Micro, Small and Medium Enterprises (MSMEs) in Nigeria are grappling with a cascade of constraints that have been intensified by a nationwide cash crunch. Analysts predict a further decline in the economy, and the unrest sparked by the new naira crisis has become almost routine news. From the chaos on the streets of Port Harcourt to the bonfires and attacks by hoodlums in Lagos, the situation has inflicted unprecedented hardship on Nigerians across the board. For many businesses, the experience has been harrowing, disconcerting, and deeply painful, with MSMEs bearing the brunt because they largely rely on cash‑based payments.
Solomon Aderoju, National Vice President of the Nigerian Association of Small and Medium Enterprises, told The … that the hardship faced by MSMEs has become critical, with many businesses “collapsed.” He explained, “It’s terrible. It’s affecting us a very great deal because, as you know, many of our businesses are cash‑and‑carry. So it has really collapsed our businesses. It is not a good story to tell at all. It is affecting everybody, but mostly the MSMEs because of their cash‑and‑carry mode of operation. Some of our members don’t believe in account operations; they believe in cash‑and‑carry, so it is quite unfortunate.” Aderoju argued that the Central Bank of Nigeria should have followed the Bank of England’s approach to phasing out old notes, allowing old and new notes to circulate concurrently. He noted, “The UK changed their currency from Queen to King, and it took them over a year. We believe the old and new notes can still go concurrently. The mechanism is supposed to collect the old notes and give us the new notes, but in this case they collect the old notes and are not releasing the new notes. They should give us more time if they are sincere enough. There must be sincerity of purpose if they want us to live in the country.”
The NASME vice president also warned that poor sales caused by naira scarcity will ripple across the economy, undermining businesses’ ability to repay loans to financial institutions already pursuing them. Emmanuel Onuorah, President of the Premium Breadmakers Association of Nigeria, added that the apex bank should have ensured the necessary infrastructure for a cashless economy before implementing the new naira policy. He recounted the difficulty of obtaining a point‑of‑sale (POS) terminal from commercial banks, saying many smaller businesses could not complete the transition to digital payments within the timeframe set by the central bank. “We requested a POS from our bank but they did not give us for many months. Access Bank did not give us. So I turned to Moniepoint and Opay, and they are serving us very well. At the end of each day they hold the money in the wallet and then transfer it to our main account. It’s been serving us well,” he said.
According to Statista, Nigeria has about 41.4 million MSMEs. The International Labour Organisation (ILO) reports that MSMEs account for 96 percent of businesses and 84 percent of employment, contributing 48 percent of the nation’s gross domestic product. Vanessa Phala, ILO Country Director, emphasized this during a workshop on decent working conditions for PPE‑producing MSMEs in Abuja: “Successful enterprises are at the centre of strong economies and societies. They create employment and raise living standards. In Nigeria, SMEs contribute 48 percent of national GDP, account for 96 percent of businesses and 84 percent of employment. This sector significantly alleviates poverty and increases job creation.” Yet many MSMEs have not integrated into Nigeria’s rapidly digitising economy, leaving them vulnerable as cash scarcity hampers their ability to provide basic goods and services.
Prof. Akpan Ekpo, a renowned economist and former member of the CBN’s Monetary Policy Committee, warned that the cash crunch crippling MSMEs will have far‑reaching consequences. “It will have a completely adverse impact. GDP will reduce by almost 10 percent because of the non‑contribution of MSMEs. It will affect output because they cannot do their business,” he said. He criticised the timing and implementation of the naira redesign, noting that over 200 million Nigerians have been thrown into hardship. “You don’t mix politics with the economy. Just because elections are coming and people are buying votes, you don’t punish over 200 million people. The policy was ill‑thought, and the consequences will take a long time to rectify, even after the elections,” Ekpo added.
Gabriel Idahosa, Deputy President of the Lagos Chamber of Commerce and Industry, echoed these concerns in an interview with TVC. He described a logjam for businesses that still rely on cash transactions: “Since consumers don’t have access to cash, many products and services that would normally be bought with little money cannot be purchased. Whether you are a street‑side vendor, a supermarket, or a fast‑moving consumer goods manufacturer, you are directly affected. Sales are coming down, and our members are talking about it.” Idahosa noted that excessive traffic on e‑payment channels has forced many transactions to rely on relationship and trust, while others have broken down because suppliers lack confidence in receiving full payment. He argued that the current naira scarcity is not merely a cash crunch but a systemic failure stemming from poor planning and implementation by the CBN. He urged the central bank to devise emergency solutions to cushion the impact on Nigerians enduring unprecedented hardship that could have been avoided with proper planning.
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