Elumelu: Nigeria Needs Regulations that Encourage Business Growth to Rejig Economy

Raheem Akingbolu

The Founder and Chairman, Heirs Holdings, Mr. Tony Elumelu has highlighted four critical areas that will significantly impact Nigeria’s push towards poverty alleviation in Nigeria.

In his keynote speech at the ninth Lagos Public Relations Stakeholders’ Conference on leadership and poverty eradication in Lagos recently, Elumelu gave the areas to include, Positioning SMEs to thrive; Leadership, Governance and Structure; Promoting Financial Literacy and Inclusion; and Tackling Unemployment.

Elumelu who was represented by the MD/CEO, Heirs Life, Mr. Niyi Onifade, explained that everyone needed to be involved in the fight against poverty in the country.

On SMEs, he explained that “Government must create an environment and structure to enable capital flow freely across the country. The best way to do this is to incentivize the free movement of capital through the growth and development of small business enterprises.”

According to him, “SMEs are the lifeblood of any economy, and countries that prioritise the success of SMEs position themselves for wealth creation. For instance, the development of countries like China, Germany, France, and others can be attributed to the success of their SMEs.”

Available data show that SMEs in Nigeria contribute up to 48 per cent of national GDP. SMEs account for 96 per cent of businesses, and provide 84 per cent of employment.  In a country of over 200 million people with 40 per cent of the population classified as youths below the age of 35 years, SMEs can create meaningful employment opportunities that will stall the alarming talent drain across the country.  SMEs have the capacity to create opportunities for people to feed themselves and care for their families, Elumelu said, while noting that the success of any country is a testament to its leadership and its governance structure. “To drive financial inclusion, regulators and our leaders have a key role to play. Restrictive policies should be relaxed to encourage more people, especially rural dwellers, to access financial services. Regulatory requirements should be flexible and favourable to financial providers, which would then allow them to create more value-adding products and services for people.

“More importantly, our leadership must create rules and regulations that encourage growth and not stifle creativity. Poverty alleviation must consist of deliberate programmes that reach the grassroots, and dogged commitment to implementing and tracking the plans, must not be the same as usual,” Elumelu further said.

On the need for promotion of financial literacy and inclusion, he said: “Financial inclusion and social welfare programmes have been identified globally as panacea for poverty eradication.

“When people have access to financial services such as credits, loans, savings, life insurance, and others, they can fend for themselves and run sustainable businesses that would create a ripple effect in the country’s GDP.”

He noted that access to these financial tools remains limited in Nigeria. According to him, Nigeria is still one of the top three unbanked countries in the world with 40 per cent of our population living without access to financial services.

Elumelu further said: “Statistics show that the unemployment rate in Nigeria has increased from 27.1 per cent in the second quarter of 2020 to an estimated 33 per cent in 2022. This is alarming.

“Unemployment is undoubtedly a root cause of poverty. When people have no jobs, they get hungry and angry. They also become easy tools for criminal activities.”