250,000 MSMEs including at least 150,000 women-led businesses and 100,000 agribusinesses, and an extension of average MSME loan maturity to about three years. The National Credit Guarantee Company, capitalised at N100bn and operating since July 2025, signed a risk-sharing agreement with CREDICORP in July 2026. In the same month the Federal Government launched a N500bn youth credit scheme offering up to N2m per entrepreneur without collateral, assessed on cash flow and repayment history. The design of these instruments matches the diagnosis. Delivery is what remains to be demonstrated, and the tenor extension to about three years is the most testable commitment among them.
Productivity and Market Access must Precede Revenue Extraction
Nigeria Revenue Service collections reached N21.6tn in H1 2026, with non-oil sources accounting for 76%. Collections reached N27.1trn by the end of July 2026, close to the whole of the 2025 outturn, while the tax-to-GDP ratio improved from 10.3% to 13%. This is a significant fiscal development, but it should not be presented as evidence that the MSME sector has already been successfully formalised. The available reporting does not isolate MSMEs' contribution to that increase.
The sound sequence is to make formalisation economically valuable before treating it principally as a revenue event. A business should gain from registration through access to identity, bank accounts, finance, insurance, pension arrangements, skills, government procurement, export support and enforceable commercial rights. Compliance should be simple, proportionate and predictable. Where formalisation only creates new fees, multiple levies and administrative exposure, enterprises will rationally remain outside the system.
The current reform has begun in the right order. The Nigeria Tax Act 2025 took effect on 1 January 2026 and exempts qualifying small companies from companies income tax, capital gains tax and the development levy, so that registration now carries relief before it carries liability. One drafting point requires resolution. The Nigeria Tax Act and the Nigeria Tax Administration Act apply different turnover thresholds to the small company and small business classifications, and practitioners have read them at N50m and N100m respectively. A small enterprise cannot plan against an ambiguity of that size, and the cost of the uncertainty falls on the businesses the relief was written to protect. A single clarifying circular from the revenue authorities would settle it.
The non-oil revenue prize will be larger and more durable when it comes from more productive firms, higher incomes, additional formal jobs, greater domestic value added and stronger exports. A wider tax net imposed on weak firms may temporarily raise collections while reducing the capacity from which future revenue can be drawn. The policy objective should therefore be stronger enterprises worth taxing.
Digitalisation must therefore improve the daily economics of business. It should help firms manage stock, compare input prices, reduce payment friction, document sales, reach customers beyond their immediate location and participate in structured procurement. The Lagos State Industrial Policy 2025 to 2030 provides a useful framework around clusters, corridors and delivery institutions. Its value for MSMEs will depend on whether those structures produce financed pipelines, shared infrastructure, reliable market links and measurable enterprise outcomes.
An Ex*****on Compact
The institutions represented at this summit can organise their work around five linked commitments. The government should establish a current enterprise baseline and publish outcome data for every major MSME intervention. Financial institutions should use permissioned cash-flow and supply-chain data to provide products matched to business cycles. Technology providers should make enterprise data portable, secure and interoperable. Large companies and public procuring entities should digitise orders, invoices and payment performance so that smaller suppliers can finance confirmed demand. Enterprise associations should support bookkeeping, digital skills, standards and collective market access.
Each commitment requires safeguards. Business owners must understand what information is collected and how it will be used. Cybersecurity and fraud controls must keep pace with adoption. Digital channels must accommodate low-bandwidth users and businesses outside major cities. Competition rules must prevent platforms from converting data advantage into permanent commercial dependency. Dispute resolution must be accessible because a digital record is valuable only where contracts and claims can be enforced.
The scorecard for the next summit should be specific. It should report the number of active enterprises verified, the share maintaining usable digital records, the value and tenor of finance provided, repayment performance, new off-take relationships, procurement won, jobs retained and created, productivity gains, export participation, survival rates and the reduction in compliance time and cost. Announcements, registrations and training attendance are inputs. Enterprise growth and resilience are the outcomes.
Recent survey evidence suggests that Nigerian entrepreneurs remain willing to invest in the future. A July 2026 SME confidence study reported that 81% were confident about the next 12 months and that respondents regarded digital and online payments as important to growth. Institutions must now meet that confidence with infrastructure, capital, market access and public accountability.
Conclusion
Nigeria does not lack enterprise activity. It lacks a sufficiently connected system to identify viable firms, understand their operating records, finance their productive needs, and integrate them into larger markets. Digitisation can provide that connecting infrastructure when it is designed around enterprise value rather than technology adoption alone.
The immediate task is to convert transactions into trusted records, trusted records into finance and market access, and increased productivity into jobs, exports and a sustainable revenue base. That sequence protects the enterprise while advancing the national interest. It also gives this summit a practical basis for measuring progress when we meet again.
I wish us a productive summit and thank you for your attention.
ABOUT THE AUTHOR:
Olufemi M. AWOYEMI FCA, FCTI, FCIB, F.CIoD, FIIM, FERM, F**A, FIAPM, ACS, mni is the founder of Proshare LLC, Nigeria’s leading financial information hub. and intelligence platform. A chartered accountant, financial market analyst and governance advocate, he has contributed extensively to the development of Nigeria’s financial markets through evidence-based research, policy engagement and institutional advisory; and is highly regarded for credibility-driven interventions in economic intelligence, market governance and public policy. Follow him on X and LinkedIn
