Why SMEs are failing in Nigeria

Poor sustainability programmes for businesses as well as a lack of values and ethics have been identified as major contributory factors to the failures of small, and medium-scale enterprises (SMEs) in Nigeria.

These challenges are, however, in addition to other factors such as harsh economic environment, inadequate capital, and poor management, according to some professionals.

The professionals said sustainability involves programmes, actions and initiatives aimed at preserving and adding value to businesses. They spoke recently in Lagos at the maiden annual conference of the Young Directors Forum, Institute of Directors (IoD), Nigeria, with the theme “Building a sustainable business: the place of sustainability reporting.”

The event provided an opportunity to discuss sustainability reporting and corporate governance strategies and how these concepts can be deployed to drive the continued existence of businesses.

Akin Ogunbiyi, group chairman, Mutual Benefits Assurance Plc, who was chairman of the occasion acknowledged that entrepreneurs should create long-term growth and prosperity for their businesses. But in doing this they should consider that sustainability is “our society’s ability to exist and develop without depleting natural resources needed to ensure, on a continuous basis, a healthy planet”.

Read also: Lack of sustainability initiatives identified as major contributor to failure of SMEs

Also speaking, Omobolanle Victor-Laniyan, head, group sustainability in Access Bank, who looked at what sustainability means to business, said it was about responsibility, acting and thinking as responsible government, individuals and businesses.

Omobolanle, a sustainability expert with experience across different sectors, added that sustainability was about meeting the needs of today without compromising the environment for tomorrow’s needs.

According to her, making profits should not be at all costs but in an ethical manner and ensuring that the acts taken today do not have a negative impact tomorrow.

“A business must be long-term focus. To do this, the business must sacrifice some profit today to exist for the long term. Sustainability may look difficult in the short-term, but organisations are planning for tomorrow”, she told the audience of young entrepreneurs at the forum.

Folashade Akinmusire, chairperson of the young directors’ forum of the Chartered Institute of Directors, said the programme was organised to cater to the needs of SMEs which contribute about 54 percent of Nigeria’s GDP.

“Lagos alone has over 100 million start-ups and businesses, but if we look at our economic landscape, we find that a lot of them are dying. It is not just to start a business, you have to start a business that stays sustainably, not just for now, but also for the future,” she said.