The recent surge in petrol prices following the removal of subsidies and the devaluation of the naira has resulted in a notable increase in job losses across Nigeria. Coupled with rising inflationary pressures, the purchasing power of cash-strapped consumers has weakened, posing challenges to businesses grappling with higher operating costs.
As a consequence, numerous small businesses have been forced to shut down, further exacerbating the country’s unemployment situation. Reports suggest that approximately 10 per cent of the 40 million Micro, Small, and Medium Enterprises (MSMEs) in Nigeria have ceased operations since the subsidy regime removal.
In light of the challenging economic situation and the pressing need to address rising job losses and unemployment, the government of Nigeria is urged to take decisive and inclusive measures to support the MSME sector. The sector’s resilience and capacity for job creation make it a vital component in driving the country’s economic recovery and sustainable development.
Here are some measures that the government can take:
- Access to Affordable Credit: Introduce initiatives that provide easier access to credit with lower interest rates, especially for MSMEs. Improved access to finance will enable businesses to weather the economic storm and sustain their operations, thereby preserving jobs.
- Grants for Micro Enterprises: Implement targeted grant programs to support micro-enterprises, which are often more vulnerable to economic shocks. These grants can act as a lifeline, helping small businesses stay afloat during these challenging times.
- Tax Reliefs and Stability: Provide tax reliefs or holidays for entrepreneurs to alleviate the financial burden on businesses and encourage them to invest in expansion and job creation. Additionally, maintain stability in business registration costs to foster an environment conducive to business growth.
- Engage with MSME Associations: Collaborate with MSME associations, such as NASME and ASBON, to gather informed insights and develop effective interventions for small businesses. Including these associations in policy discussions will ensure the government understands the sector’s specific needs and challenges.
- Invest in Infrastructure: Improve the power supply infrastructure to reduce dependence on costly petrol and diesel generators. Increased access to reliable electricity will significantly lower production costs for businesses and enhance overall economic productivity.
- Promote Local Production: Encourage and support local production initiatives to reduce the reliance on expensive imports and promote domestic industries. This approach will foster economic growth and create new employment opportunities.
- Sustainable Economic Policies: Implement policies that prioritize economic stability and long-term growth. Predictable and sustainable economic measures will attract investors and instil confidence in businesses, leading to increased job opportunities.
The government’s swift and thoughtful actions in addressing the current economic challenges will play a crucial role in reviving the MSME sector and mitigating the impacts of rising unemployment. Collaboration between the government, private sector, and relevant stakeholders is essential to develop a comprehensive strategy that fosters economic recovery and ensures the prosperity of the nation.
