Nigeria: Experts Offer Solutions to Forex Scarcity, Declining MSMEs Sector

Finance and economic experts have advised the federal government on ways to fix forex scarcity and declining Micro, Small and Medium Enterprises (MSMEs) in the country.

MSMEs had earlier expressed dismay over poor labour capacity, sustainability of market deliverables and unprecedented surge in market disruption for the MSMEs across the subnational levels and Ministry, Department and Agencies(MDAs) in the country.

According to experts, the expectations of MSMEs job creation third quarter, 2022, was edged on low finances, Japa Syndrome, market volatility, supply chain disruptions, factory closure, poor infrastructure development, supply side risk, unavailability of forex, invasion of local taxes on informal sector, debts overhangs, amongst others.

Speaking during a media briefing recently, the national president of Association of small business owners of Nigeria (ASBON) Dr. Femi Egbesola, said the Nigerian government is battling challenges of forex that is not available, adding that, this has impacted on job creation for Small and Enterprises(SMEs) while companies have folded up and large numbers of SMEs are closing shops because of the myriads of challenges mentioned earlier.

He insisted that a lot of foreign partners are divesting while local manufacturers and operators of SMEs are traveling out of the country

Egbesola observed that high cost of doing business has eroded profit margins, noting that, political campaigns for the electioneering year has made government to abandon MSMEs just to focus on winning election and retaining power at all cost.

This, he said, has huge devastating impact on the business economy as more SMEs battles to survive the current headwinds and harsh operating terrain.

He added that government needs to increase capacity for the supposed beneficiaries of SMEs by collaborating and diversifying business interest to unlock market potential.

ASBON boss charged SMEs to explore export potentials to earn foreign exchange and improve the general outlook of the MSMEs in global markets to facilitate trade and investment.

Reacting, director, Centre for the Promotion of Private Enterprise, (CPPE), Dr. Muda Yusuf, charged government to tame inflation and reform monetary policy while pointing out that, some of the barriers to economic growth include; declining purchasing power, enduring structural limitations, lack of security, and crippling trade facilitation problems.

He also pointed out that the decline in manufacturing sector’s performance significantly affects employment, food inflation, and food security.

He said the food processing sector has the most significant impact on jobs because of the solid backwards integration content and high multiplier effect in the agriculture value chain.

CPPE boss listed recommendations to fix the GDP growth decline, which included ‘improving the macroeconomic headwinds of high inflation and currency volatility.’

He also emphasised the need to address the structural impediments to production and other economic activities and reform the foreign exchange market to inspire investors’ confidence.

The economist added that the country must begin to address the challenges of insecurity and logistics and take urgent steps to tame inflation and boost the purchasing power of the citizens.

There must be creative support for small businesses to promote economic inclusion and reform the monetary policies to facilitate financial deepening in the economy, he said.

This is even as the managing director of Stellarchem Nigeria Ltd, Ikpong Umoh, decried the daunting challenges of SMEs while stressing that, foreign exchange, energy crisis amongst others adversely impacted the critical role of Micro Small, and Medium Enterprises (MSMEs) in the nation’s economy.


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