New study calls for enhanced ESO collaboration to improve MSME capacity

By Henry Uche

Targeted to drive economic growth through a supportive ecosystem where Nigerian enterprises can thrive, grow, and contribute meaningfully to the nation’s economic prosperity and societal well-being, a group of economic experts have called for Enhanced ESO Collaboration to improve MSME capacity.

The experts made this position known at the First Nigerian ESO Annual Forum with the theme: “Scalable Pathways for ESOs in Nigeria to Build MSME Investment Readiness Capacity” in Lagos.

According to them promoting strong Collaboration among Enterprise Support Organisations (ESO) in Nigeria is critical to building MSME Investment readiness that can unlock more impact capital.

A new report on: “The Mapping and Analysis of Enterprise Support Organizations (ESOs) in Nigeria, by the Impact Investors Foundation” offers an in-depth assessment of the current landscape of ESOs across key sectors in Nigeria, highlighting their crucial role in supporting micro, small, and medium enterprises (MSMEs), challenges, opportunities and identifies funding sources to enhance their long-term viability.

The extensive study of the enterprise support ecosystem in Nigeria conducted with funding from UK International Development from the UK Government in the second phase of the RISA Fund’s Sustainable Systems for Research and Innovation Financing Project (SSRIF II), involved key informant interviews with representatives from government institutions such as the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), Bank of Industry (BOI), among others, and online surveys with ESOs in the private sector.

Providing the micro, small, and medium enterprises (MSMEs), which comprise 96.7 percent of businesses in Nigeria, with funding, knowledge, and opportunities to thrive should be the top priority of the Nigerian government as these businesses provide 87.9 percent of employment, and contribute about 49.7 percent to the national GDP. The study shows that many ESOs struggle to provide effective business development assistance due to challenges in financial stability, governance, and operational systems.

Speaking, Etemore Glover, CEO of Impact Investors Foundation, said “Creating an enabling environment for Enterprise Support Organisations (ESOs) is vital to building a robust ecosystem for Nigerian MSMEs to contribute towards economic development.

The insights from this report will be critical for both policymakers and stakeholders working to strengthen Nigeria’s MSME ecosystem. Our findings provide a clear roadmap for addressing the existing gaps and building a more supportive environment for entrepreneurs across the country”.

Commenting on the findings, Alice Dada, Technical Country Lead, Nigeria, RISA Fund, added, “This report provides a comprehensive view of Nigeria’s ESO ecosystem, mapping key players, their innovative offerings, and strategic priorities. By strengthening ESOs, we can unlock greater opportunities for MSMEs, foster economic growth, create jobs, and advance innovation across the country.”

Key findings from the report include: Focus Areas of ESOs: ESOs in Nigeria predominantly offer services in Training and Capacity Building, Access to Funding, and Technology & Product Development.

Market Development and Management Consulting: The survey revealed that 68% of respondents prioritise Market Development, while 64% focus on Management Consulting, pointing to a strategic emphasis on expanding markets and improving organizational efficiency.

Others are: Business Development and Incubation: Business Development Services and Business Incubation/Acceleration were each cited by 52% of respondents, underscoring the importance of nurturing innovation and supporting start-ups in Nigeria.

Then comes the Gaps in Financial and Regulatory Support: The report highlights potential gaps in the provision of Financial Management (4%) and Legal Services (8%), areas critical for sustainable growth in the MSME sector.

The Critical Challenges included staggering 80% of enterprises have limited access to capital, while 84% cite the high cost of infrastructure as a major barrier to success. Additionally, 72% of enterprises are not adequately prepared for the market, emphasising the need for improved readiness programs.

It recommended that due to the challenges MSMEs face in adopting new business models, which limits their competitiveness in an increasingly digital and global market, a new approach to navigate through a volatile, uncertain, complex and ambiguous business environment be adopted in the most ethical and collaborative manner.