Poor Power Supply and Multiple Taxation is Killing SMEs in Nigeria

Players in Small and Medium Scale Enterprises (SMEs) have decried Nigeria’s challenging business environment and a series of policies eroding business profitability and growth.

SMEs have accused the Federal Government of unfriendly business policies bordering on high taxation, duties, lack of constant electricity, poor road network and high-interest rates that made loans inaccessible.

The executive members of the Nigerian Association of Small and Medium Enterprises who spoke at a media parlay ahead of its25th-anniversary lecture and award night stated that SMEs in Nigeria deserve all the support they need to thrive. 

The association noted that SMEs are the largest employer of labour and an important segment of the economy.

SMEs are important factors in the development of any economy. For instance, SMEs account for 91 percent of the businesses in South Africa, 60 percent of the country’s employment and 52 percent of the total Gross Domestic Product (GDP).

Similarly in Nigeria, SMEs account for 96 percent of the businesses, 45 percent of the GDP and 84 percent of the country’s employment. 

The association’s President and Chairman of Governing Council, Dr AbdulRashid Yerima stated that despite the current challenges associated with Nigeria’s economy, SMEs is still the bedrock of the country’s Gross Domestic Product (GDP).

Dr Yerima posited that SMEs are the most important drivers of social and economic growth, wealth creation, employment and overall standard of living.

Investors King understands that Small and Medium Enterprises in Nigeria are subjected to several regulations leading to multiple taxations.

The numerous challenges which SMEs in Nigeria face include poor power supply, lack of access to funding, poor infrastructure and insecurity. 

Meanwhile, the Deputy President of the Association (South), Otunba Gbemisola Oduntan called on both the states and federal government to assist business owners, particularly farmers who had lost their source of livelihood to flooding.

Gbemisola Oduntan stated that such assistance will not only help the victim but also the country at large. 

While she lamented that government agencies tax small businesses on almost everything, she encouraged both the states and federal government to scale down the amount of tax paid by the small and medium-sized enterprises which have been hampering their growth.