The Organised Private Sector (OPS) on Wednesday reiterated the need for the government at all levels to come up with intervention plans to keep Small and Medium-sized Enterprises (SMEs) in business following the removal of fuel subsidy.
The OPS, comprising the Manufacturers Association of Nigeria (MAN), Nigeria Association of Small-Scale Industries (NASSI) and the Benin Chamber of Commerce, Industry, Mines and Agriculture (BENCCIMA), made the call following the hardship and difficulty unleased on businesses by subsidy removal.
In an interview with BusinessDay in Benin City, the OPS said small-scale businesses, which are catalysts of economic growth, were already struggling to survive and may completely drown with the removal of subsidy if there are no efforts to cushion the aftermath effect.
Noma Iguisi, chairman Edo State branch of NASSI, said the fuel hike has generated a serious inflationary trend as the cost of transportation, prices of raw materials and other consumables have gone up.
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He, however, suggested the provision of grants, low-interest rate loans to enable businesses expand and retain their staff, payroll support for businesses for a period of six months as well as guaranteed offtake for SME products for a period of time.
“Removal of subsidy will adversely affect SMEs as prices of fuel at the moment is going for between N400 and N700. A number of workers could not even go to work on Tuesday after the announcement of subsidy removal by President Bola Tinubu because many fuel stations were locked, transportation costs skyrocketed and vehicles were not enough to transport commuters to their respective destinations.
“A number of SMEs operate using gasoline to power their generators. This will also increase their production costs and you will agree with me that increasing salaries and wages of staff, raw materials and other costs of production is not sustainable and definitely not something many SMEs can handle at this time. The resultant effect is that many of these enterprises will be forced to shut down,” Iguisi said.
John Yusuf, the director-general, Benin Chamber of Commerce, Industry, Mines and Agriculture (BENCCIMA), urged the President Tinubu-led government to provide grants, reduce interest rates and ensure the implementation of the price control board.
Yusuf, while noting that SMEs require a lot of assistance to remain in business, said “With the removal of subsidy, every aspect of life will be affected. If you observe most businesses who transport their goods are already facing a tough time paying a huge sum. This will further influence businesses negatively but the government can intervene with some assistance.”
Also reacting, Okwara Udensi, chairman, MAN, Edo/Delta branch, said a boost to SMEs was pivotal to the dwindling economy, hence it was imperative for the government to push for a way to sustain businesses.
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