In Nigeria, small business owners are facing unprecedented challenges. The harsh economic realities of the past year have put immense strain on entrepreneurs, from boutique owners to domestic appliance sellers.
For Mrs. Nkiru, who owns a boutique in Ago Okota, Lagos, patronage of her beautiful dresses has seen little grace in recent times; as customers’ attentions dwindle beneath the lashings of economic strife.
Once upon a time, customers flocked to her fashionable abode in satisfactory numbers to admire and ultimately buy from her dazzling collections. Now far removed is their interest as their wallets cannot meet the challenge of current prices.
“A gown of N5,000 before is now twice the amount,” Nkiru lamented.
Now the era of “buying on credit “ is what she clings to in hopes of maintaining the patronage and loyalty of her trusted customers.
This trend has inspired brow-beaten reactions from tired entrepreneurs who yearn for nothing more than a sliver of relief, as hardship continues to beat at the door of their endurance.
The boutique owner’s plight
Nkiru vividly illustrates the difficulties faced by fashion retailers. “When you compare last year to this year, things are much worse,” she explains.
Prices of clothing have surged due to the depreciating value of the Naira against the dollar, leading to a significant drop in consumer purchasing power.
“Last year, you could buy a variety of clothes for a set amount, but now that same amount only gets you a fraction of what it used to,” Nkiru says.
She recalls a recent experience where N300,000, which would have purchased around 100 gowns last year, now only buys about 30.
Nkiru’s situation is exacerbated by rising costs across the board. “The cost of living has gone up, so people prioritize food and basic necessities over fashion. The result is that customers buy less and ask for credit more often,” she laments.
She reports that her weekly sales have dropped considerably. “Where I used to have customers buying several items in one visit, now they often only purchase one or ask to pay later,” Nkiru says.
This shift has led to delayed payments, with customers taking weeks or even months to settle their debts.
The cost of goods has also risen sharply. A gown that once cost N5,000 now goes for N15,000, leaving little room for profit. “Everyone is struggling to make ends meet,” she says, noting that even landlords are raising rents, forcing some small businesses to close.
Domestic Appliance Retailer’s Woes
Mrs. Mariam, who sells kitchen utensils and home appliances, is equally disheartened. “It has been tough,” she admits. Sales have dwindled as people focus on basic needs rather than discretionary purchases.
“The prices of appliances have tripled,” Mariam explains. “A mop that was N900 last year now costs N1,800. A set of pots that was N16,500 is now N12,000 for just one piece.” Such price hikes have made customers hesitant to buy new items, preferring to make do with what they have.
Mariam also notes a dramatic drop in patronage. “Last year, we could make between N20,000 and N30,000 a day. Now, some days we make nothing at all,” she says.
The contrast is stark: where a customer might have spent N40,000 in one visit, now they only spend a fraction of that amount.
The increased cost of living affects her business’s profitability. “Even if you make a sale, you might end up using the money just to cover daily expenses,” she laments. “The situation is dire, and saving is almost impossible.”
Provision Store Owner’s Struggles
Mrs. Okoye, who runs a provision store, echoes similar sentiments. She describes how the cost of staples has soared.
“Last year, a small pack of noodles was N5000. Now it’s N7,677,” she says. The rise in prices has squeezed profit margins and made it difficult for businesses to thrive.
Rent is another significant burden. “My rent has increased from N180,000 to N240,000 over the past two years,” Okoye says.
To cope, she has diversified her offerings, including selling alcoholic beverages to attract more customers.
Despite these efforts, the challenges persist. “The small gain you make from selling products isn’t enough to cover costs and generate profit,” she explains.
Hairdresser’s Decline
Lady P, a hairdresser, notes a dramatic change in customer flow. “Weekends used to be our busiest times, but now we see fewer customers,” she observes. The reduction in clientele has forced her to close on Saturdays, a day that was previously a steady source of income.
“Last year, we bought a bag of honey beans for N70,000. Now it’s N147,000,” she reports. Prices for other staples have similarly increased. “Rice prices fluctuate, but you’re still paying more. A carton of spaghetti, which was about N18,500, now costs N18,800.”
Lady P also mentions that some goods, like beans, have become so expensive that customers are buying less. “People aren’t buying beans as much as they used to,” she says, noting that some products have been sitting unsold for weeks.
Laundry Service Challenges
B-Smart Laundry Service is also feeling the pinch.
“We used to get about 10 customers a day, but now it’s down to five,” the owner explains. The cost of materials like Lylon and soaps has increased, leading to higher prices for customers.
“People are choosing to wash their clothes at home because they can’t afford our services,” she says. The cost of cleaning a suit, which was N700, has now risen to N1,500. Such price increases are driving customers away, affecting the business’s bottom line.
The Bigger Picture
The experiences of these small business owners paint a grim picture of Nigeria’s current economic landscape. The percentage difference in prices from last year to this year reveals a stark reality:
- Clothing: N5,000 last year to N15,000 this year – a 200% increase.
- Mops: N900 last year to N1,800 this year – a 100% increase.
- Pot: N16,500 for a set (which is four in one) last year to N12,000 for just one piece this year.
- Noodles: N5,000 last year to N7,677 this year – a 53% increase.
- Beans: N70,000 last year to N147,000 this year – a 110% increase.
- Rice: N70,000 last year to N70,000+ this year (fluctuating but not below last year’s price).
- Spaghetti: N18,500 day before to N18,800 recently – a 1.6% increase.
- Laundry (suit): N700 last year to N1,500 this year – a 114% increase.
These figures highlight the severe impact of inflation and economic instability on small businesses. Entrepreneurs are not only grappling with higher costs but also with reduced consumer spending.
As they navigate this challenging environment, the resilience of Nigeria’s small business sector is tested like never before.
The road ahead remains uncertain, but the stories of these small business owners reveal a critical need for systemic changes to alleviate the economic strain and support local enterprises.
