MSMEs to Reduce Unemployment by 21.59%

…With agriculture generating 90% of new employments in 2021

Micro, Small and Medium Enterprises (MSMEs) are expected to reduce unemployment by 21.59% in 2021 all thing being equal. projects that MSMEs will generate about 4.69 million employments by 2021 as deduced from National Survey on MSMEs conducted and published by National Bureau of Statistics between the period of 2013 and 2017. This represents 21.59% of the total unemployment figure of 21.76 million for 2020 according to NBS.

Our checks however reveal that 17 states out of the 36 states are projected to be responsible for employment generation by MSMEs by the end of 2021. These are states that are pre-dominantly agricultural. Agriculture is one of the major sectors in the national economy expected to generate close to 90% of new employments expected from MSMEs by 2021.

Comparing state-by-state projected MSMEs employment generation by 2021 and the unemployment figures released by NBS, Kogi state stands out. The employment projected to be generated by MSMEs in the state is to the tune of 899,288 while the unemployment rate for state stand at 677,097, which is about 132.82% when divided by expected employment generation. This expectation from the state is attributable to MSMEs survival fund by the Federal Government and various interventions, which include distribution of agricultural inputs such as cashew seeds and sesame seeds among others.

MSMEs Graph

In states like Ebonyi and Gombe, MSMEs employment generation is expected to cater for more than 90% of unemployment in both states by 2021. New employment generation by MSMEs in both states are expected to rise to the tune of 191,170 and 428,136 and unemployment figure of 194,868 and 442,478 as released by NBS in second quarter of 2020. This represents a ratio of 98.10 and 96.76% respectively.

Apart from Kogi state in the North-Central, MSMEs in Benue and Kwara states are also expected to generate employments to tune of 191,302 and 28,216 respectively. This employment generation is projected to reduce unemployment in both states by 30.95% and 15.16% respectively by 2021. MSMEs in Abia state, a south – eastern state like Ebonyi state is projected to generate about 457,519 new employments, which is about 80.18% of 570,609 unemployment rate in the state.

In the NorthWest zone, expected MSMEs employment generation is to come from Katsina (394,396), Kebbi (178,646), Sokoto (153,515) and Zamfara state with 68,892 new employments generation by 2021. These are projected to reduce unemployment by 60.61%, 72.71%, 70.96% and 32.81% respectively by 2021.

MSMEs new employment generation in South-South are projected to emanate from Akwa-Ibom (215,675), Bayelsa, (31,663), Cross Rivers (215,476) and Delta State with 358,369 employments generation which are to reduce unemployment rate within the states by 18.85, 11.01, 34.84 and 35.63% respectively. In the South West Zone only Lagos and Oyo states are expected to be responsible for MSMEs new employment generation of 546,665 and 339,406, which is expected to reduce unemployment by 41.12 and 65.12 respectively by 2021.

It is expected that economic managers in these states should take advantage of the opportunities that agriculture provides and focus on the crops where there states have comparative advantage in other to meet both the expected employment generation and the reduction of unemployment in their states through MSMEs. If MSMEs is the bird that will lay the golden eggs, it therefore means that the strategies for MSMEs development and survival across the 36 states in Nigeria should take a well thought out, clear and defined action plan in 2021.

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