The prolonged scarcity of the Nigerian currency, the naira, has led to the closure of approximately 25 million Micro, Small, and Medium Enterprises (MSMEs) in the country, according to the Association of Small Business Owners of Nigeria (ASBON). ASBON’s national president, Dr. Femi Egbesola, revealed that the unbanked MSMEs were hit the hardest and that their numbers fell drastically due to the shortage of the naira, plummeting the country’s ease of doing business ranking.
Dr. Egbesola identified financial literacy as the key to closing Nigeria’s financial exclusion gap in the informal sector, which includes unbanked SMEs. He further stated that the failure of many SMEs to adopt financial literacy and digital banking platforms caused them to run out of ideas and become redundant, leading to a significant loss of labor. During the peak of the cashless monetary policy introduced by the Central Bank of Nigeria (CBN), about 60% of the 40 million MSMEs were forced into redundancy and labor loss, and roughly 25 million MSMEs were compelled to shut down altogether.
Dr. Egbesola lamented that the government’s policies were killing businesses and damaging the economy, causing Nigeria’s ease of doing business ranking to plummet to an all-time low. He urged the government to appoint qualified personnel to manage the affairs of the MSMEs ecospace, which he believes are drivers of growth in the economy.
To improve recovery, the ASBON president recommended restructuring business models to capture and incorporate all businesses into the financial literacy ecospace. He emphasized that financial literacy was critical to closing Nigeria’s financial exclusion gap and urged Business Management Organizations (BMOs) and corporate organizations to educate SMEs on the importance of digital banking and online transactions. He called for the organization of seminars and symposia to train SMEs formally on the benefits of digital banking.
In conclusion, Dr. Egbesola urged the government to collaborate with MSME stakeholders to implement policies that promote the ease of doing business in the country. He emphasized that the SMEs are the engine of growth and must receive adequate attention to their plight. The ASBON president suggested that the SMEs’ evolution from traditional cash systems to digital banking and online transactions would help manage their bills and transactions and put them on the fast track to growth.
Keywords: Naira scarcity, MSMEs, shutdown, financial literacy, ease of doing business, digital banking, unbanked SMEs, business models, labor loss, redundancy.