A recent survey shows that difficult economic conditions, a lack of access to financing, and bad business practices have hampered the growth and transition of micro-businesses and caused almost 80% of Small and Medium Enterprises to fail before their fifth year.
The report, “Perception Study: Efficiency and Impact of Regulatory Activities of Standard Organisation of Nigeria on SMEs” claims that a number of factors currently affect Nigeria’s economic climate, making it risky and unfavorable for foreign investors.
In spite of economic expansion and the potential for economic prospects, it said, there are challenges in the Nigerian business climate that limit the ability of companies to survive.
It also named various taxes as a significant impediment that has hurt a lot of the nation’s enterprises.
According to the report, “The Manufacturers Association of Nigeria has spoken out loudly that the business climate in Nigeria is currently being oppressed by a number of taxes that could lead to bankruptcy of businesses. According to a recent assessment by MAN, only 39 of the 119 taxes and levies approved under the Taxes and Levies (Approved List of Collection) Act 1998 were really being collected by the three states’ various levels of government.
According to the Small and Medium Scale Enterprises Development Agency of Nigeria in Nigeria, “80% 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.”
Additional challenges were noted in the report, including the high cost of accessing necessary technology, a lack of facilities for research and development, the fall in demand for locally produced items, and the rise in demand for imported goods.
The report listed “weak organizational framework, product/service marketing, low information technology utilization, people management issues, insufficient accounting records, among others, as some significant challenges facing SMEs in Nigeria.”
