Fear of SME sector’s collapse grips MAN

…urges govt to guarantee loan

The Nigerian Small and Medium Enterprises (SMEs) sector has expressed fear over the continued closure of factories on account of harsh operating environment.

Lamenting over the worrisome situation, Uba Obasi, chairman, Manufacturers Association of Nigeria (MAN), Imo/Abia branch, noted that if nothing is done soon to ameliorate the situation, the sector will finally collapse.

He blamed the tough times the sector is passing through on the Federal Government, while describing the manufacturing environment as well as business conditions as unattractive and very harmful to the growth of businesses in the country.

In a telephone interview, Obasi, who is also the managing director of Akachi Industries Limited and Geepee Group, decried the rate at which factories are closing shop due to unhealthy business environment.

He also stated that multinational companies are leaving the country because of the low purchasing power of many Nigerians.

“The Small and Medium Enterprises (SMEs) sector is collapsing and businesses are closing down on a daily basis. What is happening to the SMEs sector is not encouraging,” he said.

Obasi bemoaned the prevailing high inflation, saying, “Everything you are importing to run your factory, including the raw materials, is tied to the Dollar. Now, the exchange rate is over N1,700 per Dollar. If it gets to N2,000, the sector will collapse,” he said.

He also warned that the government should not behave as if all is well in a country that is economically sinking, while something reasonable should be done to strengthen the naira-dollar rate.

Obasi, a seasoned entrepreneur, said that the lack of access to funding is a big challenge for manufacturers, urging the federal government to hasten up whatever it wants to do to ensure easy access to funding that would inject life in the SMEs sector.

“Even now, the funding that is also provided by the federal government is with conditions.

“Again, you want to give them money and the Bank Of Industry (BoI) is asking for a guarantee. The federal government should guarantee the money and then BOI should disburse to manufacturers and that is the best way and the best thing to do.

“You cannot say that you are giving them money and you give them the conditions that a lot of them cannot meet. If they have access to funds they will not ask for your loan,” he said.