The Small and Medium Enterprises (SMEs) stakeholders and members of the organised private sector (OPS) have called for measurable reforms to enhance recovery for SMEs in the country.
This is even as they advocated intensifying efforts to transform the nation’s business environment from the crippling effects of economic hardships and policy complications.
The stakeholders, manufacturers and policy experts bemoaned that, SMEs have been severely hit by economic hardship, additional job loss and mass closure of firms due to economic hardships in the country.
According to ASBON, for SMEs to enhance recovery there is need for the government to embark on urgent reforms to address the challenges of SMEs, private sector and ailing businesses in the new year adding that over 8 million small businesses in Nigeria had shut down in 18 months due to economic hardships.
Speaking in an exclusive chat with LEADERSHIP, ASBON’s national president, Dr. Femi Egbesola said, with over 41 million SMEs in the country, 20 per cent already shut down, ‘this means that we have about 8 million businesses shut down.’
ASBON boss while surveying micro, small and medium enterprises (MSMEs) report hinted that, over 8 million SMEs crashed and shut down operations in 18 months between 2023-2024 due to the alarming trends of economic hardships.
Egbesola said, approximately 20 per cent of businesses were compelled to stop operations from January 2023 to June 2024, attributing this alarming trend to the economic policies implemented by President Buhari & Tinubu’s administration.
He confirmed that SMEs were grappling with the effects of fuel subsidy removal, floating of the Naira and many other confluence of factors that came in 2023, adding that 2024 came with many more death blows for the MSMEs ecosystem.
ASBON boss called for sustained efforts to bolster the growth of Micro, Small and Medium enterprises, (MSMEs) in the country adding that the move will enhance recovery and spur businesses to growth.
Egbesola noted that in the previous year, we had hyperinflation, hike in electricity tariff and other government levies, electronic money transfer bank charges, increase in fuel price, free fall of Naira, high interest rates due to increase in MPR, and many more, resulting in the ailing and eventual death of a number of businesses in the country.
He disclosed that small businesses are becoming more innovative and creative by using local input and raw materials to alternate for the very expensive imported ones.
He advised SMEs and business operators to simplify businesses by adopting technology in processes to reduce costs such as using Google map to determine best travel time to do supplies vis a vis road traffic that may drain travel time and fuel.
“We expanding our market reach through exports and social media, becoming more innovative and creative by using local input and raw materials to alternate for the very expensive imported ones, forming joint partnerships with other like businesses rather than run businesses alone and bear all costs:”
On funding, he said SMEs now go for funding and finance through cooperative societies and online lending platforms that offer lower rates and friendly terms and conditions rather than go through the commercial banks with very high interest rates.
He said, unfortunately the SMEs have reduced the quality and quantity of their products just to remain in business.
SMEs expert, Daniel Dickson-Okezie, stressed that, most small businesses are finding it difficult to cope with the economic reality of today, decrying that most of them are just hanging on. He pointed out that some of the survival strategies adopted by businesses include network platforms with other SMEs, which comprises potential customers , suppliers distributors and other stakeholders, “so as to make it easier for them to have access to the market and survive.
“Some have adopted strategies of adopting cooperative societies particularly those that are in the same value chain, with the goal of assessing cheap funds considering the high interest rate. Some have diversified, adding products to what they have already to their goods and services. Some are keeping more informed, monitoring and keeping track of government’s policies. Some are resorted to cost effective energy sources. Others have learnt to be cautious of the high inflationary rate taking cognisance in their plans,” he emphasised.
The director-general of MAN, Ajayi Segun-Kadir urged the need to grow the domestic economy to attract foreign direct investment.
He said Nigeria needs to focus on FDI to attract foreign investors and retain inclusive development for the economy through foreign relations.
He stated that Nigeria does not have industrial policy that would guide the country’s foreign relations while he decried that the manufacturing sector has not been historically handled very well by the Nigerian government.
Ajayi-Kadir further emphasised the need for the swift passage of pending tax bills and the revision of electricity tariffs to align with actual consumption, ensuring a more equitable and efficient framework for businesses and consumers alike.
On her part, former president of the Lagos Chamber of Commerce and Industry (LCCI), Toki Mabogunje, highlighted the role of sub-national governments in driving reforms. She called for the modernisation of reforms and global competitiveness in the SME sector.
Other stakeholders at the event called for targeted, measurable reforms to enhance the ease of doing business in Nigeria.
Chairman, SMEs Group (LCCI), Daniel Dickson-Okezie advised that, for businesses to get back and work again, government needs to tackle insecurity which affects all and sundry including buyers, sellers, businesses and SMEs, adding that, the earlier government takes the issue serious and wipe out all form of instability, the better for businesses and the economy.