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Nigeria’s Small Businesses Have Been Hit Hard

The survival rate for Small and Medium Enterprises in Nigeria has taken a massive hit this year amid a general slump in economic activity. A sharp drop in global crude oil prices, on the back of the coronavirus outbreak, slammed the country’s oil-dependent economy. The pandemic, which took a full course in the first two quarters of the year, has largely contributed to suffocating businesses small and large. But while bigger players have the financial muscle to navigate through the tides, the mortality rate for SMEs has only increased. As of 2017, only about 20 percent of SMEs manage to survive in Nigeria according to a United Nations report. That is largely due to unfavorable economic conditions and high cost of doing business, which has only been made worse by the coronavirus crisis. With government finances stretched, President Muhammadu Buhari in September approved the removal of subsidies on electricity and petrol just after interstate movement restrictions meant to curb the pandemic were lifted. For a country where the average resident relies on petrol to power their alternative means of electrical supply (generator), SMEs were hit hard as running costs skyrocketed. But as businesses tried to recoup from the pandemic, oil price crash, and the government’s subsidy removal, Nigerian youths in early October began nationwide protests tagged #EndSARS.