Economy and Business

Small businesses in Nigeria struggle to survive as inflation skyrockets

COVID-19 pandemic disruptions have forced millions of small and medium-sized business owners in Nigeria – and throughout the world – to persevere and adapt.

Before the coronavirus outbreak, Esther George, a Lagos yam seller who also sells other basic foods, earned between 10,000 and 15,000 naira ($24.40) per month. But she’s been getting further into debt this year, with monthly deficits ranging from 30,000 to 40,000 naira ($73.40).

In September, Nigerian inflation reached 16.3 per cent. Food, fuel, and other raw material price rises force small firms to reduce production, go into debt, or pass on cost increases to customers.

While global food prices skyrocket, local issues in Nigeria also contribute to economic downturn.

“Noneconomic factors like insecurity have affected the economy and contributed to the inflation, because for example, farmers cannot go to farms because they are scared,’’ said Sheriffdeen Tella, a professor of economics at Olabisi Onabanjo University.

“The economic factors include the exchange rate. First, the Central Bank devalued the currency, which caused a high inflation rate. And most products are exchange rate-dependent because they are import-dependent,’’ he said.

This makes it difficult for 96 percent of Nigerian businesses and 84 percent of employment, which are small and medium-sized.

While George wishes for a better future for her and other small business owners, she must accept the present situation and hold on as long as she can.
“I did not stop the business because where is the alternative?” she said.

“There is nothing I can do.”

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