Following the recent hike in the price of premium motor spirit (PMS), also known as petrol, small businesses in Nigeria are scrambling to stay afloat. The Association of Small Business Owners of Nigeria (ASBON) has announced plans to implement survival strategies to prevent the collapse of micro, small, and medium enterprises (MSMEs) across the country.
This development comes as the Manufacturers Association of Nigeria (MAN) and ASBON warn that the increase in fuel prices could result in the scaling down of operations or the closure of more businesses.
In an exclusive interview with *Vanguard*, ASBON President Dr. Femi Egbesola highlighted the association’s efforts to equip MSMEs with strategies for survival. “We don’t have control over what the government will do, but we are focusing on what we can control. We are building the capacity of our members to be more innovative, creative, and resilient,” Egbesola stated.
He outlined several strategies for MSMEs, including diversifying into essential products, especially food and its value chain, improving product standardization, exploring export markets, and adopting technology to reduce operational costs. “We are determined to navigate these uncertainties with a clear focus on survival, growth, and scaling up,” Egbesola added.
However, both MAN and ASBON have expressed concerns about the broader economic impact of the fuel price hike. Segun Ajayi-Kadir, Director General of MAN, warned that rising transportation and production costs could lead to higher inflation, reduced consumer demand, and a buildup of unsold inventory.
“The cost of transportation will rise, and so will the prices of goods and services. This could further weaken consumer demand, leading to reduced manufacturing capacity and profitability,” Ajayi-Kadir said. He also noted that small businesses, which operate on thin margins, may be forced to shut down if they cannot pass on these additional costs to consumers.
Egbesola echoed these concerns, stating that the fuel price increase would exacerbate the already dire situation for small businesses. “Millions of small businesses are already struggling or have shut down. This development will cause more closures and reduce the profitability of those still operating,” he said.
As Nigeria’s MSMEs brace for tough times ahead, both business leaders and industry associations are urging the government to consider policies that could alleviate the pressures on businesses. Without intervention, the fuel price hike may lead to further economic strain, job losses, and the collapse of vital sectors of the economy.
