According to the president of the Association of Small Business Owners of Nigeria, 7.8 million small businesses in Nigeria have disappeared in the last two years, representing 20% of the total number of businesses in the country. He praised a government initiative that supports small and medium enterprises but also warned about corruption and the need for a better business environment. A research conducted by the Small and Medium Enterprises Development Agency of Nigeria confirmed the decline in SMEs, citing factors such as a harsh business environment, high costs, lack of funding, and multiple taxes as reasons for their collapse.
According to the president of the Association of Small Business Owners of Nigeria, ASBON, Femi Egbesola, 7.8 million small businesses in Nigeria have ceased to exist in the last two years. This represents 20% of the 39 million businesses in the country.
Mr. Egbesola commended the initiative by President Bola Ahmed Tinubu, which he believes will benefit small and medium enterprises. However, he warned about the issue of diversion of funds and palliatives, which has been a problem in the country.
He emphasized the need for the government to work with relevant associations to ensure the intended palliatives reach those who truly need them and not corrupt politicians who enrich themselves. He also highlighted the importance of addressing the harsh business environment faced by businesses for the palliatives to have a significant impact.
Additionally, a research conducted by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in 2022 revealed that two million SMEs in the country had crashed between 2017 and 2021. ASBON’s survey aligns with this report. SMEDAN’s Director-General, Dikko Radda, also stated that the number of SMEs dropped from 41 million to 39 million.
The National Vice President of the Nigerian Association of Small and Medium Enterprises, Solomon Aderoju, attributed the collapse of SMEs mainly to the harsh business environment. He cited factors such as high cost of operations, inflationary pressure, over-taxation, and lack of access to funding as contributing to the dismissal of SMEs from the market space.