The Nigerian Small and Medium Enterprises (SMEs) sector is facing a severe crisis, with widespread factory closures alarming industry leaders. Uba Obasi, chairman of the Manufacturers Association of Nigeria (MAN) for the Imo/Abia branch, has sounded the alarm, warning that without urgent intervention, the sector could face complete collapse.
Obasi attributes the dire circumstances to the Federal Government’s inaction, characterizing the current business climate as detrimental to growth. He pointed out that the challenging economic environment is forcing many SMEs to shut down operations, and even larger multinational companies are exiting Nigeria due to declining consumer purchasing power.
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“The situation is dire; the SMEs sector is crumbling, with businesses shutting their doors daily,” he lamented. Obasi highlighted the staggering inflation rate, noting that the cost of importing raw materials is exacerbated by a soaring exchange rate, which has exceeded N1,700 per dollar. He warned that if the rate continues to climb, reaching N2,000, the consequences for SMEs will be catastrophic.
The lack of access to affordable funding is another critical issue hindering SME growth. Obasi urged the government to simplify access to financing, suggesting that the Bank of Industry should disburse funds with fewer conditions and that the government should back these loans. “If SMEs had better access to funding, they wouldn’t need to rely on loans,” he concluded, stressing the urgent need for supportive measures to revitalize this vital sector.
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