By Daniel Essiet
The President, Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola and President, Association of Micro Entrepreneurs of Nigeria (AMEN), Prince Saviour Iche, have said with the impact of coronvirus(COVID-19), small businesses were left with small reserves and working capital, with the majority of them struggling to survive a prolonged reduced economic activity.
Egbesola fears that with this trend, the Nigeria Bureau of Statistics’(NBS) report that small and medium scale enterprises (SMEs) have contributed 48 percent to national gross domestic product (GDP) and account for 96 percent of businesses is expected to go down this year.
With about 17.4 million, SMEs account for about 50 per cent of industrial jobs and nearly 90 per cent of the manufacturing sector, in terms of enterprises.
“No doubt, with the scourge of the COVID-19 pandemic, figures and statistics that are being brandished around by NBS will drop. The MSME sector, particularly the manufacturing is the worst hit with the negative effects of the pandemic.”
Quite a number of MSMEs have closed shop and more will fold up or become ailing in no distant time. We (MSMEs) do not have the ability to bear the shocks created by this pandemic,” Egbesola said.
He noted that although government has tried quite a number of palliatives especially in the area of finance, the effects has been highly insignificant because the beneficiaries are very minute compared to the population of MSMEs in the country.
Egbesola warned that if nothing urgent is done by government to arrest the pending doom in the MSME sector, quite a number of jobs will be lost as it is already happening, the contribution of the SME to the national GDP will drop drastically, crime and vices will be on the increase, high inflation rate will be the order of the day, while the purchasing power of the consumers will nose dive.
Iche expressed concerns that despite the government efforts to assist small businesses, SMEs were still closing business. He noted that many local businesses have been hit by rising costs and monetary tightening at bank levels.