Small business owners have expressed concerns over the growing macroeconomic downturn, spiraling inflation, high cost of materials and energy prices.
According to them, all these are impacting on their operations and costing losses and closure of businesses.
President, Association of Micro Entrepreneurs of Nigeria (AMEN),Prince Saviour Iche said these are not best of times with small scale manufacturers confronting high cost of materials which some are imported. He expressed concern about high costs of operations, instigating them to cut down on jobs.
According to him, small business owners are swelling out on fuel price inflation, which has been on the rise of late.
He noted that business owners now contend with energy rationing causing industrial disruptions and limitation in the use of materials inputs.
As inflation continues to drive up costs,he said they have been forced to pass on some of their cost increases to consumers.
For President, Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, it was no secret that inflation is wreaking havoc on small businesses. But the unfortunate thing to him was that, some are being forced to close due to the tough economic environment.
Egbesola noted small businesses have faced several obstacles in order to stay in business. He added that the macroeconomic downturn has not shown any signs of improvement, warning that the group may be forced to the street to protest increasingly hostile business environment that is having debilitating impact on their operations and profitability.
He expressed worries about critical infrastructure failure, ongoing inflationary pressures and rising costs of industrial inputs.
He said it’s tough to predict what the future holds with rising borrowing rates across the economy.
The average pump price for fuel is now N196 while consumers are already paying well over that in several areas in the country.
For Egbesola, it was a painful reality for many across the country that rising fuel prices is a key part of the record inflation Nigerian businesses are all feeling.
He noted that the economy was in terrible shape and and local business owners were feeling the strain. He said the prices were taking a major bite out of the bottom line. Many businesses, according to him,will have no choice but to pass costs onto consumers who are already feeling the pain of inflation.
Already, food prices are up almost 200 per cent the highest levels in history. Electricity, gas, and rent all reaching record highs with seemingly no end in sight.
Egbesola concern is that smaller businesses have less leverage to negotiate a lower cost for goods, compared to larger retailers and chains.
He explained that small and light manufacturing have flat lined barely indicating growth, adding that the sector was not expanding with large-scale layoffs indicating that companies were not confident of near-term demands.
Generally, the sector has reported a decrease in production, and paying an increased price for raw materials. On a negative note, the industry has not reported employment growth.