The Development Bank of Nigeria (DBN) has urged Micro, Small and Medium Enterprises (MSMEs) in the country to embrace innovation and reinvent their current business models for sustainability in order to leverage growth opportunities in the post COVID-19 era.
The advice comes at a time calls have heightened on the Federal Government to urgently rejuvenate MSMEs to save jobs and the economy as countries across the world roll out pragmatic programmes to rejuvenate small businesses that have been hard hit by the coronavirus-induced lock-down.
Panelists at a DBN Webinar believe that Micro, Small and Medium Enterprises are the hardest hit by the Covid-19 crisis, as they have limited access to capital and now have to depend on few customer base.
Discussions at the web conference anchored by the bank’s Chief Economist, Joseph Nnanna, centered on the theme, “Alternative Financing Options for Sustainable Growth Post COVID-19 Lockdown”.
The Webinar series is aimed at providing capacity building and advisory services for MSMEs through digital platforms to ensure they are empowered to remain in business through this unprecedented period.
While dissecting the current implications of the Covid-19 pandemic on the Nigerian economy, the panelists pointed out that MSMEs are the hardest- hit by the crisis, as they have limited access to capital and now have to depend on few customer base.
While encouraging the MSMEs to stay afloat, they were however of the view that only those with innovative thinking and clear vision will be able to take advantage of the new normal.
“If you are an SME, the framework should be to survive the crisis period, have as much liquidity as you can and stem expenditure. You must stabilise the business by stabilizing your cost and reconfiguring your operations,” said a panelist, Andrew Alli, who is also the immediate Past President and Chief Executive Officer of Africa Finance Corporation.
He said “For instance, a five-star hotel in Lagos has outsourced their laundry and restaurant. You can now order takeaway and pickup of your laundry. The crisis will end, and we will return to a period of growth. A lot of things will likely change because of this pandemic.
“So, you also need to prepare for that era. You have to be innovative, have a clear vision, be ahead of the curve to take advantage of the new normal,” he advised.
On alternative sources of funding for MSMEs, George Ogbonnaya, Head SME, FCMB, stated that investors will be frugal in the post-COVID-19 era and will only be attracted to businesses that align purpose with strategic direction. He listed alternative sources of funding to include: Crowdfunding, Venture lending, Data driven lending platforms and Risk-Sharing Guarantees.
On her part, Toyin Sanni, CEO of Emerging Africa Capital admonished small business owners to ‘COVID-Proof’ their business, as quality and branded digital presence will stand as distinguishing factors in the present and post COVID-19 era.
“Quality and how you distinguish your brand from competitors will be very important. So, while saving as much as you can during this period, you should also invest in your brand and digitize your business.
“I would like to use the term ‘COVID-Proof’ for your business. Redesign your business such that you are able to do an end-to-end i.e. client acquisition, provision of services, and monitoring and evaluation should involve digital models,” she said.
Nigeria’s MSMEs have been known as the bedrock of the economy, accounting for over 95 percent of all the businesses in Nigeria.
Although the 41.5 million MSMEs contribute 50 percent to Nigeria’s GDP and account for 86.3 percent of employment, amounting to 59.6 million jobs, there are now concerns that many of these businesses are not sure of surviving the Covid-19 crisis, especially in the absence of a well-coordinated relief programme from government amid looming job losses.
Corroborating, MD/CEO, Urban Shelter, Sa’adiya Aliyu Aminu said being the major drivers, MSMEs will be crucial to reviving the Nigerian economy just like the sector did after the 2015 recession.
She also called on the Federal Government to reaffirm the made in Nigeria policy to promote local production and patronage and curb capital flight after the pandemic.
