Why we sponsored Economist Intelligence Unit report: IHS Towers

By Kokumo Goodie, Lagos, Nigeria

Largest mobile telecoms infrastructure provider in Europe, Africa and the Middle East, IHS Towers says it sponsored a report by the Economist Intelligence Unit, titled “Enabling a more productive Nigeria: Powering SMEs” to provide a platform for better understanding the Nigerian small and medium scale enterprises (SEMEs).

The launch of the report coincided with the World Economic Forum on Africa and set out the factors that empower SMEs, seeking to identify both what is driving growth as well as the issues that are holding them back.

Commenting on the report, Issam Darwish, Executive Vice Chairman and IHS Towers Group CEO, said: “Many of us are invested in Nigeria’s future prosperity, yet little is known about the universe of Nigerian SMEs and the entrepreneurs behind them, particularly the obstacles and enablers of their growth.

This report recognizes the efforts of government institutions in supporting SMEs but also importantly shines a light on the innovative thinking embedded in this vital part of Nigeria’s economy. It helps us all to understand what can be done to support their growth and drive their productivity.

The importance of mobile telecommunications and its role as a leapfrog technology is readily apparent from this study, affirming our belief that an enhanced mobile network materially contributes to the growth of both urban and rural businesses, with the potential to reduce societal inequality. For example, a way to lessen the urban-rural digital divide is to deepen the application of mobile to agriculture, the sector in which the majority of Nigeria’s rural dwellers work. Combined with improved mobile networks in rural regions, the penetration of ICT across wider geographies will significantly support favourable income distribution trends throughout the continent.

For IHS this report is fundamental to our business. Our belief is that the future economic and social development of Africa will be accelerated exponentially by mobile connectivity, and our team of over 2,000 engineers in five countries is focused on making this happen. We are committed to developing the communities we serve, and to help people and businesses across the region build a powerful, prosperous future.”

The report published today, looks at SME productivity across five categories – policy, transport, technology, energy and finance, combining SME interviews from across the country, with expert insights.

The findings suggest that Nigeria’s government has supported SMEs by reducing the costs of registering a business and through the launch of SME-targeted funds. However, further attention should be given to the tax system - Nigerian SMEs are subject to complex and overlapping rules which need to be streamlined and simplified. In addition, import and customs charges are often unpredictable and costly, placing an additional burden on businesses, with no recourse available through official channels.

On infrastructure, the report explores how SMEs are being affected by mobile networks, transport and power deficits. While transport projects and power privatisation are underway, these will take time to deliver benefits. In the interim, SMEs are adopting innovative technologies – from solar panels to cloud computing. ICTs in particular are being used for remote work, mobile marketing and new product development such as apps and mobile services. The next technology productivity boost will come from strengthening ICT network quality across Nigeria’s territory.

Lastly, access to finance is a long-standing problem for SMEs, who rely on angel investors, personal networks, or savings. To increase financial access, SMEs need to strengthen accountancy practices and corporate structures. The report recommends banks hire more SME business experts, as they are frequently missing opportunities to participate in home-grown success stories.


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