By capital Watch Media
Industry experts see a bleak fourth quarter for small businesses despite government interventions to boost the subsector.
The President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, and the Deputy National President of the Nigerian Association of Small Scale Industrialists, Segun Kuti-George, in a chat with The PUNCH, expressed deep concerns over the future of small businesses.
Egbesola described 2024’s final quarter as the “worst time” for small businesses in recent memory.
He said that the subsector was not expecting anything positive due to the ongoing challenges weighing on businesses, including currency devaluation, the removal of fuel subsidies, multiple taxes, and power supply issues.
The ASBON president remarked, “This is the worst time in the history of those in our sector. We are faced with a back-to-back avalanche of challenges.”
He added that several businesses had shut down, with about 10-15 per cent of businesses closing shop, while some owners had resorted to menial jobs or relocated abroad.
The ASBON president also expressed disappointment in the inefficiency of recent government intervention, particularly the delayed implementation of promised policies, such as zero VAT on small businesses and zero duty on select food items aimed at curbing inflation.
We heard of the sustainability plan to intervene in quite some sectors, but we have not seen it happening,” he said, adding that instead of relief, businesses face rising costs.
Egbesola mentioned the high cost of borrowing, driven by an elevated monetary policy rate of 27.25 per cent, as another point of concern.
He stressed that the prohibitive interest rates made it nearly impossible for businesses to access much-needed funds.
“It is not sustainable now to go to the bank to borrow money at that kind of interest rate,” he lamented, adding that inflation had eroded the value of capital, leaving many businesses unable to purchase raw materials
Egbesola criticised the disbursement of the promised N5m to small and medium enterprises, noting that only a few businesses had received the N50,000 nano loans.
“What will N50,000 do to the economy? How evenly was the money distributed?” he quizzed.
However, Egbesola was pleased that some businesses were finding creative solutions, such as exporting to larger markets and leveraging technology for sales.
He also expressed hope that 2025 might bring better opportunities, particularly if inflation stabilises and investor interest in the country grows.
“We are optimistic that things can’t go this way. Things must improve,” he stated.
The NASSI National Vice President, Segun Kuti-George, noted that many businesses might not survive without significant policy changes or financial relief.
He expressed frustration with the government’s handling of policy changes, especially the removal of oil subsidies, which he said was deceitful.
“(The Federal Government) talking about the removal of subsidies now, when it was the first thing that was announced when the government came in, sounds very deceitful.
“So, they were still paying subsidies, and they told us that—I mean, if they had told us that it had been partially removed, we would have known that they had to do something to reduce it. But they said all subsidies were gone.
“When you say something is gone, why are we still talking about it? That is one aspect of the pain.
The removal of oil subsidies is a very painful one. It has increased the cost of raw materials, machines, and virtually every input.”
According to Kuti-George, this has significantly reduced the competitiveness of locally produced goods, leading to decreased turnover and profit for businesses.
While he acknowledged that the government’s removal of tax for businesses with less than N25m turnover was positive.
He argued that it was outdated.
“The value of N25m now is less than N10m,” the NASSI VP said, suggesting the threshold should be updated to reflect current economic realities.
Further, both leaders harped on government funding for small businesses, which they described as insufficient and poorly managed.
Kuti-George appreciated the recent Memorandum of Understanding signed by NASSI and the Bank of Industry to disburse N75,000 to vulnerable members.
However, he urged the government to work more closely with more business membership organisations, such as NASSI, to ensure proper disbursement and monitoring of loans.
He argued that involving such organisations would improve transparency and ensure that funds reach the businesses that need them most.
“Who feels it, knows it. Many of these policies exclude the business membership organisations,” he remarked, emphasising the importance of collaboration between the government and business associations.
