A survey of micro, small and medium-sized enterprises (MSMEs) by a non-profit organisation, Fate Foundation, has shown the challenges facing enterprises, DANIEL ESSIET reports.
A SURVEY by FATE Foundation, in partnership with BudgIt Nigeria, on the impact of the COVID-19 pandemic on small and medium enterprises (SMEs) has shown a severe impact on production and activities of enterprises.
The survey received 1943 responses of which 80 per cent were micro business entrepreneurs.
The results of the survey indicated that SMEs experienced a decline in business, due to stagnating economy and market demand and the disruption of supply chains due to the lockdown. While some closed their businesses, others faced difficulties, such as shortages of raw materials and disruptions in logistics.
As a result, many of them couldn’t operate at full capacity and with their complement of employees.
Respondents said movement of materials was affected. Manufacturing SMEs almost stopped operating due to reduced demand and cancellations of orders across board, with the exception of essential industries.
The concerns of most SMEs were cash flow and working capital as COVID-19 affected the value chains in which they participate.
Many of the respondents were entrepreneurs in the agricultural sector (21.8 per cent), fashion (14.3 per cent), service (12.3 per cent), manufacturing (6.6 per cent) and 44.7 per cent of the respondents were young people aged between 18 and 35.
The survey reported that 80.4 per cent of the businesses were likely to lay off staff, citing the pandemic (24.4 per cent ), inability to pay salary (22.6 per cent ), poor sales (18.2 per cent ) and restricted movement (17.1 per cent ) as top reasons influencing their decision. 82.8 per cent of the businesses indicated that they would likely lay off one to five employees.
Most businesses reported that they would need support with cashflow (72.1 per cent) and sales (67.7 per cent); and that the government should provide support in funding (89.4 per cent) and access to markets (33.8 per cent). Similarly, 74 per cent of the businesses will like the private sector/enterprise support organisations to provide funding and support (62.9 per cent).
Many of the respondents identified opportunities despite the negative impacts of the pandemic, such as creation of new products/services (49.7 per cent), expansion/diversification (42.3 per cent), Innovation/disruption (39.3 per cent) and partnerships (34.8 percent.
Source: The Nation Online Nigeria
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