Lockdown: SMEs will be worst hit, experts warn

Economic and financial experts have warned that with about 41 million small and medium enterprises operating in Nigeria, this class of businesses may be the worst hit by the time the lockdown occasioned by COVID-19 pandemic ends.

President Muhammadu Buhari ordered a total lockdown of FCT, Lagos and Ogun States on March 31 and renewed it for another two weeks on April 14 to contain the pandemic.

Speaking with Nigerian Tribune, a financial expert and former presidential candidate, Mr Tope Fasua warned that with a population of over 200 million with about 20 million could have lost their jobs in the small and medium enterprises in the informal sector.

Also, a professor of capital market, Uche Uwaleke, said millions of Nigerians would certainly have lost their jobs within the period.

Fasua, who is founder and CEO of Global Analytics Consulting Limited said “Already, millions of Nigerians have lost their jobs. But here, we don’t take account of who has lost jobs or not because they don’t file forms on unemployment benefits as against what happens elsewhere.

“You know that in the United States, about 16 million people have filed for unemployment benefits. 16 million jobs lost.

“If in Nigeria, we are 200 million and we have at least 120 million in the workspace, you can imagine that anything close to 20 million people could have lost their jobs.

“Also, Nigeria is run on a SME model and there are 41 million SMEs in Nigeria and that means that the SMEs are worst hit because a lot of the time, they are the type that try to do daily business and just get by.”

Uwaleke who commended Buhari for extending the lockdown to contain the spread of the deadly virus also agreed that “no doubt, thousands of firms especially SMEs will suffer great financial loss and may end up laying off staff.”

He advised small companies to take advantage of the concessional loans and other palliatives which the Central Bank has rolled out to mitigate the negative impact of the lockdown on businesses.

Uwaleke who is a lecturer at Nasarawa State University and immediate past commissioner for finance in Imo State also appealed to CBN to take a second look at the eligibility criteria for its intervention funds to enable easier access by small businesses.

“I also think the CBN can speed up access to these facilities by appointing more participating institutions instead of using only the NIRSAL Microfinance Bank with respect to its N50 billion intervention scheme.”

Fasua who also commended expanding the list of those on conditional cash transfer to 4.6 million however, said the N5,000 paid to each beneficiary was paltry.

“N5000 will just be enough for a few days of survival and it cannot replace broken businesses, collapsed businesses and what have you.

“Nigerian government should be able to do more than that. I think that’s a very dismal provision for the Nigerian people.”

NIGERIAN TRIBUNE

 

 

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