SMEs closures seen after Covid-19 pandemic
Many small micro, small and medium enterprises (MSMEs) will go out of business after the coronavirus pandemic, experts say.
“I foresee many closures,” Ike Ibeabuchi, CEO of MD Services Limited, said.
“MSMEs in Nigerian are vulnerable to shocks and are fragile because of the environment in which they find themselves,” he said.
Coronavirus, also known as Covid-19, has killed tens of thousands of people across the world and disrupted social and economic lives of the people.
The United States is seeking additional $250 billion to complement $350 billion earlier budgeted as relief fund for small businesses in the country. The loans are meant to keep the economy running and jobs intact.
On the other hand, the Nigerian government is seeking $3.4 billion from the International Monetary Fund, $2.5 billion from the World Bank and a further $1 billion from the African Development Bank, according to Zainab Ahmed, finance minister.
Analysts are urging the government to ensure that part of the funds go to the MSMEs who have created more than half of jobs in the economy.
Bongo Adi, a Lagos-based economist, said that the impact of the pandemic was beyond what the MSMEs would handle and said government must create palliative measures.
Femi Egbesola, national president, Association of Small Business Owners of Nigeria (ASBON), said coronavirus was already having a negative impact on the operations of SMEs in the country as some were cutting down production.
“I have had several calls from our members that are into the manufacturing of pure water,” he said.
“They can no longer get enough supply of polyethylene for making sachet water and bottles because they are imported from China. No ship is leaving China currently because their factories have stopped production,” he further said.
He predicted that lots of SMEs would close shop if the spread of the outbreak was not controlled within the shortest possible time.
Degun Agboade, president and chairman of council, Nigerian Association of Small and Medium Enterprises (NASME), said the situation was becoming unbearable.
“It is really affecting us as we can no longer get supply of our raw materials. Even micro businesses that buy and sell cannot get supply of the goods they buy because most of them are majorly imported from China,” he said.
“Some are already shutting down since there is no material for production. Lots of our containers are waiting on the seaports in China for shipping but nothing is happening because of COVID 19.”
Odinaka Anudu & Josephine Okojie