27.5 Trillion Naira budget: The benefits of the 2024 budget for Micro, Small and Medium Enterprises in Nigeria

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President Bola Tinubu in his presentation of the 2024 National Budget on Wednesday, announced government plans to spend 27.5 trillion naira ($34.85bn; £27bn) in the upcoming fiscal year. He listed the following as top priorities for the Appropriations Bill: poverty alleviation, human capital development, macroeconomic stability, employment creation, national defense and internal security, and social security.

The president also stated that the two main pillars of his 27.5 trillion naira ($34.84 billion) budget proposal for 2024 were luring investment and resolving Nigeria’s cost-of-living crisis in a speech to parliamentarians in the nation’s capital, Abuja.

“Our government remains committed to broad-based and shared economic prosperity. We are reviewing social investment programs to enhance their implementation and effectiveness. In particular, the National Social Safety Net project will be expanded to provide targeted cash transfers to poor and vulnerable households. In addition, efforts will be made to graduate existing beneficiaries toward productive activities and employment.
“We are currently reviewing our tax and fiscal policies. Our target is to increase the ratio of revenue to GDP from less than 10 percent currently to 18 percent within the term of this Administration. Government will make efforts to further contain financial leakages through effective implementation of key public financial management reforms,”

President Bola Ahmed Tinubu

The President stated that the 2024 appropriation (budget) was intended to address economic growth, human capital development, poverty reduction, and insecurity while outlining the budgetary details.

Where does this leave Micro, Small and Medium Enterprises (MSMEs) in Nigeria?

Nigeria is home to more than 36.9 million MSMEs, comprising 96.7% of all firms in Nigeria. 67% of these companies are run by young people. With 98.8% of them falling into the micro category, MSMEs account for approximately 45% of the GDP of the nation. Nearly 90% of all employment in the nation are held by them. As a result, as MSMEs expand, they generate more jobs, which boosts national economy and reduces insecurity.

Building on the foundation of the previous administration, the President of Nigeria, Bola Ahmed Tinubu and vice-president, Senator Kashim Shettima, plans to swiftly and forcefully address the most urgent issues that directly affect MSMEs in the upcoming administration. Among other regulatory policy and implementation improvements, these obstacles include insecurity, inflation, infrastructure deficit, and foreign exchange issues (made worse by a shortage of basic amenities) by increasing productivity and facilitating commerce.

The administration through the 2024 27.5 trillion naira ($34.85bn; £27bn) wants to address fiscal, monetary, and trade reforms to effectively increase domestic production, and additionally, hopes to improve macroeconomic stability by accelerating inclusive growth and job creation throughout Nigeria, which are essential components that MSMEs need to deliver prosperity to all.

Strong industrial foundations are necessary for the development of every modern economy, and Nigeria is probably no exception. Thus, in order for Nigeria to boost exports and fully benefit from the African Continental Free Trade Area by building a robust industrial base, efficiency and competitiveness are crucial. It is an undeniable fact that MSMEs (micro, small, and medium-sized enterprises), are the main factors in driving growths in Innovations, Employment generation, Local impact, Market diversification, Inclusive growth and even more. MSMEs are essential to the expansion and advancement of a nation’s economy. They are a significant driver of economic expansion, innovation, and job creation.