Experts have called for the adoption of measures that will protect the Small and Medium Enterprises (SMEs) in Nigeria, and curb the escalating costs, supply chain disruptions, and tumbling aggregate demand in the economy.
They also advocated the application of the Local Content Act in all areas of the economy, to mitigate the impact of the coronavirus (COVID-19) pandemic, and save small businesses.
President, Lagos Chamber of Commerce and Industry (LCCI), Mrs Toki Mabogunje, who led the call at the 21st virtual Annual General meeting of the International Chamber of Commerce Nigeria (ICCN), stressed the need for the passaging of the Small Business Bill into law, saying it will lead to the development and sustenance of SMEs in the country.
She said such measures, plus the proper implementation of earlier fiscal and monetary intervention programmes as well as supply chain inclusion by large corporates will significantly moderate the impact of the pandemic and save the SMEs.
While acknowledging the positives from the N2.3 trillion budget Nigeria Economic Sustainability Plan, Mabogunje recalled that the International Monetary Fund (IMF), recently downgraded its global growth, and estimated the world economy to contract by 4.9 per cent by year-end amid weak recovery by 2021.
On the domestic front, the Nigerian economy is tipped to record its most severe contraction in four decades, adding that while various interventions have been made globally by the fiscal authorities, Central Banks, and private corporations to rescue economies from collapse, it is important to track these interventions to determine whether the stimulus measures achieved the desired outcomes.
She noted that SMEs in Nigeria are grappling with the challenges of breach of contractual obligations, inability to retain staff, cost escalation resulting from exchange rate depreciation, loss of foreign credit lines, burden of loan repayment, collapse of consumer purchasing power, escalating receivables and sharp drop in sales and turnover.
To save the SMEs, Mabogunje said the adoption of technology in today’s increasingly complex and highly unpredictable environment is crucial, just as equipping SMEs with essential digital skills will sharpen their digital businesses for continuity and sustainability.
Contributing, the Chairman, ICC Nigeria & Regional Coordinator, sub-Sahara Africa, Babatunde Savage, said the survival of SMEs and their workers depend on getting access to governments’ support and information rapidly.
He argued that preserving the viability of SMEs is critical as well as providing immediate, reliable and up-to-date access to information, access to benefits and support to ensure that in need of assistance received it timely.
Savage urged governments to increase information dissemination and support by delivering it through the channels most used by SMEs, such as digital platforms, mobile phone payment tools, applications and mobile communication.
He said businesses, chambers of commerce, and other stakeholders can also serve as hubs for disseminating important information, and aggregating critical needs and concerns, and urged the adaptation of existing government-led social programmes, which are needed to shore up the economy and protect businesses and workers in the short-term.
He called on governments to reverse and ban all tariffs, quotas and other non-tariff measures that affect the deployment of medical equipment, medicines and other essential goods and services, including foodstuff, adding that effective responses to the COVID-19 pandemic will require whole-of-government, whole-of-society approaches.