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 about 2.3 trillion naira to help the flow of money into the personal sector that was hit by the COVID-19 effect, however, some study reports and the organized personal sector, PAHO, the teams indicated that the various stimulus disbursements were not successful in the target companies.
The effects of Financial Vanguard show that maximum disbursements have not yet been made, a scenario that would possibly have generated anxiety among the target beneficiaries.
Some PAHO executives said that even disbursements already made were unsuccessful in a significant number of corporations they were meant to support.
As a result, PAHO is involved in the number of corporations that have already filed for bankruptcy in the first part of this year, several million more are in danger of collapsing before the end of the year.
Survey reports from the Fate Foundation, a non-governmental organization for business progress, and BudgIT, a public sector-focused company, show that about 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 safe to survive the pandemic, while 30% were convinced that their corporations would survive, for a total of approximately 52.8% at risk of extinction after COVID-19Array.
Only 47.1% of respondents were convinced they will survive.
MPME industry players deplore the forgetfulness of the sector, which they already felt were facing many demanding situations before the pandemic.
Prince Degun Agboade, president of the National Association of Small and Medium-sized Enterprises (NASME), said many smes were falling into oblivion, while Muda Yusuf, director general of the Lagos Chamber of Commerce and Industry (LCCI), said the government needed to strengthen. for industry intervention if it wants to weather the coming recession.
According to the Fate and BudgIT Foundation survey report, top marketing respondents (94.2%) they said they had not gained any support, while 94.3% overall reported being adversely affected by the pandemic, in cash, sales, income, salaries and wages. .
The report reads: “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 aged 18 and 35. »
The government’s recent economic recovery plan, the CBN and the new national economic sustainability plan, NESP, aim to channel resources into the MSMEs sector, young marketers under the YIF Youth Investment Fund, for 75 billion naira.
Financial impact
Continuing, the survey reports said: “Approximately 74% of corporations reported that their money flow 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 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%). %) offering their products or virtually would have contributed to an aggravation of the liquidity shortage.
“Approximately 80% of companies reported that they are likely to fire Array, bringing an extended era of pandemic (24.4%), inability to pay (22.6%), poor sales (18.2%) limited movements (17.1%) as the main reasons for their resolve to fire Array 82.8% of the companies indicated that they would likely dismiss one to five employees”.
Support areas
All respondents are interested in the government’s means of 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 investment (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. Area of the equatorial calms.
NASME President Agboade agreed with the research findings and noted that the figure on the effect of COVID-19 on MSMEs was correct.
Commenting to Financial Vanguard on this, he said: “It deserves even to 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 self-assured 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 probably not suffer from the pandemic. The effect of the pandemic is considerable Agboade also stated that the report that 94.2% of respondents did not receive government assistance in mitigating 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, but 16 received, some as low as 50,000 N and about 100,000 N, of the maximum amount of Naira 20 million consistent with MPME.
“When I asked the CEO of NIRSAL Microfinance Bank (the disbursement channel of the COVID-19 N50 billion HSH government fund) in a forum, how many others won the fund, he said there were about 95,000 beneficiaries across the country. This represents an average of less than 530,000 naira according to the beneficiary. »
In March 2020, the CBN brought a targeted credit line of 50 billion naira for families and SMEs as a palliative, which analysts are insufficient to help more than 41 million smyes 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 smymemes in the country. It is almost achieving a significant percentage of this number. Hence the materiality of this intervention. “The government may want to do much more to deepen interventions so that they have some greater impact.”
Opportunities
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%).
Recommendation
Against the ray of optimism described in the survey, the Fate Foundation and BudgIT made recommendations to the government and key stakeholders in the entrepreneurship 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 MPYMES, including: the implementation of grant systems in partnership with the personal sector and progression partners targeting vulnerable segments of MSMEs and; Low-interest financing for key sectors and industries particularly affected by the crisis and the resulting blockade.
“Provide non-financial services by deferring tax payments, delaying licensing and permit fees, and implementing tax extensions for business-related taxes.
“Since smes provide up to 70% of employment, organizing a payroll incentive specifically targeting smes who have met the non-public source of income tax refund would be a welcome incentive for corporations 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 will have to be a key criterion for success. For example, a primary criterion for applying to the TCF fund is the “BVN number” and this may be only a barrier for unregistered 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 online budget and; to ignore the other political agendas and the opportunities for them at this time. »
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