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22m SMEs gasp for breath over COVID-19 – Survey

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DESPITE efforts of the Federal Government to wrestle the economy from the jaws of recession, about 22 million Micro, Small and Medium enterprises (MSMEs) in Nigeria are now facing extinction due to insufficiency of the stimulus package dispensed to the private sector. Government had planned to spend about N2.3 trillion to support cash-flow in the private sector which has been battered by the impact of COVID-19, but some research reports and the organized private sector, OPS, groups have indicated that the various financial stimulus disbursements have not reached the targeted businesses.

  Most of the disbursements are yet to be made, a situation that may have created anxiety amongst targeted recipients. Some OPS leaders said that even the disbursements already made did not get to a significant number of the businesses they were meant to support.

  Consequently, OPS fears that in addition to millions of businesses that have already failed in the first half of this year, several millions more may collapse before end of year.

  The survey reports by Fate Foundation, a non-governmental, enterprise development organization, and BudgIT, a public sector-focused information house, show that about 53% of the nation’s estimated 41 million MSMEs are presently on the verge of collapse. Specifically, the reports noted that 22.8% of businesses surveyed said they were not sure they will survive the pandemic, while 30% were emphatic that their businesses will not survive, making a total of about 52.8% under threat of extinction post-COVID-19. Only 47.1% of respondents in the survey were positive that their businesses will survive. MSME sector stakeholders are lamenting neglect of the sector which, according to them, was already contending with many challenges before the pandemic.

President of National Association of Small and Medium Enterprises (NASME), Prince Degun Agboade, said many MSMEs are going into oblivion, while Mr Muda Yusuf, Director-General, Lagos Chamber of Commerce and Industry (LCCI), said government needs to ramp up intervention support for the sector if it hopes to head-off the looming recession. According to the survey report by Fate Foundation and BudgIT, most of the entrepreneurs surveyed reported that they did not receive any form of support, while a total of  reported being negatively impacted by the pandemic, particularly in the areas of cash-flow, sales, revenue, salaries and wages.

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