7.8million SMEs in Nigeria risk folding up every two years


7.8million SMEs in Nigeria risk folding up every two years

Within the last two years, no fewer than 7.8 million Small businesses that once existed in Nigeria no longer exist, according to the president of the Association of Small Business Owners of Nigeria, ASBON, Femi Egbesola who spoke to journalists in an interview.

Mr Egbesola said the 7.8 million businesses represent 20 percent of the 39 million businesses captured by data in the country.

This was as the ASBON president commended the initiative by president Bola Ahmed Tinubu which he said is beneficial to Small and medium enterprises in the country.

Mr Egbesola however, drew the attention of the government to the issue of diversion if funds and palliatives that have over time, proven to be yet another phenomenon in the country.

He warned that if the government fails to liaise with the leadership of relevant associations, corrupt politicians will again, thwart his plans and render Nigerians who really need the intended Palliatives with nothing while they enrich their pockets.

Egbesola added that the government must move swiftly to address the harsh business environment faced by businesses as the palliatives would have little effect if the environment remains harsh.

In his words, “Our statistics remain the same, and it is even more profound. I can categorically tell you now that 20 per cent of businesses have gone under within the past two and a half years, from January 2021 till date.

“Today, according to our survey, we have about 39 million existing businesses that are captured by data. 20 per cent of that is gone. If you look at 20 per cent of that is 7.8 million businesses that have gone under.”

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“We have to know the terms and conditions of accessing the palliatives. In times past, we have had wonderful interventions like this, but most times, it ends in the hands of people who are not business owners.

“One thing is to have a policy; another thing is to have effective monitoring and implementation of that policy. If the government chooses to give palliatives to SMEs, that is fine. The next thing is to ascertain that it is actually the business owners that access this fund.

“One way that business owners can access this fund is by making the conditions affordable and accessible to that sector. 96 per cent of those in businesses are in the nano and micro sector, and these are people who are informal and mostly illiterates. So, if you come up with a policy like this, if the process is not done well, you may seclude this sector from benefitting from it.”

Relatedly, the Small and Medium Enterprises Development Agency of Nigeria, SMEDAN, in 2022, conducted a research which revealed that at least two million SMEs in the country crashed between 2017 to 2021.

ASBON’s survey was in line with the report deduced from the 2022 findings by SMEDAN.

Meanwhile, SMEDANs’ Director-General, Dikko Radda, had also disclosed that the number of SMEs in the country dropped from 41 million to 39 million.

He said, “According to the 2021 MSME Survey, there are 39 million MSMEs in Nigeria. This is a significant drop from 41 million MSMEs reported in the 2017 survey report.

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“Going by ASBON’s report, this number has dropped further from 39 million to 31.2 million SMEs.”

In a related development, the National Vice President of the Nigerian Association of Small and Medium Enterprises, Solomon Aderoju blamed the collapse of the SMEs chiefly on harsh business environment.

He said while the government has also not expressed readiness to address the challenges, the abrupt dismissal of SMEs from the market space was chiefly due to high cost of operations, inflationary pressure, over-taxation, lack of access to funding and many more.

“The reason is obvious. The high cost of operations, lack of funding, poor infrastructure, multiple taxes. Today we went to LIRS where we talked about multiple tax and how it is affecting the SMEs.” he said.

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