Nigerian businesses need more than loans to grow, Finance Minister

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, says Nigerian businesses need more than regular loans to grow. He called for patient capital, experienced investors, and stronger support from institutions to help promising businesses expand.

Mr Oyedele said just having access to credit will not solve the challenges facing entrepreneurs. Many of them struggle to get the money, skills, and connections they need to grow their businesses.

He spoke on Saturday in Abuja at the fourth edition of the Nigeria Sovereign Investment Authority (NSIA) Prize for Innovation, where seven startups received awards totaling $277,000.

Speaking through his Special Adviser on Finance and Investment, Marie Ukpere, the minister said small and medium-sized businesses are crucial for jobs and livelihoods but often do not have the resources to grow.

"We also recognise that high-potential businesses often require more than conventional credit. They need patient capital, experienced investment partners, and networks that can help them enter new markets and achieve scale," he said.

Mr Oyedele added that Nigeria's goal of becoming a $1 trillion economy depends on helping small businesses grow into medium-sized and larger companies that can compete globally.

More than just loans

The minister talked about several government-backed institutions and programs aimed at making it easier to finance and support business growth.

He mentioned the Development Bank of Nigeria and the National Credit Guarantee Company as part of efforts to help with financing issues. The credit guarantee company aims to lower lending risks for banks while encouraging more loans to small businesses and manufacturers.

He also mentioned the Nigerian Consumer Credit Corporation, which is meant to increase access to consumer credit and support household spending. The $618 million Investment in Digital and Creative Enterprises program helps young entrepreneurs with financing and support.

Mr Oyedele said the NSIA is also setting up venture capital funds to draw in institutional investment into Nigerian businesses.

He added that the authority is creating an impact innovation fund with the Japan International Cooperation Agency, and British International Investment is interested in joining.

This fund will support viable businesses that tackle economic and development issues. "The real measure of your success will not be the prize you receive today. It will be the businesses you go on to build afterwards," the minister told the finalists.

Earlier, the Managing Director and Chief Executive Officer of the NSIA, Aminu Umar-Sadiq, said the 12 finalists were chosen from over 6,000 applications after five rounds of screening and business development.

He said this competition is part of the authority's plan to help entrepreneurs alongside its investments in infrastructure and other areas.

This year, the competition focused on healthcare, manufacturing, and food systems, which Mr Umar-Sadiq said have the potential to create jobs, build skills, and improve productivity.

He mentioned that all 12 finalists will take part in a six-week learning program at Lagos Business School, while strategic partners will provide more chances for financing and business growth.

According to him, the NSIA collaborates with companies it invests in to improve governance, management, and demand for their products.

"When the equity injection goes into these companies, we work very closely with the management teams to enhance their value proposition, strengthen their governance, and broaden the demand for their products," he said.

Mr Umar-Sadiq pointed to past winners like Money Africa and Sycamore as examples of businesses whose growth should be tracked over time.

He mentioned that the impact of startup investments should be assessed over about five years, not judged by immediate results.

Healthcare investment opportunities

Abdu Mukhtar, the National Coordinator of the Presidential Unlocking Healthcare Value Chain Initiative, spoke about healthcare being a major investment opportunity.

He estimated Nigeria's healthcare market at $20 billion and noted there are around 250,000 small and medium-sized businesses in this sector, according to the International Finance Corporation.

"We estimate that across the healthcare value chain, the addressable market is about $20 billion. There are already about 250,000 SMEs in healthcare, according to the IFC," he said.

Mr Mukhtar pointed out areas like pharmaceutical manufacturing, medical devices, clinical research, telemedicine, and healthcare logistics as spots where entrepreneurs could build businesses.

Affiong Williams, founder and CEO of ReelFruit and lead judge of the competition, said her company has raised over $7 million over 14 years. She credited her ability to attract investment to preparation, credibility, and resilience. She urged entrepreneurs to understand customer needs, build strong networks, and stay focused despite economic challenges.

Dave DeLucia, founder and director of Cascador, said getting businesses ready for investment is just as important as having capital.

"Capital readiness is just as important or more than the capital itself," he said. He added that entrepreneurs outside Lagos often need more institutional support.

Seven startups receive awards

At the competition, Come Again Foods took home the top prize of $105,000.

Protein Kapital came second with $70,000, while InstantRad placed third, winning $50,000.

Other winners included Eight Medical, Uwana Energy, Tryctor, and Smartei Agri Tech.

The NSIA said the total award package of $277,000 included $220,000 from the authority, $45,000 from Cascador, and $12,000 from Wema Bank.

Besides the cash, the finalists will get business development support and chances to connect with potential investors.

The competition is part of NSIA's efforts to help innovative businesses grow into sustainable enterprises in Nigeria.