SWITZERLAND, JUNE 14 – The coronavirus pandemic and the lockdown imposed to contain the virus have crippled the cash flow, sales, revenues, and ability of micro small and medium enterprises to pay salaries and wages of workers.
In a report titled, ‘Impact of COVID-19 on Nigerian MSMEs’ About 80 percent of business owners revealed that are likely to resort to laying off their employees and slashing salaries due to the protracted lockdown period which edged down sales figures.
According to the report, 82.8 percent of the businesses said that they would likely lay off between one to five employees.
Despite these shocks, about 47 percent of businesses were optimistic that they would survive the pandemic, 30 percent were certain their businesses would not survive the pandemic and 22.8 percent were unsure of the fate of their businesses.
A good number of entrepreneurs highlighted cash flow, sales, revenues, salaries and wages as areas where they urgently needed support. At the time of preparing the report, they mentioned that they were not receiving any form of support to dampen the effects of the pandemic.
Others stated that they would like support in the area of funding, access to markets and business support.
“Given that 94.2 percent of our survey respondents stated not receiving any support at the time of completing the survey, the COVID-19 pandemic presents a major crisis for most Nigerian businesses who were already challenged by a recent recession and slowing economic growth,” the report said.
The foundation suggested that adequate support to MSMEs be made a priority as stakeholders work towards economic recovery and slowing down job loss.
The findings also revealed that 49.7 per cent of MSMEs were ready to create new products and services while about 42.3 per cent of them saw opportunities to expand or diversify their businesses.
The foundation said “Resilience is as much a tool for surviving during crises as it is for thriving and now, more than ever, programme design and intervention strategies for Nigerian MSMEs must be aimed at helping them build resilience in the immediate to long term.
“For the ecosystem, stakeholders who are able to provide financing opportunities, support packages through grants, interest-free loans and bridge financing to meet critical needs such as salaries and working capital are particularly important at this time. The funds must be easy to access, clear in their terms and prompt to disburse.”
While acknowledging that the Federal Government through the Central Bank of Nigeria has set up the N50bn Targeted Credit Facility as a stimulus package to support households and MSMEs, analysts at the foundation said the fund might not be sufficient to support the over 41 million Nigerian MSMEs.
They implored the governments at federal and state levels to establish more COVID-19 MSME funds.