Death of Small Nigerian Businesses

by Kelly Umukoro
small business

Recently some traders in a certain part of Nigeria marched through the streets, seeking the attention of the governor of their state. When they eventually got to the seat of government of that state, they sought to register their complaints regarding the killer taxes and levies which they allege that the government imposes on them. Although the governor of that particular state promised to intervene on the matter but, the traders were still in throes of the issues for which they marched the streets. In most parts of Nigeria, this is the trend.
If any nation wants to be great, it must not take issues concerning petty traders or Small Business for granted. Small and medium scale businesses are the drivers of any economy and a significant contributor to the strength of local economies. Small businesses present new employment opportunities and serve as the building blocks of any nation

It is difficult to understand why governments in Nigeria seem to jump at the option of imposing heavy taxes and levies on small business. I know as a matter of fact that a country like the United States is counting her blessings because of the support and relationship which it has built with small and medium scale businesses. It may interest you to know that since 1995, small businesses in America usually generate as much as 64% of the new jobs in the United States, and have been responsible for the payment of 44% of the total US private payroll, according to the Small Businesses America, SBA.

If those in authority are really committed to bringing the desired change they promise to Nigerians, they should not make the loads which the proprietors of businesses heavier than they are today with huge taxes and levies. This is because most of the funds with which these businesses were established are either personal funds or funds borrowed from micro-finance banks with outrageous interest rates. If government continues like this, small businesses in Nigeria will die.

The way out is for government to put in place policies and programmes/projects to revive small business. Taxing them to death should not be the way out. I will encourage all state governments to do a general mappings of all existing small business in their respective states to find out their areas of needs so that they can help to strengthen them. Let’s not forget that the strength of our local economy lies in the hands of small businesses. Let’s take for example the bold step which the Niger-delta Development Commission NDDC, has taken to encourage small and medium scale entrepreneurs. On October 9, 2017 the commission carried out an advert in major Nigerian newspapers concerning an entrepreneurship program on capacity building and other skills development programmes

That entrepreneurship training programme seeks to identify viable businesses in the MSME category from nine state of the region. The commission also intend to train Niger-Deltans to acquire up to date skills in different trades, and thereby create a pool of skilled workforce who are self-reliant and capable of training and employing other Niger-Deltans

The NDDC in that project is seeking to build the capacity of young persons and give them the necessary support. They also said that they want to create enabling environment for their growth and competitiveness in today’s global market. Even though the nature of the ‘support’ will be determine by the business plan that will be developed by each participating entrepreneur during the training, it needs to be emphasized here that there is need to diversify and strengthen the economies of all parts of Nigeria and make them less dependent on the Oil and gas sector revenues and jobs.

What makes this step being taken by the NDDC a giant leap for SMEs in Nigeria and the Niger Delta in particular is that the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) which was established by the SMEDAN Act of 2003 to promote the development of the MSME sector of the Nigeria Economy has not been able to deliver on is mandate. If SMEDAN had been alive to its position as the nurturer of small and medium scale enterprises, it would have been able to stand in the gap and act as buffer from taxes and levies being imposed by the various state governments in Nigeria.

What is being done by the NDDC is what the Federal and state governments should do. As soon as it is through with screening the applicants, there would be a reliable data of the pool of trained artisans and entrepreneurs which it has pooled into a database. Even though there are fears in several quarters that this NDDC effort stands a risk of being politicized, we are encouraged at the prospect that the commission will not allow political considerations, especially the who-you-know syndrome to mess up this excellent plan. Small and medium scale enterprises must be supported the way the German government of Otto Von Bismarck did in the 18th century to transform Germany to a world power. Our SMEs must not be taxed and levied to death. Government should give them tax holidays the way they give big corporations tax incentives and holidays.


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