If the recent revelation by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) that over two million small and medium-scale enterprises collapsed between 2019 and 2021 across 36 states of the federation and the Federal Capital Territory (FCT) do not jolt the Nigerian government into action, it is doubtful that even dynamite can. As explained by the agency during its 2017 SMEs’ census in collaboration with the National Bureau of Statistics (NBS), it recorded 41 million small businesses, but the number reduced drastically to 39 million when another census was carried out in 2021, because of the COVID-19 pandemic. If over two million SMEs collapsed and ceased operations across the states of the country between 2019 and 2021, that simply gives the lie to the pretensions of the government that all has been well with the Nigerian economy.

Naturally, with widespread insecurity, inflation, high interest rates, inaccessible loans and general lack of a conducive economic environment for productive engagement, businesses cannot but collapse, throwing millions of Nigerians into the unemployment market and creating dislocations in what is supposed to be the social order. Besides, as we have noted time and again, the power infrastructure in the country is poor, and that is a major disincentive to business. Artisans and small business owners, just like the big businesses, need a reasonable degree of power supply to be able to do business and stay afloat, but that facility is not there. What that means is that whatever they claim to be doing is essentially doomed.

With electricity supply being marked essentially by its epileptic provision, if not total absence in real times, it is difficult to envisage how SMEs or any other productive engagement could survive and thrive in the country. It is therefore not a surprise that, in addition to the extant collapse of SMEs, the country has been experiencing a growing high rate of unemployment and increasing poverty. The government has to urgently address the reality of the unproductive nature of the economy and its environment if the country is not to witness total collapse of its economy soon.

The government cannot claim to be making efforts to bring the economy back on track following the disruptions occasioned by the COVID-19 pandemic and the volatility in the global oil market when small businesses that are supposed to be a major backbone of the economy are in the doldrums. It should appreciate the criticality of the sector to the growth and revival of the economy and job creation. In any case, if you want to combat crime and other social vices, you have to get the youth engaged, and where best to get them engaged than in start-ups, particularly when the so-called white collar jobs are not forthcoming? For Nigeria, and not just the economy, to survive, SMEs must survive. They must thrive, they must be viable. SMEs are more or less the bedrock of the so-called Asian tigers, including China. The mainstay of any working and productive economy are SMEs and any economy where SMEs are ceasing production and collapsing will not only experience lower production and productive capacity, but will be assailed with growing unemployment and associated difficulties. Why? SMEs are the major employers of labour in a productive economy.

The reported collapse of SMEs signposts the deep level of distress facing the economy. It requires urgent and critical attention of the government. The government could give tax rebates as a way of encouraging more people to go into SMEs. It should also address insecurity. If outlaws kidnap, rob and rape Nigerians at will and without official recompense, then it is a no-brainer that businesses, especially small-scale businesses, will continue to collapse, shrinking the business space and the government’s tax base. We urge the government to take action before it is too late. In this regard, we remind it once again of the suggestions by the Manufacturing Association of Nigeria (MAN) for the revamping of the economy. A revived economy will have SMEs thriving.

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