By Merit Ibe
Centre for the Promotion of Private Enterprises (CPPE) has applauded Nigerian micro small and medium enterprises (MSMEs) for demonstrating resilience despite numerous headwinds in the business environment.
Director of the Centre, Dr Muda Yusuf, made the remark at the Nigerian Association of Small and Medium Enterprises (NASME) Roundtable, themed: MSMEs: The Catalyst for Nigeria’s Economic Rejuvenation and Growth, where he noted that the mortality rate among the MSMEs in our economy is very high.
He listed the challenges to include the structural constraints, especially around infrastructure, the naira exchange rate depreciation and the related liquidity crises in the foreign exchange market, the galloping inflation, weak purchasing power, regulatory compliance costs, high transaction costs at our ports, the multiplicity of taxes and levies, high cost of logistics, insecurity effects on the agricultural sector, influx of cheap Asian products into the Nigerian markets, the cost of fund, to mention a few.
Yusuf said these are very challenging times for businesses, especially the MSMEs. Any MSME that is still standing, despite the prevailing difficulties deserves to be celebrated and specially commended.
He noted that the theme of the roundtable was apt and underlines the critical role of MSMEs in the nation’s journey towards sustainable economic recovery and growth.
“The MSMEs are the pillars and the life wire of the Nigerian economy. They are the major sources of the resilience that the Nigerian economy had long been reputed for, amid numerous shocks. We are currently going through another round of shocks inflicted by the fuel subsidy removal and partial unification of the exchange rate.
“ Even though these reforms were desirable, the social outcomes have been very profound. We have seen significant surge in inflation across the broad spectrum of products, food and non-food, driven largely by sharp depreciation in the naira exchange rate and increases in energy costs.
“These have taken a huge toll on business sustainability, profit margins, job retention and capacity of small businesses to service their loans. Meanwhile there is the lingering effects of the Russian – Ukraine war.
He noted that if we must promote economic growth and inclusion, we must bring the MSMEs on board.
“The government needs to put in place the support infrastructure to facilitate the growth of MSMEs. We should also not leave the informal sector behind. We should have strategies to de-risk manufacturing enterprise and ensure their sustainability, promote linkages between the large and small enterprises and entrench the concept of clusters for small scale industries.
“We need to promote technology adoption by our MSMEs. Any business that is not embracing technology is at the risk of extinction. We cannot emphasize this point enough; we need to adopt technology in our production processes.
“We need to adopt technology in our business processes to make our processes a lot more efficient and cost effective.”