Adaobi Rhema Oguejiofor
The President of the Association of Small Business Owners of Nigeria (ASBON), Dr. Femi Egbesola, has disclosed that in the aftermath of the reforms in the petroleum and foreign exchange sectors of the country’s economy, small business owners have reported significant losses and setbacks in their operations.
Egbesola made this known in an interview with journalists, where he noted that the consequent hike in the pump price of fuel has led to a sharp drop in sales, which has, in turn, resulted to decrease in liquidity.
According to him, small businesses have suffered significant losses and setbacks due to the fuel price increase as a result of subsidy removal. Many small businesses are no longer running at profit levels. Sales have dropped sharply and turnover is on the downside.
He added that this has inadvertently resulted to a drop in production and sales below capacity, as well as job losses, decrease in cash availability, and ultimately a handful of businesses have either gone down or experienced total closure.
Valuechain had earlier reported that President Bola Ahmed Tinubu, in his inaugural address on May 29, 2023, announced the removal of fuel subsidy, and currently, the Central Bank of Nigeria (CBN) is working on the unification of all segments of the Nigerian foreign exchange (forex) market.
The ASBON President noted that the resultant effect of the action is already manifesting in the increase in prices of goods, services, and commodities, adding that will remain on the upward.
In his own words, “the reality has downed on us as many of our Micro, Small, and Medium Enterprises (MSME) members have and are still complaining bitterly of low sales or no sales at all. It is unfortunate that there aren’t palliatives put in place to cushion the negative effects of subsidy removal, particularly on poor households and small businesses before its eventual implementation. This has added to the myriads of challenges beseeching MSMEs at this time’’.
Egbesola concluded that on the impact of the reforms in the forex market on small businesses, there aren’t any significant positive effects recorded at the moment by operators of small businesses.