The Association of Small Business Owners of Nigeria (ASBON) has warned that Nigeria's business environment requires urgent reforms following the exit of Uber and several multinational companies. ASBON's national president, Dr. Femi Egbesola, made this statement on the country's 66th Independence anniversary. He emphasized that the growing number of businesses leaving Nigeria reflects the challenges faced by companies operating in the country. Egbesola urged the Federal Government to improve the ease of doing business and create conditions for both local and foreign businesses to thrive.
Egbesola argued that the exit of companies like Uber should not be viewed in isolation but as evidence of the need for urgent reforms. He described Nigeria's business environment as "harsh" over the years, citing recent data showing a decline in the number of businesses operating in the country. According to Egbesola, this decline is evidence that the environment is not supportive of enterprise. He pointed out that many large corporations have left Nigeria due to unfavorable business conditions, with Uber being the latest example.
Egbesola emphasized that the government's primary responsibility is to create an enabling environment for businesses rather than engaging in commercial activities. He urged the government to improve the ease of doing business, formulate supportive policies, and allow private businesses to create jobs. Egbesola identified access to affordable finance as a significant obstacle for both small and medium-sized enterprises (SMEs) and larger businesses. He noted that high interest rates, ranging from 32 to 40 percent, coupled with stringent collateral requirements, make borrowing difficult.
The ASBON president highlighted that high interest rates and collateral requirements hinder businesses' ability to invest, expand, and compete. He emphasized that supporting SMEs and multinationals is crucial for economic growth. Egbesola also pointed out that foreign exchange difficulties affect the competitiveness of Nigerian businesses, particularly manufacturers relying on imported raw materials and equipment. He questioned how local businesses could compete with international companies when they cannot access foreign exchange at competitive rates.
Egbesola further explained that accessing foreign exchange from commercial banks is challenging, and the black market rates are too high. This makes it difficult for businesses to manufacture and sell products competitively. He stressed that Nigerian businesses cannot compete with international companies that access foreign exchange at lower rates. Egbesola called for stronger government intervention in infrastructure, particularly electricity and roads, to reduce the cost of operating businesses.
The ASBON president emphasized that improved infrastructure would help reduce the cost of doing business in Nigeria. He urged the government to take concrete steps to address the challenges faced by businesses. Egbesola's comments come amid growing concerns about the impact of multinational companies' exits on Nigeria's economy. The country's business environment has been criticized for being unfavorable, with many companies citing difficulties in accessing finance, foreign exchange, and infrastructure.
The exit of Uber and other multinational companies has raised concerns about Nigeria's ability to attract and retain foreign investment. Egbesola's call for reforms is timely, as the government seeks to improve the business environment and stimulate economic growth. The ASBON president's suggestions, if implemented, could help create a more favorable business environment, enabling local and foreign businesses to thrive and create jobs.
Key points
- The Association of Small Business Owners of Nigeria (ASBON) has urged the government to improve the ease of doing business amid growing exits of multinational companies.
- High interest rates and foreign exchange difficulties are significant obstacles for Nigerian businesses.
- Improved infrastructure, particularly electricity and roads, is crucial for reducing the cost of operating businesses in Nigeria.
