The increasing cases of the COVID-19 do not only present an alarming health crisis to Nigeria but also come with human impact, the significant economic, business and commercial impact being felt across the nation, especially among Small and Medium Enterprises (SMEs).
These and how to reposition businesses for growth either Post-COVID or in the new normal were discussed at the recent PwC Nigeria webinar tagged ‘Repositioning your business for growth’.
At the webinar, Taiwo Oyedele, Fiscal Policy Partner, West Africa Tax Leader, explained that the pandemic may not leave anytime soon and the best way to go about it is to find ways to leave with the virus for the foreseeable future.
He said, “SME sector plays a vital role with about 40 million of them operating in all sector of the Nigerian economy, employing over 60% of the country’s workforce and providing a livelihood for the majority of homes.
“Some estimates have it that millions of MSMEs have shut production and they may not be able to open again, as they suffer from lack of liquidity, credit, income among others.”
Back story: Last June, Nairametrics had reported that an overwhelming 94.3% of businesses surveyed reported being negatively impacted by the pandemic particularly in the areas of Cashflow, Sales and Revenue.
“Financially, a good number of the businesses were doing poorly as about 13% reported having enough cash flow to stay operational for 1 – 3 months while about 33% had enough cash flow to stay operational for only 1 – 4 weeks and about 27% for only 1 – 7 days. A number of jobs were also impacted as 82.8% of the businesses reported that they were likely to lay off 1 – 5 employees,” a Fate Foundation report stated.
While almost 50% of the businesses were able to identify opportunities despite the negative impacts of the pandemic along the lines of creating new products and services, expansion and diversification etc, most businesses reported needing support with cash flow and sales and would like support in the area of funding, access to markets and business support.
Recovery opportunities for SMEs
As far as Tara Durotoye, CEO House of Tara International is concerned SMEs owners should be strategic by dissecting the issues affecting their operations into two i.e What they have control over and what they do not.
According to her, Nigeria does not have a government that supports the reality of the challenges the SMEs are going through, advising business owners not to look up to the government but rather find ways to work around issues and find the solutions.
She said, “This is the time to be closed to your customers, time to call them and find out what they want as the pandemic has created a new normal. For instance, in the makeup industry, findings revealed that customers demand products like powder and lipsticks have dropped. What customers want now is to take care of their skin and not just to cover them, we would not have known that except we engaged our customers.”
Technology has become an important part of SMEs operations and operators have to think of the current resources they have and what they can do more about the resources in terms of skill set. There are people who were in makeup that is now doing consultancy, others in Agro and now doing logistics.
She cited an event centre in Lekki corridor, who due to COVID-19 have not been engaged for social gatherings as usual. spoke with its customers using social media platforms and decided to meet their needs by turning the centre to an open market on Saturday.
“It realised that some women in the area were not comfortable going to Balogun or Mile 12 market during the pandemic and decided to create that open market for them.
“Also, there is a Game Centre that has started offering video conferencing services to its clients. It observed a gap in the video conferencing space and explore it. They created a video conference app that would not require much space like Zoom to download and that works on small phones,” Tara said.
She added that this is the time for all business owners to create a will to forge ahead and understand that they do not have a government like Canada or US that would meet their needs as expected.
However, Abubakar Kure, MD NIRSAL MFB in his presentation explained that the Federal Government introduced the TSF and other loans to cushion the effect of the pandemic on SMEs and households when it realised business owners lack the required cash flow to survive the shock arriving from the COVID-19 pandemic.
Kure agreed with Tara that SMEs have to think out of the box and not wait for the government but explained that despite the fact that the government has limited resources, it has introduced several facilities across sectors to cushion the effect of the pandemic on businesses.
Shortly after the July Monetary Policy Committee meeting, Nairametrics had reported that between April when the TSF loan was launched and July 12, 2020, the Central Bank of Nigeria has disbursed N49.19 billion out of the N50 billion Household and SME facility to over 92,000 beneficiaries.
Also, the apex bank disbursed over N152.9 billion to the manufacturing sector to finance 61 manufacturing projects and another N93.6 billion to the Healthcare sector, amongst many other sector-specific facilities.
He said, “The facilities are token but SMEs need to strategies and think out of the box as suggested, The facilities are actually subsidised because they are between 1 to 3 years at 5% for 1 year and 9% subsequently.”
He added that the facilities are actually subsidised for businesses to survive and for people to retain their jobs and for the economy to recover from the shock created by the pandemic.
In conclusion, PwC made in-depth recommendations for government, SMEs and stakeholders on policy and strategies to cushion the effects of the pandemic on the nation’s ailing economy.
Click here to watch the webinar
Payroll Support Program: FG pays 101,567 beneficiaries first-month salary
The President announced thousands of beneficiaries received their first monthly payment from our Payroll Support Program.
President Muhammadu Buhari has announced that 101,567 beneficiaries, drawn from 16,253 businesses, received their first monthly payment from the Payroll Support Program yesterday.
This information was disclosed in a tweet by the official Twitter handle of the President.
I am pleased to announce that 101,567 beneficiaries drawn from 16,253 businesses today received their first monthly payment from our Payroll Support Program. The program is a @SurvivalFund_ng Covid-relief initiative to support qualifying MSMEs with staff salaries for 3 months.
— Muhammadu Buhari (@MBuhari) November 18, 2020
The President also disclosed that the program is an initiative by the Federal Government of Nigeria to ensure that Nigerian MSMEs survive, as the Federal Government supports qualifying MSMEs with staff salaries for 3 months.
Why this matters
The stimulus package would go a long way to assist businesses in averting massive job loss or a crash of the business enterprise. The fund is expected to place affected businesses, which are beneficiaries of this fund, on the path of survival and sustainable growth.
What you should know
In July, Nairametrics reported that the Federal Government had announced plans to roll out a N2.3 trillion stimulus package and survival fund for Micro, Small and Medium Enterprises (MSMEs) to stay afloat amid the economic challenges imposed by the pandemic.
The stimulus package, which is under the National Economic Sustainability Plan (NESP), includes payroll support for three months and guaranteed off-take schemes, among others.
A month ago, Nairametrics reported that 70,000 businesses in Nigeria had been shortlisted from the 432,000 businesses that applied for the Payroll Support from the Federal Government’s Survival Fund Grant Scheme.
Development Bank of Nigeria disbursed over N150 billion in 3 years
52% of loans disbursed by Development Bank of Nigeria in 2019 were to youths and women-owned businesses.
Development Bank of Nigeria has disbursed over N150 billion since 2017 through twenty-seven (27) participating financial institutions, impacting close to 100,000 MSMEs through the process.
This is according to a disclosure by the Government of Nigeria, as seen by Nairametrics.
What you should know
A verified tweet by the Government revealed that in 2019, 52% of the loans disbursed by the Development Bank of Nigeria were to youths and women-owned businesses.
#DYK 52% of loans disbursed by @DevBankNG in 2019 were to youths and women-owned businesses. Since 2017, the Bank has disbursed more than N150 billion through 27 Participating Financial Institutions (PFIs), impacting close to 100,000 MSMEs: https://t.co/DD6bn1t8u2
— Government of Nigeria (@NigeriaGov) November 17, 2020
What they are saying
The Government of Nigeria tweeted “#DYK 52% of loans disbursed by @DevBankNG in 2019 were to youths and women-owned businesses. Since 2017, the Bank has disbursed more than N150 billion through 27 Participating Financial Institutions (PFIs), impacting close to 100,000 MSMEs.”
Why it matters
The recent disclosure is in line with the present regime’s drive to diversify the economy and expand opportunities for youths and women, bridging the social exclusion gap, and ensuring prosperity for all.
The efforts by the Development Bank of Nigeria complements other social programmes introduced by the government and targeted towards Youths and Women, such as the Special Grant to Rural Women, Nigeria Youth Investment Fund, National Young Farmers Scheme, amongst others.
FG commences disbursement of N20,000 special grant to rural women
Special grant project will see over 700,000 women empowered with N20,000 each.
The Federal Government has commenced the disbursement of the N20,000 special grant to women in rural areas of Gombe state.
This is according to a verified tweet by the Federal Ministry of Humanitarian Affairs, as seen by Nairametrics.
Recall that Nairametrics had earlier reported the flag-off of the special grant project for rural women, initiated by the Federal Government, which will see over 700,000 women empowered with N20,000 each.
What they are saying
Commenting on the latest development, the verified tweet reads thus:
“MAKE GOOD USE OF THE CASH GRANT”– Umar Faroq tells Rural Women.
“The HM @FMHDSD @Sadiya_faroq has urged rural women in Gombe state to use the one-off cash grant given to them by the federal government to improve the lives of their families.”
MAKE GOOD USE OF THE CASH GRANT- Umar Farouq tells Rural Women.
The HM @FMHDSD @Sadiya_farouq has urged rural women in Gombe state to use the one-off cash grant given to them by the federal government to improve the lives of their families. https://t.co/W2y9x3mzyE pic.twitter.com/ZdGZ3fXhOy
— Federal Ministry of Humanitarian Affairs (@FMHDSD) November 12, 2020
What you should know
The rural women’s programme was introduced in 2020 by the Federal Ministry of Humanitarian Affairs, Disaster Management and Social Development as part of President Muhammadu Buhari’s social inclusion and poverty reduction agenda.
It includes the realization of the national aspiration of lifting 100 million Nigerians out of poverty in 10 years.
The Grant for Rural Women is designed to provide a one-off grant to some of the poorest and most vulnerable women in rural Nigeria.