2020 ushered in a global pandemic which shut down the whole world for months with the world spending the first six months of the year fighting to reduce the spread and number of deaths from the CoronaVirus.
The Nigerian government instituted a lockdown as the virus began to spread while this was the right call, the hardest-hit victims in business seem to have been overlooked. Even though MSME’s make up over 80% of Nigeria’s workforce which amounts to millions of formal and informal jobs, there have been no concrete plans by the Nigerian government to alleviate the struggles MSME’s have faced due to the Coronavirus Pandemic. Majority of MSME’s found their businesses automatically grind to a halt to comply with the government directed lockdown.
Many have been closed for over 3 months with no income on record. On an online conference by the Enterprise Development Centre with entrepreneurs who had facilities, the managing director of KFA Event Hall disclosed that ‘with a staff strength of over a 100 people they had not made any income since they had to shut down their facilities for over 2 months and all congregating of any kind was banned by the government.’
Before the pandemic happened Nigeria’s MSME’S have consistently faced the biggest hurdles operating in Nigeria and trying to keep their businesses afloat. Strangled by poor infrastructure, no access to finance, corruption, poor government policies, unfair competition, multiple taxations, government bureaucracy and harassment, with only 20% of SME’s surviving according to data from the United Nations Industrial Development Organisation (UNIDO). Now businesses are faced with additional hurdles presented by the pandemic in addition to all the already listed obstacles. How does a small business survive all these challenges? Most experts say to pivot, but how does an SME pivot in an environment where growth is stifled? Most food and beverage companies that tried to pivot to online orders and deliveries got slapped with a new policy by The Nigerian Postal Service (NIPOST), a government organization that decided that small businesses who were delivering their own products to customers were now considered as couriers and had to pay an N2,000,000 registration fee in addition to a yearly registration which was then reduced to N250,000 if you had 5 bikes or less. This is in addition to the licenses and fees already paid to the state and local government.
With small businesses shut for over 3 months, how can they possibly afford this? There have been several complaints from small business owners about receiving bills from different government arms even in the middle of this pandemic, I know for a fact that LASMA sent out bills for services not carried out to businesses that were shut during the pandemic. Pivoting as easy as it sounds isn’t easy for most small businesses who don’t have any revenues or the funding to do so while they are still being harassed by various government officials who at this time should be offering every support they can but are instead adding to the burdens. The 50bn SME COVID fund administered by NIRSAL Bank has not been received by a majority of legitimate small business owners and the handful of business owners who have received the funds, only received 10% of the maximum amount of 25m promised. Calls for transparency of the administering of these funds have fallen on deaf ears even as rumours of mismanagement and embezzlement trail the COVID funds.
In the middle of the pandemic, Ada Osakwe founder of Nuli Juice started an organization called the SBNN along with other conveners to give MSME’s a voice. Out of frustration of how small businesses were being overlooked by the government, Ada became very vocal about the responsibility the government had to ensure majority of its SME’s survived the pandemic. In a call to action which inspired many SME’s to sign up, the SBNN created several campaigns such as the #NigeriaSupportYourSMEs campaign, advocating for the Federal, State and Local governments to provide fiscal stimulus package to SMEs in vulnerable sectors of the economy. An online petition garnered over 4,000 signatures and a Call-to-Action with 10 Policy Recommendations has been shared and discussed with the Vice-President, Prof. Yemi Osibanjo, the Minister of Trade and Investment, the Deputy Governor of the Central Bank and other influential policy-makers. The #WriteYourBanks campaign in early April called out commercial banks and other SME loan providers to give moratoriums on their facilities, in recognition of the fact that small businesses no longer have buoyant revenues. It encouraged SMEs owners to write to their banks and seek this forbearance, leading to banks such as GTB and FCMB, as well as the Lagos State Employment Trust Fund (LSETF) eventually offering this forbearance on loans for a period of 3 months. These are directives that should have already been dictated by the government, in most countries where a lockdown was enforced, several palliatives were put in place by the government to ensure the survival of their SME’s. Typically, in Nigeria, businesses are ignored until the government needs to generate revenue, this one-sided partnership is not sustainable. The government should be involved in the success of businesses beyond harassing them for taxies and levies. The rate of insecurity in the country has increased due to mass job loss, also businesses who don’t survive cannot pay taxes.
The general sentiment throughout the world has been about just how crappy a year 2020 has been and how everyone is ready for 2021. However, to quote a poem by Leslie Dwight “ …What if 2020 is the year we’ve been waiting for? A year so uncomfortable, so painful, so scary, so raw – that it finally forces us to grow… A year we finally accept the need for change, declare change, work for change and become the change…” Instead of cowering to our insensitive policymakers, what if this is the time to demand a change in how small businesses in Nigeria are treated. I believe this is the time to do more and ask for what should be the standard. Taxpaying businesses should receive support with the same level of energy our government goes about tax collection. 2020 should be the year we engage our government for support, to curate solutions and interventions to fight against this pandemic and beyond. It should be the year where our government listens to the challenges that real entrepreneurs have, scrap policies that are burdensome on SME’s and have open dialogues with stakeholder before passing any bills or laws that affect local business owners. We can truly build a partnership to not just grow SME’s in the country but contribute to the growth of the national GDP as well as reduce unemployment and poverty but only if we start to address the gaps between in private sector and the government now, to create an effective public-private partnership for SME development and create a business environment where they will not only survive but thrive! If this is possible, 2020 could truly be the ‘most important year of all.’
Toyin Bashir is one of twelve (12) partners in the law firm of Banwo & Ighodalo. She has advised several local and international companies on matters pertaining to the legal and regulatory framework for doing business in Nigeria. Her core areas of legal practice include Corporate and Commercial Law, Company Secretarial and Regulatory Compliance.