42 SMEs Shut Down Operations in Lagos

• 42 SMEs Shut Down Operations in Lagos

Challenging business environment has forced not less than 42 Small and Medium Enterprises (SMEs) to shut down operations in Lagos in the last five years.

Dr Femi Egbesola, the National President, Association of Small Business Owners of Nigeria, disclosed this on Tuesday during an interview with pressmen.

According to Egbesola, the businesses collapsed between 2014 and 2019 as they were members of the association. Meaning, there were other businesses that shut down in the state during the period under review but not included in the 42.

Breaking down the affected SMEs, he said: “About 92 per cent of the 42 businesses that closed shop were manufacturing/production companies; six per cent were into importation of commodities, while the remaining two per cent were into consulting/services business.”

The national president noted that 40 percent of the affected 42 businesses crashed in 2019 under president Muhammadu Buhari administration.

He added, “They all ran out of business due to repeated losses, which led to negative liquidity and inability to meet up with financial obligations.” This was despite Central Bank of Nigeria saying it has deployed several measures to ensure SMEs thrive in Africa’s largest economy, Nigeria.

This explained why manufacturing contribution to the Gross Domestic Product remained stagnant at 8.74 percent in the final quarter of 2019 as only established companies were able to adapt to Nigeria’s complicated business environment why new entrants face high barriers to entry amid other challenges.

“This is not too good for an economy that will soon be exposed to the vagaries of the AfCFTA that would commence effectively July 2020. It also reemphasizes the need for Government to consciously continue to address the perennial issues hindering optimum performance of real sector of the economy to guarantee improved performance and sustained growth”, MAN President, Mansur Ahmed said.