Despite the federal government’s efforts to lift the economy out of recession, around 22 million micro, small and medium-sized enterprises (SMEs) in Nigeria are now endangered due to the inadequacy of the stimulus package for the sector.
The government had planned to spend around 2.3 trillion naira to help the flow of money in the personal sector that was hit by the effect of COVID-19, however, some study reports and the organized personal sector, PAHO, the Teams indicated that the various stimulus disbursements were not successful at the target companies.
The effects of Financial Vanguard show that maximum disbursements have not yet been performed, a scenario that would possibly have generated anxiety among target beneficiaries.
Some PAHO executives said that even the disbursements already made were unsuccessful in a significant number of corporations they were meant to support.
As a result, PAHO is involved that in addition to the millions of corporations that have already filed for bankruptcy in the first part of this year, several million more are at risk of collapsing before the end of the year.
Poll reports from the Fate Foundation, a non-governmental organization for business progress, and BudgIT, a public sector-focused company, show that approximately 53% of the country’s 41 million MSMEs are lately on the brink of collapse.
Specifically, reports indicated that 22.8% of the corporations surveyed said they were sure to survive the pandemic, while 30% were convinced that their corporations would survive, for a total of about 52.8% under the risk of extinction after COVID-19Array.
Only 47.1% of respondents were convinced they will survive.
Stakeholders in the MSMES sector lament the sector’s forgetfulness that already faced many demanding situations before the pandemic.
Prince Degun Agboade, president of the National Association of Small and Medium-sized Enterprises (NASME), said many MSMEs were falling into oblivion, while Muda Yusuf, ceo of the Lagos Chamber of Commerce and Industry (LCCI), said the government will strengthen support for industry intervention if it wants to weather the coming recession.
According to the Fate and BudgIT Foundation survey report, maximum marketing respondents (94.2%) they said they had not received any support, while 94.3% in general reported being adversely affected by the pandemic, cash, sales, income, salaries and salaries..
The report states: “A large number of respondents were traders operating in the agricultural sector (21.8%), fashion (14.3%), (12.3%) industry (6.6% t).44.7% of respondents were young people of the other ages of 18 and 35.»
The government’s recent economic recovery plan, CBN and the new National Economic Sustainability Plan, NESP, aim to channel resources to the MSMES sector, young marketers under the YIF Youth Investment Fund, for 75 billion naras.
Financial impact
Continuing, the survey reports said: “About 74% of corporations reported that their flow of money was particularly affected.Only thirteen, according to the percentage of respondents, said they had enough money for one to three months; 33% had enough money for one to four months.”weeks and 27% from one to seven days.
“Many of these marketers said they would take credit for savings and reserves (53.7%), others were looking for loans (13.8%) or turned to the circle of family and friends (9.7%).”The inability of maximum corporations (76.4%)%) to be offering their products or virtually could have contributed to a worsening liquidity shortage.
“Approximately 80% of companies reported that Array is most likely fired, bringing an extended era of pandemic (24.4%), inability to pay (22.6%), poor sales (18.2%) limited movements (17.1%) as main reasons for their resolve to fire Array 82.8% of companies indicated that they would likely lay off one to five employees».
Support areas
All respondents are interested in the means of government intervention in many ways.
According to the survey report, “most companies reported that they need money sales (72.1%) (67,7%) and would like the government to offer investments (89.4%) market access (33.8%)).
“Similarly, 74% of companies will like the personal sector/business organizations to provide financing and business (62.9%).”
Stakeholders react
Meanwhile, the personal sector teams who spoke with Financial Vanguard in the context of the COVID-19 research report and the effects of the industry expressed their fear that the government is still not doing enough to stop the decline in corporate wealth and help the economy more quickly.
NASME President Agboade agreed with the findings of the investigation and noted that the figure on the effect of COVID-19 on mipymes was correct.
In statements to Financial Vanguard about this, he said: “It deserves to even be above 94.3% now.Many MSMEs are forgotten because they can’t even stay in the facility where they operate.”
“According to the survey that showed that 30% of MME operators said they were confident that their businesses would not suffer from the pandemic and 22.8% said they were unsure, meaning that in total, about 53% of them would possibly not suffer from the pandemic.. The effect is considerable.” Agboade also stated that the report of 94.2% of respondents who did not receive help from the government to mitigate the effect of the pandemic is true.
He said: “NASME has members in 33 federation states, adding the CTF.Approximately 400 of our members requested, however, 16 won an offer, some as low as 50,000 nars and 100,000 nars, out of the maximum amount of 20 million naRs consistent with MSMEs.
“When I asked NIRSAL Microfinance Bank’s CEO (the disbursement channel of the COVID-19 N50 billion HSH government fund) at a forum, how many others won the fund, he said there were about 95,000 beneficiaries across the country.to an average of less than N 530,000 according to the beneficiary.»
In March 2020, CBN brought as a palliative a targeted line of credit of 50 billion naras for families and SMEs, which analysts are not enough to help more than 41 million mipymes in the country.
Commenting also on the research report, LCCI Director General Yusuf said: “We will have to take into account the fact that we have more than 40 million mipymes in the country.It is almost to achieve a significant percentage of this figure.”Hence the materiality of this intervention.” Perhaps the government wants to do much more to deepen interventions so that they have some greater impact.”
Oportunidades
Despite the miserable knowledge of the survey, many marketers surveyed had to identify opportunities despite the negative effects of the pandemic, such as the creation of new products/services (49.7%), expansion/diversification (42.3%), innovation/disruption (39.3%).%) Associations (34.8%).
recomendation
Against the ray of optimism described in the survey, the Fate Foundation and BudgIT made recommendations to the government and key stakeholders in the business ecosystem that expand business aid policies and systems and enable the resilience of Nigerian entrepreneurs.
They said: “Governments at the federal and state level will want to create more budget for COVID-19 MSMEs, including: implementing grant systems in partnership with the personal sector and progression partners targeting vulnerable segments of MSMEs and; Low funding interest to key sectors and industries particularly affected by the crisis and the resulting lockdown.
“Providing non-financial services by deferring tax payments, delaying the collection of licenses and license fees, and implementing tax extensions for business-related taxes.
“Since MSMEs provide up to 70% of employment, organizing a payroll incentive specifically targeting MSMEs that have complied with the non-public source of income tax refund would be a welcome incentive for companies to review to retain their workers and keep them on the payroll.
In addition to considerations on the adequacy of the COVID-19 intervention budget for MSMEs, facilitating access to investment systems should be a key criterion for success.For example, a main criterion for applying to the TCF fund is the “BVN number, “what can be a barrier for unensured micro-enterprises that do not have a bank account and a BVN number.
“The funds want to be designed to take into account the dynamics of other types of MSMEs, namely those of microsegment operating in the informal sector; they would possibly not speak English as their first language, they would have a virtual culture and limited Internet functions.access the budget online and; ignore the other political agendas and opportunities for them at this time.»
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