HOW THE NIGERIAN GOVERNMENT IS CUSHIONING THE EFFECTS OF COVID-19 ON MSMES
The negative impact of the coronavirus pandemic, particularly on Micro, Small and Medium Enterprises has been overwhelming. According to research, over 90% of business owners agreed that they were adversely affected. Their cash flow, sales, revenue and salaries/wages took the biggest hit.
While a number of medium and small scale business owners are struggling to keep their heads above water, the resultant effect for the others is devastating. With fast depleted fund reserves, most businesses are forced to close. Employees are laid off, and business owners, disgruntled. Over 82.8 percent of businesses are likely to lay off one to five employees.
MSMEs play a pivotal role in Nigeria’s economic development. They are responsible for over 84 percent of job creation in the country. Therefore, a continuous decline in their sales and profit may trigger a major unemployment crisis in the country.
In order to mitigate such occurrence, the Federal Government introduced the MSME Survival Fund. It is a N75 billion conditional grant to support micro and small enterprises and safeguard jobs in the MSMEs sector. Launched in September, 2020, the Fund is a part of ₦2.3 Trillion stimulus package, known as the Nigerian Economic Sustainability Plan (NESP).
The MSME Survival Fund Scheme has the following categories:
- Payroll Support: assist vulnerable MSMEs in meeting payroll obligations of between ₦30,000 – ₦50,000 per employee over 3 months.
- Artisans/Transport Workers Support: provide artisans and transport business operators with ₦30,000.
- Guaranteed Off-take Scheme: Bulk purchase of products from MSMEs to protect jobs and livelihood.
- General Grant: Support the survival of 100,000 MSMEs most affected by the COVID-19 pandemic.
- Formalization Support: Provide free CAC Business Name registration for 250,000 new businesses.
The program actively promotes gender inclusion – with 45% of the fund going to women-owned businesses.
Since the start of the program till date, the MSME Survival Fund has achieved the following results:
- Provided Payroll Support of between ₦30,000 – ₦50,000 for 3 months to 320,678 employees from 64,395 companies across 36 states and the FCT.
- Given one-time grant of ₦30,000 to 96,157 artisans and transport workers in 36 states and the FCT.
- Provided free business registration with CAC for 140,531 businesses across the country.
Several beneficiaries across the country are thankful to the government for providing this timely intervention.