Support for small and medium businesses needs to be a key plank of the Nigerian government’s policy for carrying the country through recessionary times.
That’s according to Magnus Nmonwu, regional director for Sage in West Africa, who said small Businesses in Nigeria face challenging times, with the country entering a recession and the upcoming Communication Service Tax Bill also likely affect Nigerian businesses.
However, he said Nigerian businesses and entrepreneurs are creative and resilient, and might play an instrumental role in lifting the economy out of recession if they are provided with the right support and business environment.
“Nigerian entrepreneurs and business owners are the engines that drive the country’s economy,” said Nmonwu.
“During recessions, big companies are able to adjust by downsizing and cutting costs. Small businesses, however, keep going and carry the losses. They need our support, as they can contribute to turning the economy around, far more quickly.”
He said it is important for government and other stakeholders to listen to entrepreneurs’ concerns as they seek to grow and contribute to the economy.
“We have embraced the responsibility of helping to amplify the voice of small business, because we also started small and understand the challenges entrepreneurs of small face in such times,” Nmonwu said.
With the recession biting, consumers will not have as much money to spend, while investors and business partners will taper down investment. Nigeria has an estimated 37 million micro, small, and medium-size enterprises making a significant contribution to GDP and employment, which means the government needs to treat the sector as an economic priority.
Another concern on the horizon, meanwhile, is the looming Communication Service Tax Bill 2015, which is currently with the National Assembly. If passed, the law will require consumers of voice, data, SMS, MMS and pay-TV services to pay a nine per cent tax on their tariffs for using these services.
“Nigerian entrepreneurs depend on their mobile phones and the Internet to run their businesses,” said Nmonwu. “The tax could potentially raise the cost of doing business and hold back Nigeria’s integration into the global digital economy by excluding people from broadband access.”
Though he said it is understandable that the government needs to raise new tax revenues in the wake of falling commodity prices, Nmonwu said this should ideally be done in a way that nurtures the growth of the small and medium Business, technology and services sectors – especially at a time when Nigeria needs to diversify its economy beyond oil
“Entrepreneurs make life-sacrifices. They are dreamers and innovators. They take risks to pursue their passions and, on this, Nigeria’s prosperity can or should be built and developed. They deserve a bigger voice and we will always work hard to champion this noble cause,” he said.
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