A new report has emphasized the urgent need for robust collaboration among Enterprise Support Organisations (ESOs) in Nigeria, as small and medium-sized enterprises (SMEs) in sub-Saharan Africa face an annual financing shortfall of approximately $330 billion. The collaboration is deemed essential for enhancing their investment readiness, which could facilitate access to greater impact capital.
The report, titled “Mapping and Analysis of Enterprise Support Organisations (ESOs) in Nigeria,” was launched in Lagos at the inaugural Nigeria ESO Forum. It provides an in-depth assessment of the current landscape of ESOs across key sectors in Nigeria, highlighting their crucial role in supporting micro, small, and medium enterprises (MSMEs), challenges, and opportunities, and identifies funding sources to enhance their long-term viability.
The study, conducted with funding from UK International Development from the UK Government, involved key informant interviews with representatives from government institutions and online surveys with ESOs in the private sector. It found that many ESOs struggle to provide effective business development assistance due to challenges in financial stability, governance, and operational systems.
“Creating an enabling environment for Enterprise Support Organisations (ESOs) is vital to building a robust ecosystem for Nigerian MSMEs to contribute towards economic development,” said Etemore Glover, Chief Executive of the Impact Investors Foundation. “The insights from this report will be critical for both policymakers and stakeholders working to strengthen Nigeria’s MSME ecosystem.
“Our findings provide a clear roadmap for addressing the existing gaps and building a more supportive environment for entrepreneurs across the country,” Glover added.
Alice Dada, Technical Country Lead, Nigeria, RISA Fund, commented, “This report provides a comprehensive view of Nigeria’s ESO ecosystem, mapping key players, their innovative offerings, and strategic priorities. By strengthening ESOs, we can unlock greater opportunities for MSMEs, foster economic growth, create jobs, and advance innovation across the country.”
The report highlights several key findings, including:
– Market Development and Management Consulting: 68% of respondents prioritize market development, while 64% focus on management consulting, indicating a strategic inclination towards market expansion and organisational efficiency.
– Business Development Services and Business Incubation/Acceleration: 52% of respondents acknowledge the critical role of nurturing innovation and supporting start-ups in Nigeria.
– Gaps in Financial Management and Legal Services: The report points out potential gaps in Financial Management (4%) and Legal Services (8%), vital for the sustainable growth of the MSME sector.
– Limited Access to Capital and High Cost of Infrastructure: 80% of enterprises experience limited access to capital, and 84% cite the high cost of infrastructure as a major barrier to success.
The full report is available for download at https://bit.ly/ESOMAPPING.
The report also discussed the challenges faced by MSMEs in adopting new business models, which restricts their competitiveness in an increasingly digital and global environment.
The Impact Investors Foundation (IIF) is a leading organisation dedicated to advancing impact investing in Nigeria by facilitating knowledge sharing, policy advocacy, and information flow to encourage the development of impact investing.
Its public-private partnerships have garnered government support, notably positioning the Federal Ministry of Budget and Economic Planning as the “Champion Ministry” and leading to the $1 billion Nigerian Wholesale Impact Investment Fund.
The Nigerian National Advisory Board for Impact Investing (NABII), an initiative of IIF, tackles industry challenges across capital supply and demand, policy, and intermediation. This has led to the $1 billion Nigerian Wholesale Impact Investment Fund (WIIF), with government backing, to address MSME financing gaps.
Other initiatives include Deal Source Africa, facilitating $1.7 million in deals, the Nigerian Impact Investment and Industry Research Collaborative (NIIRIC) promoting research commercialisation, and the Enterprise Support Organisation (ESO) Collaborative empowering 184 ESOs to develop investment-ready businesses and influence policy.
“We believe that by strengthening ESOs and enhancing their investment readiness, we can unlock greater opportunities for MSMEs, foster economic growth, create jobs, and advance innovation across Nigeria,” said Glover.
The report’s findings and recommendations are expected to inform policy decisions and interventions aimed at supporting the growth and development of MSMEs in Nigeria.
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