April 20, 2024 5:42 am
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Shocking Report: More than 80% of Nigerian SMEs Collapse Before Their 5th Anniversary

Over 80% of Nigerian SMEs Shut Down Operations Before Their 5th Anniversary – Report

According to a recent report titled Perception Study: ‘Efficiency and Impact of Regulatory Activities of Standard Organisation of Nigeria on SMEs’, over 80% of small businesses in Nigeria have closed before their fifth year anniversary due to harsh economic policies.

The study highlights the negative operational factors currently affecting Nigeria’s economic climate, which are ultimately leading to the closure of many Small and Medium Enterprises (SMEs) after their fifth anniversary. These policies have created unfavorable and risky business climates that discourage foreign investments and investors.

The report identifies multiple taxations, the high cost of accessing relevant technologies, the absence of research and development facilities, and the preference for foreign goods over locally produced products as some of the factors contributing to this trend.

The growth and longevity of micro-businesses in Nigeria are greatly affected by these challenges.

“MAN has spoken out loudly that the Nigerian business environment is now under the oppressive weight of several taxes, which have the potential to bankrupt companies. In the survey, MAN discovered that only 39 of the 119 taxes and levies that were authorized under the taxes and levies (Approved list of collection) Act 1998 were really being levied by various levels of government across the three states.

“80 per cent of SMEs fail before their fifth anniversary due to harsh economic environments, lack of access to capital, and poor business practices, which have stunted the growth and transition of micro-businesses, according to the Small and Medium Scale Enterprises Development Agency of Nigeria (SMEDAN).”

In agreement with the report’s findings, the Manufacturing Association of Nigeria (MAN) has voiced its concerns about the business environment in Nigeria, emphasizing the burdensome nature of taxes that are capable of bankrupting companies.

The report also highlights the obstacles in Nigeria’s business environment that hinder the success of SMEs despite the government’s economic policies that aim to foster economic prospects and expansion.

READ MORE: Over Four Million MSMES Have Benefited From N150b FG Schemes – Osinbajo

The post Over 80% Of Nigerian SMEs Shut Down Operations Before Their 5th Anniversary – Report appeared first on Information Nigeria.

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