- SMEs in Survival Mode as Recession Bites Harder
There is no relief yet for the Small and Medium-scale Enterprises in the country as they continue to struggle to maintain profitability or remain in business, with the cost of operations rising rapidly.
Business owners are worried about the continued free fall of the naira, which dipped to as low as 516 to the United States dollar on the parallel market last week.
Foreign exchange scarcity and increasing cost of importing raw materials, with other challenges of infrastructure deficiency, have continued to increase the cost of doing business in the country.
Many small businesses are now seeking different survival strategies to enable them to remain in business.
The Chief Executive Officer of a firm dealing in printing materials, Mr. Dare Bakare, said the challenges facing the economy started with the exchange rate volatility, which affected a lot of things such as the cost of clearing goods at the ports.
Bakare, who observed that a lot of businesses had been affected by the economic recession, noted that tariffs rose beyond reasonable levels and even additional levies not part of the clearing were introduced at the ports.
With the prices of goods and services rising in the country, he said the harsh business environment was forcing entrepreneurs to draw out their plans with the expectation of improvement in the economy.
According to him, the Treasury Single Account introduced by the Federal Government made Deposit Money Banks to lose a lot of money because most of the government funds were moved to the Central Bank of Nigeria from the DMBs.
He said the development affected the liquidity of the banks and their ability to meet the needs of the SMEs seeking loans from them.
“We try to ensure that we operate on a moderate level so that our prices are not too high or too low so that we can keep the business going because we believe it will not continue this way; things will improve,” he said.
Aside from the fall in oil prices, he said the resurgence in militant attacks in the Niger Delta affected the government’s revenue from oil sales.
Bakare also said that war against corruption as well as good leadership at a time of recession would help the country to get out of the economic quagmire quickly.
“They should negotiate with the Niger Delta militants to stop the bombings. The government should also recover looted funds from those who stole and the money should be returned to the economy, and all those thieves should be arrested,” he said.
The Managing Director, Topgy Group, Mr. Tokunbo Oshinyemi, said the harsh business environment and difficulty in getting raw materials due to forex scarcity made the company to resort to alternative funding.
He said, “We do not put the whole pressure on our clients in our pricing; we still maintain our pricing based on that, our clients are able to still find us very attractive, unlike many competitors that have increased their prices. With that, we are able to maintain our clients.”
According to him, the recession has made it important for firms to manage their fixed assets.
“A lot of organisations now have to manage their fixed assets because they don’t have money to buy new ones,” Oshinyemi said.
According to him, the ability to maintain prices in order to retain customers has been a top priority for the organisation.
He said, “Not increasing our prices has reduced the profit margin significantly, but what is affecting us is affecting our customers.
“It is better to retain our customers when things are difficult than to lose them because you want to increase pricing. We want to maintain our clients despite the fact that our environment does not warrant it,” he said.
An insurance broker, Mr. Dele Kareem, said for most countries that had experienced recession, it was always an opportunity for small-scale firms to grow.
He explained that this could be achieved by taking advantage of opportunities around them.
“For instance, with agro industry, you can do backward integration and then use the opportunity to expand your business and look for export business as well,” he said.
According to him, the cost of producing energy for business is very high because businesses need drums of diesel for their generators as power supply from the national grid remain poor.
Kareem said, “That eats into your capital. Some businesses have been able to cut off some bills. Some have cut off the bills from power firms completely and now rely on generator alone.”
He also observed that insurance business had not been rosy but dull due largely to government policy.
“A lot of companies are closing down, construction industries are not operating; manufacturers are closing down, traders don’t have dollars to import, which affects maritime and aviation business,” he said
The Chief Executive Officer, Institute of Credit Administration, Prof. Chris Onalo, said the capability of indigenous investors would be greatly hampered by the nation’s weak currency.
He stressed the need for the government to ban the importation of goods being produced in Nigeria to boost local production, adding that it was relevant to diversify the economy.
The Chief Executive Officer, Riskguard Nigeria Limited, Mr. Yemi Soladoye, said it would not be possible to fully appreciate the benefits of the economic recession unless the root causes were first identified.
He said Nigeria entered into recession in 2016 due to the absence of national saving/mandatory Sovereign Wealth Account, reduction in oil price, reduction in oil output, increased spending on insurgency, monumental corruption and bloated cost of governance.
Soladoye said one of the natural consequences of recession was famine.
He said, “The Venezuela experience where people looted supermarkets and chain stores and migrated to neighbouring countries in droves would have been our portion. Meanwhile, which neighbouring countries can contain us in a situation where the population of just the poor people in Nigeria (112 million) is equal to the population of seven other West African countries combined?”
He said the current recession had brought some benefits to Nigeria such as attention to the non-oil sectors like agriculture, the SME, mining; reduction in dollar-based consumption – foreign education, medical tourism and luxury items; focus on local industries and self-employment; fighting corruption and wastage; removal of impunity with which public money was stolen; and reduction in the importance attached to oil revenue.
Soladoye said to achieve sustainable economic turnaround, “there is a need to restructure the ministries, department and agencies at federal and state levels to suit the country’s targeted economic focus.”
He also said, “Let all the development agencies, the Bank of Industry, Bank of Agriculture, Central Bank of Nigeria, Nigerian Export-Import Bank, and Nigeria Investment Promotion Commission focus on agriculture and develop a 10-year agric master plan and allocate robust budget for agriculture on yearly basis for the whole period.
According to him, Nigeria is a land of resources and opportunities, and anybody who can use their brain and is ready for legitimate work will not be in recession.
TAJBank Joins e-Commerce Giants- Launches Nigeria’s 1st Ethical Online Mall
TaJBank Launches Ethical Online Mall
Abuja Nigeria July 8th, 2020 Nigeria’s most innovative Non-Interest Bank, TAJBank, has announced the highly anticipated launch of TAJMall, the nation’s first ethical online shopping mall.
The highly anticipated launch of the e-commerce site, which held recently, is coming closely on the heels of the commencement of its Agency Banking Network which began in June across thirteen (13) states in the country.
To celebrate this milestone, the brand will be holding a week long TAJMall campaign from 6th – 11th July 2020 to sensitize and also reward its new customers to its platform.
“This is a great milestone as we present a fully customer focused e- commerce platform offering 100 percent authentic brands from highly vetted vendors. Our mission is to rebuild trust in the online shopping niche, hence the emphasis on our platform being an ethical shopping mall. We want to deliver on our promise and make this an enjoyable and safe experience not just for our customers, but also for our numerous trusted vendors as well,” said Founder/COO TAJBank, Hamid Joda.
“Our customers place absolute trust that goods will be delivered exactly as requested, and we do not take that trust lightly, he added.
The brand expressed commitment to continuously deploy technological tools on it’s new e- platform to maintain optimal customer service delivery and ensure shopping on TAJMall remains a productive and hassle free experience.
Customers who log onto the tajmall.ng platform (or download the app), will have the opportunity to enjoy massive price slashes, shopping coupons, free shipping and other incredible offers. The Bank also intends to offer financing to its customers who shop on the mall.
“Well beyond our exciting line up of activities, they are assured the highest level of value each time they make a purchase on TAJMall. Our marketing insights have shown that there is an increasing need to match the kind of variety in product offerings that customers yearn for with the exceptional shopping experience that may at times be lacking. We aim to make that an unmatched experience right from the moment our customers visit our mall to the receipt of their items,” affirmed Co-Founder/CMO, Mr Sherif Idi.
Customers shopping on TAJ Mall are guaranteed 100% authenticity, official warranties from the brands, and a 5 day return policy at no extra cost to the customer.
Warren Buffet to Give Out Another $2.9bn, Total Donations Now $37bn
Warren Buffet Gives Away $2.9bn, Total Donations Now $37bn
Oracle of Omaha, Warren Buffet, has announced his yearly charitable donations to the five philanthropies he picked to donate most of his fortune to.
The billionaire plans to give out 15.9 million class B shares of Berkshire Hathaway worth $2.9 billion to the five philanthropies. This will bring his total philanthropic donations to $37 billion since 2006.
Buffet, who has promised to give away about 99 percent of his fortune, still hold 248,734 Class A shares of Berkshire valued at around $67.5 billion.
However, before he began given out his shares, Oracle of Omaha held 474,998 Class A shares of Berkshire, which would have worth about $129 billion as of today.
UBA Appoints Ayoku Liadi, Oliver Alawuba as Deputy Managing Directors
UBA Appoints New Deputy Managing Directors for its Growing Business
United Bank for Africa Plc (UBA) announced the appointments of Ayoku Liadi and Oliver Alawuba as the Deputy Managing Directors in charge of UBA’s Nigeria and Africa businesses, respectively.
In a statement issued by the bank and released on the Exchange’s website, the bank said the creation of the new positions represents further strategic recognition of the bank’s pan-African business growth.
The lender explained that its pan-African business now accounts for over 40 percent of its Group revenue, while Nigeria remains the bank’s largest market.
According to the bank, the new Deputy Managing Directors will report directly to the Group Chief Executive Officer (CEO), Kennedy Uzoka.
Speaking on the new appointments, Tony O. Elumelu, Group Chairman, said “In 2005, we set out our pan-African vision. Fifteen years later, we are present in 20 African countries, serving over 20 million clients, leveraging our service culture and technology platform, to provide an integrated and seamless customer offering across the continent.
“In Africa, we lead in innovation and service, whilst our International Business, operating from New York, Paris and London, provides global and African clients access to treasury, trade finance and corporate banking products, uniquely tailored to the African opportunity. These senior appointments represent our commitment to optimise our management structure to best serve our clients and drive our business success.”
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