Prospects for Enhancing the Performance of Micro- and Small-Scale Nonfarm Enterprises in Niger

This paper presents the findings of a study of over 18,600 micro and small enterprises and their role in the development of Niger. It examines the magnitude and principal characteristics of small and micro enterprises in selected urban and rural areas, and identifies the key constraints hindering their growth and development.

The paper further provides recommendations concerning policies, regulations, and direct interventions for enhancing the contribution of small and micro enterprises to broad-based economic growth. The paper concludes that two principal themes emerge from the study with regard to intervention needs:

• First, the system of market taxes, in addition to being regressive, discourages participation in commercial activities by small entrepreneurs. It also drains the limited rural purchasing power into the hands of those with expenditure patterns focused on products brought in from the outside, thereby reducing the rural multiplier. Decreased reliance on such taxes, perhaps made possible by efforts to capture a larger share of transport expenses from the government budget, could make an important contribution to the promotion of small enterprise;
• Second major area for improvement is product and market development. This can best be achieved through direct extension, with nongovernmental and private voluntary organizations playing the leading role. Such extension can be most effective when it is based on sub-sector studies aimed at exploring linkages, intervention points, and development potential of different categories of products and producers. In addition to direct extension, efforts should be made to strengthen market-based systems involving prices and traders, and mechanisms that can provide cost-effective ways of reaching large numbers of dispersed suppliers.