A recent survey by PricewaterhouseCoopers (PwC) highlights the significant challenges faced by micro, small, and medium enterprises (MSMEs) in Nigeria. The report, titled “Building Resilience: Strategies for MSME Success in a Changing Landscape,” reveals that high energy costs, interest rates, and excessive taxes are major obstacles for MSMEs.
The survey, which included 567 MSMEs across 13 sectors and 29 states, found that over 50% of respondents reported declining sales due to high prices and low consumer spending power. The main reasons cited for this decline were high product costs, low consumer purchasing power, and consumers switching to alternative products.
The report notes that these challenges are exacerbated by macroeconomic headwinds such as inflationary pressures, currency depreciation, and slow economic growth. Inflation, in particular, is expected to remain a significant challenge for MSMEs, with headline inflation projected to decline marginally to 21% in 2024.
Other key challenges facing MSMEs include funding gaps, power outages, and over-taxation. The report highlights that inadequate access to finance, poor electricity, and multiple taxes and levies are major hindrances to growth. Additionally, infrastructure challenges, particularly electricity, account for significant costs to MSMEs’ daily operations.
To address these challenges, PwC recommends that MSMEs embrace digital transformation, expand their market reach through digital marketing, and adopt strategic pricing and value proposition adjustments. The report also emphasizes the importance of advocating for supportive policies, enhancing financial management, investing in skills development, and fostering community engagement.
Overall, the survey highlights the need for MSMEs to build resilience in the face of significant challenges and for policymakers to create an enabling environment that supports the growth and development of this critical sector.
