South West thrives with Lagos alone housing 19% of MSMEs
By Jeph Ajobaju, Chief Copy Editor
Urbanised Lagos alone has 19 per cent of all Medium and Small Business Enterprises (MSMEs) and combines with the other five South West states which account for 51 per cent of such businesses in Nigeria, according to a new report.
The report by fintech startup Kippa shows the majority of MSMEs are located in the South, with the fewer in the North blamed on several socioeconomic factors, some obvious, some below the radar.
Kippa attributed the disparity to favourable conditions in the South such as businesses having more access to technology to manage their operations and relative safety compared with insurgency in the North, a major setback for businesses.
The South South accounts for 11 per cent of MSMEs, South East 8.7 per cent, North Central 15.4 per cent, North West 10.6 per cent, and North East 5.6 per cent, according to the report.
“From the 23,618 MSMEs surveyed across the 36 states of the country, the majority of Nigeria’s MSMEs are in the South, with Lagos, Oyo, and Ogun accounting for a significant portion of the total,” Kippa said.
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Lagos has 19% of MSMEs
“Based on merchant activity on Kippa, the city of Lagos alone is home to 19% of all MSMEs in the country. As a result of Lagos’ population, urbanization, and some cultural variations at play, more economic activities are taking place in the state.
“Both men and women, as well as white-collar professionals, are in the business of selling something, generally referred to as a ‘side hustle’, Kippa explained, per Nairametrics.
Kippa highlighted reasons for the skewed distribution of MSMEs in favour of the South.
“One reason for this may be because the South is more urbanized, and has more internet connectivity, and smartphone usage than the North.
“The North also has a lesser rate of technological adoption and research reports have suggested this can be attributed to the insecurity, banditry, terrorism, and kidnapping in the region, that destabilised residents and their businesses.”
Kippa noted that economic advantages favour the use of digital technology by MSMEs in Lagos, FCT, Abia, Oyo Ogun, Rivers, and Delta; and digital commerce is also increasing in Kaduna, Edo, Kano, Anambra, Akwa Ibom, and Enugu.
It said this could also be linked to improved internet connectivity and more affordable smartphone access.