Franchising, a Potential Boost for MSMES, Nigeria’s Economic Growth – GIZ Report




By Tony Obiechina, Abuja

Franchising has been identified as a potential boost for Micro, Small and Medium Enterprises (MSMES) and Nigeria’s economic growth.

The Head of Programme Pro-Poor Growth and Promotion of Employment in Nigeria (SEDIN-GIZ), Mr Markus Wauschkuhn srevealed this in Abuja on Tuesday at a Private-Public Dialogue on Franchising based on an assessment report.

He explained that the assessment report further revealed that the opportunities that franchising could provide for business expansion, start-up survival, access
to finance, and generally job creation were all recognised.

According to him, the report and the position paper also highlighted some of the challenges of franchising in Nigeria
and recommended the strong need to improve the regulatory framework for franchising as well as increase capacity and awareness of franchise model among stakeholders.

He said, “based on this, SEDIN/NICOP has provided support to private sector actors in the industry, including the Nigeria Association of Franchise Business Members (NAFBM) and CTBA, to organise policy dialogues in Lagos and Abuja to discuss with stakeholders the challenges of the franchise industry and recommendations to address those challenges for growth.

“NICOP also recently supported some franchisable businesses in the agric sector to develop a franchise model. A report of that support would be shared with you later in the course of the programme.

“To upscale the support to franchise industry growth in Nigeria, SEDIN/NICOP is now also partnering with NESG-NASSBER on this Public-Private Dialogue (PPD) to address the crucial issues affecting the growth and development of the franchising industry in Nigeria, with specific
focus on the franchise market and the Franchise (Regulation) Bill”.

Mr Wauschkuhn was optimistic that the Dialogue will provide another opportunity for key stakeholders in the public and private sectors to interact on further ways to strengthen the franchise industry in Nigeria, and position it for growth.

He said to upscale the support to franchise industry growth in Nigeria, SEDIN/NICOP is now also partnering with NESG-NASSBER on this Public-Private Dialogue (PPD) to address the crucial issues affecting the growth and development of the franchising industry in Nigeria, with specific
focus on the franchise market and the Franchise (Regulation) Bill.

He thanked the NESG-NASSBER, NOTAP, NIPC and other key stakeholders for their presence which necessitated the success of the Dialogue.

In his opening remarks, a Board Member, Nigeria Economic Summit Group, Mr. Nnanna Ude said Nigeria’s large population presents great opportunities for Franchising business which has great potentials to improve the Gross Domestic Product of the nation, as it is the case in other climes.

Nnanna expressed optimism on the readiness of government to key into the huge job creation venture such as franchising.

“One thing is sure: Nigeria cannot continue with business-as-usual approach to policies and legislation if we must fast track economic growth and development.

“Local and international companies have embraced franchising as a successful strategy for business growth. According to International Franchise Association’s Annual report, franchises in the United States generates $1.6trillion in economic production annually, 5.8% of the Gross Domestic Product. Franchises produce goods and services worth $868.1billion in 2016 and paid out $351.1billion in wages. Franchises generate $929.9billion in GDP indirectly while 3.4 percent of the GDP in the private sector was made up of franchises.

“Nigeria’s large population presents and incredible business opportunities for franchises and the government has identified it as a viable for creating sustainable enterprises and are desirous of local franchise concepts.

“The Franchise Bill 2022 (SB. 969) which is currently in the Senate seeks to create a framework for the regulation of Franchising and guidelines for relationship between franchisors and franchisees.

“There is no doubt that sustained efforts form private sector working with relevant institutions will ensure that the Nigerian economy becomes globally competitive”, Nnanna said.

Also speaking at the dialogue on the status of the franchise market in Nigeria, the founder and president, Nigeria Association of Franchise Business Members, Chiagozie Nwizu emphasized the importance of legislation to back Nigeria’s franchise business.

“The Nigerian franchise business is at its infant stage and there is need to learn from those countries who have gone ahead of us. There is a need also for a franchising law which cover same”, he said.

While there are two separate bills on Franchising both at the House and Representatives and the Senate, stakeholders however agreed on the need to make collate impact from other stakeholders to boost the chances of the bill. They also advocated for a dedicated unit to drive the franchise business in the country.

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