Economic Shocks Forcing Small Businesses Into Bankruptcy

The Lagos Chamber of Commerce and Industry has said economic shocks have had serious effect on cash flow and liquidity of the Small and Medium Enterprises, forcing most of them into bankruptcy.

The Chairman of the LCCI SME Group, Mr. Kachikwu Jon, made the remarks at the annual symposium of the LCCI SME Group held in Lagos recently.

Speaking on the theme, ‘Repositioning MSME as non-oil export solution to plunge in petro-dollar’, Kachikwu noted that improving the SME as significant driver of growth, job creation and economic prosperity was important in the current economic dispensation.

He said, “I must not fail to say that the Nigerian SMEs have shown resilience and stamina in absorbing all kinds of economic shocks.

“These shocks continue to have serious effect on their cash flow and liquidity, forcing most of them into bankruptcy and thus contributing to high level of unemployment in the country.”

In her opening remarks, the President, LCCI, Dr. Nike Akande, said the theme of the event was apt in the light of the dwindling fortunes of most businesses as a result of the downturn in the economy.

She said, “The SMEs in Nigeria are constantly faced with a myriad of problems, which inhibit their growth. In spite of the presumed support by the Nigerian government and several development partners, there is an urgent need to reposition the SMEs’ contribution to non-oil exports in line with the diversification objective of this administration.

“With the current harsh business environment, there is a clear need for an integrated policy to support the SMEs to thrive under these conditions. It is apparent that government needs to put more focus and efforts into mitigating the investment climate’s challenges.”