Achieving Nigeria’s ambitious $1 trillion economy target requires a strategic focus on small and medium-sized enterprises (SMEs), which already play a vital role in the nation’s economic landscape. President Bola Tinubu has repeatedly emphasized this goal, envisioning a $1 trillion economy within three years and a $3 trillion economy by 2030. To turn this vision into reality, experts suggest key reforms to empower SMEs and enhance their contribution to Nigeria’s Gross Domestic Product (GDP).
Creating an Enabling Regulatory Environment
Anthony Chinwe, CEO of De-SME Facilitators Limited, emphasizes that an enabling regulatory framework is essential for SMEs to thrive. The government must simplify access to funding through equity, debt, or hybrid financial options, ensuring that SMEs can scale and compete effectively in both local and global markets.
A well-structured legal and regulatory framework would also make it easier for SMEs to penetrate international markets, boosting Nigeria’s foreign exchange earnings. Chinwe highlights Nigeria’s underutilization of the African Growth and Opportunity Act (AGOA), which grants duty-free access to the U.S. for eligible African exports. Unlike Ghana, which dominates African markets in the U.S., Nigeria faces bureaucratic bottlenecks that hinder its export potential.
To address this, he urges the government to establish a robust certification framework that ensures Nigerian products meet international quality standards. Removing these barriers would improve export opportunities and attract more foreign investment.
Leveraging the African Continental Free Trade Area (AfCFTA)
With the AfCFTA agreement in place, Nigeria has a unique opportunity to boost trade and economic integration across Africa. By eliminating trade restrictions and enhancing cross-border commerce, SMEs can expand their reach and contribute more significantly to economic growth. However, to maximize these benefits, the government must streamline export procedures and address infrastructure challenges that limit competitiveness.
Adopting a Cluster-Based Economic Model
Another critical strategy for SME growth is adopting a cluster approach, where businesses in similar industries operate within dedicated zones. Japan’s successful “one-village, one-product” policy provides a blueprint Nigeria can adapt. This approach encourages local governments to specialize in specific products based on regional strengths, fostering industrial development and job creation.
Chinwe recalls that in 2010, Modupe Adelaja, the former Director-General of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), proposed a similar initiative—“one local government, one product.” However, the plan was never fully implemented. Bringing back this concept could unlock Nigeria’s economic potential by:
- Reducing business costs through shared infrastructure and resources
- Encouraging innovation and technological advancements within industries
- Enhancing product specialization for better competitiveness in global markets
Each state and local government has unique natural resources, agricultural products, or industrial capabilities that can serve as economic drivers. Properly implemented, regional SME clusters would generate jobs, boost productivity, and increase Nigeria’s export capacity.
Conclusion
For Nigeria to achieve a $1 trillion economy, the government must take decisive action to empower SMEs. Key priorities include regulatory reforms, streamlined export policies, and infrastructure investments to support business growth. By removing barriers and leveraging trade agreements like AfCFTA, SMEs can drive economic transformation, ensuring sustainable growth and global competitiveness.
With targeted policies and strategic implementation, Nigeria’s SMEs have the potential to be the backbone of a trillion-dollar economy, creating prosperity for millions and positioning the country as a major player in the global market.
