SMEs, OPS push for reforms to reverse economic hardships

BY MOTOLANI OSENI

Small and Medium Enterprises (SMEs) stakeholders and members of the Organised Private Sector (OPS) have called for urgent reforms to aid recovery and alleviate the economic challenges faced by SMEs in Nigeria.

The stakeholders, including manufacturers and policy experts, expressed concern over the severe impact of economic hardships, which have led to job losses and the mass closure of businesses.

According to the Association of Small Business Owners of Nigeria (ASBON), over 8 million small businesses have shut down in the past 18 months due to these challenges. Dr Femi Egbesola, ASBON’s national president, disclosed that approximately 20 per cent of the nation’s 41 million SMEs ceased operations between January 2023 and June 2024.

Egbesola attributed this trend to policies implemented during the Buhari and Tinubu administrations, such as the removal of fuel subsidies and the floating of the Naira. He noted that these measures, compounded by inflation, high interest rates, and soaring electricity tariffs, have created a challenging environment for SMEs.

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To address these issues, Egbesola called for sustained efforts to promote the growth of Micro, Small, and Medium Enterprises (MSMEs). He urged the government to implement reforms to reduce hyperinflation, stabilise the Naira, and provide affordable financing options.

Despite the difficulties, some SMEs have adopted innovative measures to stay afloat. Egbesola highlighted strategies such as the use of local inputs to replace costly imports and leveraging technology to cut operational costs. Businesses have also expanded their market reach through social media and export opportunities, while forming partnerships to share costs and resources.

Funding remains a critical issue, with many SMEs turning to cooperative societies and online lending platforms for affordable financing, avoiding the high interest rates of commercial banks. However, Egbesola admitted that some businesses have had to reduce the quality and quantity of their products to remain in operation.

SME expert Daniel Dickson-Okezie noted that most small businesses are struggling to survive. He recommended strategies such as networking with other SMEs, joining cooperative societies, and diversifying product lines. Dickson-Okezie also stressed the importance of monitoring government policies and adopting cost-effective energy solutions to mitigate the effects of inflation and high production costs.

The Director-General of the Manufacturers Association of Nigeria (MAN), Ajayi Segun-Kadir, called for measures to attract foreign direct investment (FDI) and stimulate inclusive economic development. He criticised the lack of an industrial policy to guide the country’s foreign relations and emphasised the importance of passing pending tax bills and revising electricity tariffs to reflect actual consumption.

Former Lagos Chamber of Commerce and Industry (LCCI) President Toki Mabogunje highlighted the role of sub-national governments in driving reforms. She advocated for the modernisation of policies to enhance global competitiveness in the SME sector.

Other stakeholders also emphasised the need for targeted reforms to improve the ease of doing business. They called on the government to address security challenges, which have severely impacted businesses by disrupting supply chains and deterring buyers and sellers.

Chairman of the SMEs Group at LCCI, Daniel Dickson-Okezie, warned that without tackling insecurity and creating a stable business environment, efforts to revive SMEs and the broader economy would remain futile.