Operators within the Micro, Small, and Medium Enterprises (MSMEs) sector express frustration amid a challenging economic climate in Nigeria, witnessing a surge in the closure of Small and Medium Enterprises (SMEs).

Various factors, including price shocks, raw material shortages, exchange rate volatility, and a lack of awareness about market management mechanisms, particularly in the foreign exchange (FX) market, have severely impacted SMEs and nano businesses nationwide. Femi Egbesola, the national president of the Association of Small Business Owners of Nigeria (ASBON), confirms the grim situation, describing it as detrimental to SMEs and nano businesses across the country. Reports from the business sector are causing concern among industry players.

Egbesola laments that many Nigerians are contemplating abandoning their businesses in search of traditional employment opportunities due to the harsh economic realities. He warns of a potential increase in commodity prices if urgent solutions are not implemented.

The ASBON president observes a shift in business models among entrepreneurs, with some revamping operations and others resorting to closures and layoffs. Startling statistics reveal that approximately 10 percent of businesses, totaling around eight million, have shuttered in the past year, primarily affecting those reliant on FX and market transactions.

Egbesola underscores the escalating inflation rate, reaching 28.92 percent, the highest in the country’s history, predicting a continued upward trajectory. The adverse consequences include heightened joblessness, business closures, increased emigration, and diminished investor confidence.

Commenting on the situation, Dr. Muda Yusuf, the director general of the Centre for the Promotion of Private Enterprise (CPPE), advocates for a revision of the exchange rate determination process. He suggests assigning the responsibility to fiscal authorities while urging the Central Bank of Nigeria (CBN) to reconsider recent rate hikes.

Manufacturers in Nigeria, represented by the Director General of the Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, implore the new CBN governor, Yemi Cardoso, to address the alarming inflationary trend. The manufacturing sector faces unprecedented challenges, including currency devaluation, limited foreign exchange access, economic struggles, persistent inflation, multiple taxation, and unreliable power supply, leading to significant business setbacks. The OPSN highlights Nigeria’s declining business ranking, emphasizing the urgent need for strategic interventions to support struggling enterprises.

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