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Over 40 SMEs shut down operations in Lagos due to economic crisis

Over 42 Small and Medium-scale Enterprises (SMEs) have reportedly shut down operations in Lagos State over the last 6 years due to challenges occasioned by the harsh business environment in the center of excellence.

This was made known by the National President, Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola

Egbesola explained that the SMEs closed down their businesses between 2014 and 2019 due to the losses they battled with.

The affected businesses were registered members of ASBON, Lagos chapter.

Egbesola also revealed that the sectors were in the manufacturing sector, importation of commodities, and consulting/services.

“About 92% of the 42 businesses that shut operations were manufacturing companies; 6% were into importation of commodities, while the remaining 2% were into consulting/services business,” said Egbesola.

He also explained that the SMEs had to shutdown operations due to repeated losses. This he said led to negative liquidity and inability to meet up with financial obligations.

Ogbonge News recall that the Manufacturers Association of Nigeria (MAN) and the Lagos Chamber of Commerce and Industry (LCCI) had reacted to the report by the National Bureau of Statistics on Nigeria’s GDP rising to 2.55% in the fourth quarter of 2019.

While MAN noted that the GDP growth had failed to meet up with the surge in the population, the LCCI argued that the growth had failed to address the unemployment challenge in the country, while the economy could be best described “as weak and sluggish.”

The associations had noted that the manufacturing sector had remained stunted due to a tough operating environment, poor infrastructure and unpredictability of government policies. These issues were what many of the SMEs which shut down faced.

They recommened that government needs to create an enabling environment, ensure patronage of locally produced goods and reform processes while putting in place adequate infrastructures.



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