Economy
MSMEs Need N13trn to Survive Current Nigerian Economic Crisis—PwC
By Adedapo Adesanya
Micro, small, and medium-scale enterprises (MSMEs) in Nigeria require an estimated N13 trillion ($32.2 billion) in financing to survive the current challenging operational environment, a new study by PwC Nigeria shared with Business Post has revealed.
PwC Nigeria, in its 2024 MSMEs Survey, provided insights into the trends, challenges, and strategies essential for small businesses in Nigeria to build resilience to succeed in a dynamic landscape.
In a statement that accompanied the PwC MSME Survey 2024 titled Building Resilience: Strategies for MSME Success in a Changing Landscape, an in-depth analysis of their operations, macroeconomic conditions, financing, digitalisation, and regulatory and fiscal environment based on 567 MSMEs across 13 sectors and 29 states were looked into.
It was revealed that the MSMEs’ growth potential in Nigeria was stunted by funding gaps, power outages, and over-taxation. Others include inadequate skilled labour, insecurity, and government policies.
In terms of funding, 35 per cent of the businesses surveyed cited inadequate access to finance as their number one challenge, with PwC noting that micro and small enterprises, particularly in agriculture and retail, need loans under $20,000.
“However, limited private sector lending, poor infrastructure, and lack of documentation hinder access to credit. While digital finance is emerging, innovation is crucial to bridge the gap and serve MSMEs effectively,” the statement noted.
The survey also found that infrastructure challenges, particularly electricity, account for the biggest costs to the daily operations of MSMEs with unreliable power supply a major challenge for 21 per cent of businesses.
“Nigeria’s power sector faces numerous issues, including deteriorating plant capacities, poor maintenance, inadequate gas supply, limited distribution networks, and the commercial viability of DisCos operations,” PwC noted.
Other structural challenges include multiple taxation (12 per cent), inadequate skilled labour (11 per cent), and insecurity (10 per cent).
These challenges have harmed the business environment, contributing to significant economic costs for MSMEs and the broader economy.
Speaking on this, Mr Sam Abu, Country Senior Partner, PwC Nigeria, “MSMEs continue to contribute significantly to the global economy, creating jobs, generating income, and fostering skills development. These contributions make the sector pivotal to Nigeria’s growth, especially now given our country’s current challenges.
“However, the sector’s full potential remains untapped due to persistent challenges that hinder its ability to lift people out of poverty and drive the economy forward. Despite these challenges, Nigerian MSMEs have demonstrated remarkable adaptability in navigating a complex business environment characterised by challenging macroeconomy and government policies, highlighting their potential to drive economic growth.”
On her part, Mrs Abisola Atitebi, Partner, and Head, MSME Help Desk, PwC Nigeria, added that, “MSMEs are a key driver of Nigeria’s economy, and their success is crucial for overall economic growth.
“The PwC MSME Survey 2024 highlights the sector’s resilience despite facing significant challenges such as macroeconomic headwinds, limited financing, and the urgent need for digital transformation.”
By Adedapo Adesanya
Crude oil went down on Tuesday after a projection showed steady demand in the world’s largest oil producer, the United States, for 2025, Brent futures declining by $1.09 or 1.35 per cent to settle at $79.92 a barrel and the US West Texas Intermediate (WTI) crude losing $1.32 or 1.67 per cent to finish at $77.50 a barrel.
On Tuesday, the US Energy Information Administration said the country’s oil demand would remain steady at 20.5 million barrels per day in 2025 and 2026, with domestic oil output rising to 13.55 million barrels per day, an increase from the agency’s previous forecast of 13.52 million barrels per day for this year.
Also, the oil market shrank a few days after prices gained following new US sanctions on Russian oil exports to India and China.
On Monday, prices jumped 2 per cent after the US Treasury Department on Friday imposed sanctions on Gazprom Neft and Surgutneftegas as well as 183 vessels that transport oil as part of Russia’s so-called shadow fleet of tankers.
Analysts say this move could have a significant price impact on Russian oil supplies from the fresh sanctions, however, their effect on the physical market could be less pronounced than what the affected volumes might suggest.
ING analysts estimated the new sanctions had the potential to erase the entire 700,000 barrels per day surplus they had forecast for this year, but said the real impact could be lower.
Uncertainty about demand from China, the world’s largest oil importer, could impact tighter supply this year.
China’s crude oil imports fell in 2024 for the first time in two decades outside of the COVID-19 pandemic, official data showed on Monday.
Meanwhile, the American Petroleum Institute (API) estimated that crude oil inventories in the US fell by 2.6 million barrels for the week ending January 10.
For the week prior, the API reported a draw of 4.022 million barrels in US crude oil inventories amid build season, while product inventories saw a hefty build.
In 2024, crude oil inventories dropped by more than 12 million barrels, according to the API’s inventory data. In the first few weeks of 2025, crude inventories have shed more than 6.6 million barrels.
Official data from the US EIA will be due later on Wednesday, confirming the actual level of stockpiles.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited came under heavy selling pressure on Tuesday, going down by 1.66 per cent as investors embarked on profit-taking after most stocks on the trading platform gained in the past few trading sessions.
It was observed that the industrial goods sector was the most affected yesterday as it went down by 4.99 per cent due to the decline suffered by Dangote Cement and others.
The insurance continued its downward trend during the day as it lost 2.80 per cent, the consumer goods counter fell by 0.27 per cent, and the banking index shed 0.10 per cent, while the energy sector appreciated by 0.29 per cent.
At the close of business, the All-Share Index (ASI) deflated by 1,745.16 points to settle at 103,622.09 points compared with the previous trading day’s 105,367.25 points and the market capitalisation moderated by N1.1 trillion to finish at N63.188 trillion versus Monday’s N64.252 trillion.
Business Post reports that investor sentiment remained weak on Tuesday after the bourse ended with 41 depreciating equities and 23 appreciating equities, representing a negative market breadth index.
Honeywell Flour lost 10.00 per cent to trade at N9.54, Dangote Cement declined by 9.98 per cent to N431.00, Julius Berger crashed by 9.98 per cent to N139.80, Sovereign Trust Insurance decreased by 9.68 per cent to N1.12, and Prestige Assurance tumbled by 9.30 per cent to N1.17.
On the flip side, Northern Nigerian Flour Mills appreciated by 10.00 per cent to N45.10, Livestock Feeds grew by 9.91 per cent to N6.10, Academy Press expanded by 9.90 per cent to N3.22, University Press increased by 9.82 per cent to N4.81, and Neimeth gained 9.76 per cent to quote at N3.15.
During the session, market participants bought and sold 503.3 million shares valued at N12.6 billion in 12,900 deals compared with the 505.8 million shares worth N8.1 billion traded in 14,259 deals a day earlier, indicating a rise in the trading value by 55.56 per cent and a drop in the trading volume and number of deals by 0.49 per cent and 9.53 per cent, respectively.
The most active stock for the session was GTCO with 54.4 million units worth N3.2 billion, Nigerian Breweries transacted 32.2 million units for N1.0 billion, Universal Insurance traded 30.8 million units valued at N22.6 million, AIICO Insurance exchanged 26.6 million units worth N47.2 million, and Chams transacted 20.0 million units valued at N40.9 million.
By Adedapo Adesanya
The federal government is offering two new savings bonds with interest rates between 17 and 18 per cent through the Debt Management Office (DMO).
In a statement by the agency, the country said retail investors can purchase the two-year bond maturing in January 2027 at 17.23 per cent interest, while the three-year paper maturing in January 2028 at a coupon rate of 18.23 per cent.
Bonds are very safe financial instrument that serve as investments because they are backed by the federal government, which promises to pay back the money.
According to the DMO, people can buy these bonds starting January 13, 2025, until January 17, 2025, with allotment expected on January 22, 2025, and the interest to be paid to investors every three months – in April, July, October, and January.
These bonds have some special features. They are tax-free under both company and personal tax laws.
Big investors like pension funds and trustees are allowed to buy them and each bond costs N1,000 each.
However, interested investor can only buy at least N5,000 worth, and can’t buy more than N50 million.
This comes after the Ms Patience Oniha-led debt office said the Nigerian government was offering three bonds worth N150 billion in September 2024.
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