Members of the organised private sector have lamented that the country’s mounting inflation rate and growing cost of energy following recent increase in fuel price are driving small and medium enterprises (SMEs) into oblivion even as the economy suffers from the impact of COVID- 19.
The OPS, comprising of the La-gos Chamber of Commerce and Industry (LCCI), Manufacturers Association of Nigeria (MAN), Nigeria Employers’ Consultative Association (NECA), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Nigerian Association of Small and Medium Enterprises (NASME), and Nigerian Association of SmalI Industry (NASI), stated emphatically that further hardships had hit SME businesses in the country with many of them going under despite Federal Government’s palliative measures.
Speaking on the development in an interview with this newspaper in Lagos, the President of LCCI, Mrs. Toki Mabogunje, admitted that the global eco-nomic landscape challenged by the coronavirus pandemic and associated containment measures had put a sizeable number of SMEs in dire financial straits.
She said that government’s economic measures like the recent hike in premium motor spirit otherwise known as petrol and the alarming inflation rate were hitting bad on SMEs with many of them facing challenges that are posing a significant threat to their bottom-line.
The LCCI president explained that the impact of the COVID-19, inflation rate, hike in fuel pump price were now more pronounced on SMEs operating in Nigeria given their limited monetary framework to adequately respond to t shocks. According to her, businesses are increasingly finding it difficult to meet contractual debt obligations given the pressure on earnings. She added that the prevailing macroeconomic fundamentals at global and domestic levels were unfavourable to businesses and could potentially escalate business mortality in the near term, if unaddressed.
Similarly, the MAN President, Engr. Mansur Ahmed, told New Telegraph that the burden being faced by business owners in contending with the reality of economic challenges in the country presently had reached a point of no retreat no surrender for operators. Ahmed pointed out that the country’s inflation rate had affected all facets of businesses with owners feeling the pulse in their day to day activities.
The MAN president also explained that he was wary of the effects of the new fuel regime on businesses, including SMEs and local manufacturers, saying it was going to spike inflation in the country.
On cushioning the effect, the MAN president explained that government introduced a number of impressive initiatives in form of economic policies, schemes and projects aimed at encouraging businesses and consolidating prior achievements. “Among such commendable government initiatives in the year are specific stimulus packages such as N50 billion facility for SMEs and households, N100 billion for healthcare and pharmaceuticals, and N1trillion for manufacturing and agricultural sectors,” he said.
Some SME operators lamented their frustration to our correspondent as inflation and recent increase in pump price of fuel takes toll on their investments. According to Samson Badejo, he was in the middle of expanding his existing food service business when prices were hiked. This, in addition to inflation largely driven by “legacy structural factors such as the inadequate state of critical infrastructure and broad-based security challenges across the country,” is forcing business owners to close shops on increased overhead costs, including him.