Economist and Chief Executive Officer of Financial Derivatives Company Limited, Mr. Bismarck Rewane, has said the success and growth of the Nigerian economy would largely depend on small businesses, better cash flow management, and policies that support the growth of Small and Medium Enterprises (SMEs).
Rewane spoke on Thursday at a webinar organised by Sparkle Digital Bank.
He challenged SMEs to re-organise their business processes and efficiently manage their cash flow, in order to reposition Nigeria in the global market.
Speaking on the theme, “Navigating Through Economic Uncertainty, From Surviving to Thriving,” Rewane said large enterprises, like Amazon and Microsoft, started as small businesses and grew to be among the top five global companies with current market capitalisation of over $2 trillion.
He added that Amazon started 30 years ago as a small entrepreneur, but grew large over the years because of favourable market policies.
According to him, if the market is free from harsh policies, it will help small businesses grow into large business enterprises that will create employment.
Rewane discussed several factors that determine how small entrepreneurs could grow into large business enterprises.
He said small entrepreneurs in Nigeria could thrive to become large scale enterprises in the future if they managed their financial flows appropriately.
Analysing the Nigerian economy, Rewane said the economy had grown from 2.9 per cent in 2023 to 2.6 per cent in 2024, with a forecast to reach 3.5 per cent growth in 2025.
He said inflation rate had risen to 34 per cent, but explained that it would start dropping from next year to as low as 19 per cent. He also said the value of the naira would appreciate in 2025, going by the current indices.
Rewane said in 2014, Nigeria was Africa’s largest economy, but explained that by 2017, Nigeria went into recession and another recession in 2020 after the Covid-19 global pandemic, and today Nigeria ranked as the fourth largest economy in Africa
According to him, “The goal of the current administration, led by President Bola Ahmed Tinubu, is to ensure that the Nigerian economy grows to $1 trillion by 2030, with an average growth rate of seven and eight per cent year-on-year, based on the investment in infrastructure, power, technology and service economy.
“Nigeria’s GDP in 2014, when Nigeria was rated the largest economy in Africa, was $568 billion, but dropped in 2024 because of devaluation of the naira and low productivity in certain areas.
“However, 71 per cent of the total GDP in 2014 was made up of mainly household consumption, at an investment rate of 16 per cent, but as at today, investment rate has increased to 36 per cent, which is a sign that Nigerian economy can bounce back by 2030 at a growth rate of seven and eight per cent year-on-year.
“Because of fuel subsidy removal, the money in the economy has been taken away from consumers, and passed on to the government.”
Rewane added that small business could thrive in the future if there were favourable policies.
He highlighted four key indices that could precent small business from growing into large scale businesses as impact of inflation on businesses, impact of exchange rate, impact of interest rate, and impact of the declining value of the naira.
In the area of interest rate, he advised small businesses to efficiently manage cash flow in order to reduce the cost of borrowing.
Regarding the impending new minimum wage, Rewane advised small businesses to increase productivity, rather than lay off workers.
Founder and CEO, The Dew Centre, and user of Sparkle App, Omon Anenih, who shared her personal business experiences, advised small business owners to maintain efficient cash flow in order to sustain their business.
Anenih said good cash flow would allow business owners to take advantage of business opportunities and make more informed decisions on investment.
Managing Director, Sparkle Digital Bank, Uzoma Dozie, advised small business owners to maintain steady cash flow and have a digital mind-set over their businesses, with a deep knowledge of data.
Emma Okonji
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