Small and medium-sized enterprises in Nigeria will only scale sustainably if the country confronts three deeply rooted structural problems: unreliable power supply, limited access to finance, and a chronic skills gap. That was the central message from panellists at the Nigeria Business Summit 2026 during a session titled “The SME Economy: Advancing Trends and Opportunities,” which brought together business operators, policymakers, and development institutions to examine why so many enterprises remain trapped in survival mode.
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The cost of keeping the lights on
Innocent Orji Egwuonwu, Managing Director of Ojay’s International, was direct about conditions on the ground. Access to finance and power are the two biggest constraints, he said, with interest rates above 30 per cent making borrowing almost impossible for most small businesses, and collateral requirements that routinely exclude younger enterprises from formal credit.
The power problem was even more concrete. With diesel now priced at around ₦1,820 per litre, Egwuonwu revealed his business spends over N1 million every week simply to keep generators running. For a small manufacturer, that is not an inconvenience; it is a structural tax on every unit produced, every order fulfilled, and every staff member retained.
Beyond energy, he called for clearer and more harmonised tax assessments, noting that the burden of multiple levies compounds an already difficult operating environment.
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Why formalisation is the starting point
Charles Odii, Director General of SMEDAN, identified formalisation as the single biggest structural gap holding Nigerian SMEs back. With an estimated 40 million MSMEs in the country, a significant proportion remain unregistered and therefore invisible to the financial system. A business that is not registered cannot access finance, government incentives, or structured institutional support, he said.
SMEDAN is addressing this through cluster-based financing models that reduce individual collateral requirements and provide zero-interest or blended funding to groups of businesses. Partnerships with development finance institutions are also enabling SMEs to access loans of up to ₦10 million without traditional collateral, using cooperative and guarantee-based structures.
Formalisation is not red tape — it is the gateway. Without it, every other intervention, whether financial, technical, or regulatory, simply cannot reach the businesses that need it most.
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Skills as the fastest accelerator
Christian Udechukwu, Commissioner for Trade and Industry in Anambra State, put the skills argument plainly: finance without skills fails. Businesses that invest in capability become more productive, more bankable, and more resilient. Panellists agreed that sustained investment in training and advisory support must sit alongside financing interventions, not after them.
The summit’s consensus was clear: the path from survival to scale for Nigerian SMEs runs through all three levers simultaneously. Addressing one without the others delivers only partial progress.
