Nigeria's small, medium enterprises record 27% international trade
• Small businesses leveraged digital tools, solutions
The over 20 million Small and Medium scale Enterprises (SMEs) in Nigeria recorded about 27 per cent international trade between March and May 2017, aided by the use of digital tools. The Nigerian firms are ahead of others grouped together in the Middle East and Africa (MEA) region. Egypt had 25 per cent exposure; South Africa 17 per cent and Israel 15 per cent.
According to Future OF Busines Survey Trade Report, July 2017 edition, created in collaboration with Facebook, Organisation for Economic Co-operation and Development (OECD) and the World Bank, digital presence enabled SMEs to trade internationally and allowed small businesses that traded internationally to get more confident and increased their capacity to create jobs.
The target population consisted of the 60 million SMEs that have an active Facebook business Page and included both newer and longer-standing businesses, spanning a variety of sectors.
The authors explained that a random sample of firms, representing the target population in each country, is selected to respond to the Future of Business Survey each month.
They hinted that with more businesses using online tools each day, the survey provided a lens into a new digital economy and, in particular, insights on the actors: a relatively unmeasured community worthy of deeper consideration and considerable policy interest.
According to it, in the past, only large multinationals could, effectively, scale globally, but today, small businesses have a menu of digital tools that allow them to leverage global connections and market directly to potential customers all over the world.
The trade report said traders are five percentage points more confident in their businesses and 10 percentage points more likely to have added jobs in the last six months than non-traders.
“For exporting SMEs, trade is at the core of their business models and success: Among exporting SMEs, 4 in 10 report that >25 per cent of their revenue comes from international trade. Exporters rely on online tools to trade internationally: Nearly half of exporting SMEs (45 per cent) report that more than 75 per cent of their international sales depend on online tools,” it noted.
The surveyed SMEs attributed growth – in revenue, resources, and employees – to their use of online tools to trade internationally.
According to the report, 58 per cent of exporters agree that using online tools for selling internationally has increased their revenue.
When the survey was initially launched in February 2016, it included 22 countries. Today, it includes 42. Since January 2017, countries including Czech Republic, Ecuador, Hungary, Nigeria, Pakistan, Portugal, Romania, Russia, Taiwan and China have been added.
The 42 Future of Business countries now represent economies accounting for 40 per cent of the world’s population and 73 per cent of global GDP.
According to the report, to date, more than 218,000 Facebook business Page owners, from both younger and longer-standing companies across a wide range of sectors, have taken the monthly survey – nearly a 60 per cent increase since January 2017.
The report recommended that if policy makers cannot optimally match cross-border buyers and sellers, they can help to better support businesses by providing them with the tools and resources (for example web-design, electronic payment mechanisms, overcoming language/cultural barriers) necessary to overcome these challenges.
It advised that policy makers and the corporate sector could work to build online payment tools that facilitate cross-border financial transactions in a seamless, and risk-free, way.
“In addition to building digital tools, policy makers should work to encourage regulatory frameworks that further facilitate SME trade, including standardizing trade regulations across countries to allow SMEs to maneuver multiple markets without being hindered by costly certification procedures; reducing burdensome customs regulation, and encouraging e-commerce participation which has been attributed to helping businesses partially overcoming trade barrier.
“When businesses have the tools they need to reach new markets, and overcome regulatory barriers, business revenue, and economies grow – it’s a win-win for all,” the report observed.