Prospects for enhancing the performance of micro and small-scale nonfarm enterprises in Niger

This study examines Niger"s SME sector and assesses the growth prospects for individual subsectors (mats, skins and leather products, metal products, and transport). It also provides recommendations concerning policies, regulations, and direct interventions to enhance small enterprise economic growth. Growth of these nonfarm enterprises depends largely on Niger"s ability to: (1) increase domestic demand in primary sectors, such as agriculture and natural resources; (2) expand its share in export markets, especially for hides, skins, and leather products; and (3) eliminate the bottlenecks or distortions in the economy stemming from policy, regulatory, and social impediments or by limited access to new technologies and markets. The study concludes that the current system of market taxes is regressive and discourages participation in commercial activities by small entrepreneurs. It also drains limited rural purchasing power into the hands of those with expenditure patterns geared towards imported goods. Decreased reliance on such taxes, perhaps by efforts to capture a larger share of transport expenses for the government budget, could help promote small enterprises. There is also a need to improve product and market development either through direct extension (with PVO"s playing the leading role) or by strengthening market-based systems involving prices and traders and developing mechanisms that can provide cost-effective ways of reaching large numbers of dispersed suppliers.