If you live and run a business in Nigeria, you are very much aware of the current currency changes and their impact on the economy. Nigeria’s naira has been devalued several times in recent years, leading to increased inflation, higher import costs, and decreased purchasing power. Small and medium-sized enterprises (SMEs) in Nigeria are feeling the pinch, with many struggling to stay afloat.
This has made it difficult for Small and Medium-sized Enterprises (SMEs) in Nigeria to thrive. In this article, we will explore the impact of the currency change on SMEs and provide five ways to survive the current money scarcity challenge.
Survival Strategies for SMEs
- Diversify your customer base: One way SMEs can survive the scarcity of the Naira is by diversifying their customer base. This means expanding your business beyond the local market and exploring new markets outside Nigeria. For example, a fashion designer in Ibadan could look to sell their products to customers in other African countries or even in Europe and the US.
- Embrace digital payment systems: Digital payment systems such as PayPal, Stripe, and Paystack are becoming increasingly popular in Nigeria, and SMEs can take advantage of these platforms to receive payments from customers in other countries. This can help reduce their reliance on the Naira and provide access to foreign currencies.
- Cut costs: When resources are scarce, it’s essential to find ways to cut costs without compromising on quality. SMEs can explore ways to reduce expenses, such as renegotiating contracts with suppliers, reducing energy consumption, or downsizing their physical office space.
- Leverage government incentives: The Nigerian government has introduced various incentives to support SMEs, such as the Central Bank of Nigeria’s Targeted Credit Facility (TCF) and the Survival Fund. SMEs can explore these options to access low-interest loans and other financial support.- though Naija people don’t trust the Government anymore
- Collaborate with other SMEs: In times like this, collaboration is crucial to survival in times of scarcity. SMEs can collaborate with other businesses to share resources, reduce costs, and explore new markets. For example, a group of SMEs in the food industry could form a cooperative to share production costs and access new markets.
In conclusion, the scarcity of Naira is a significant challenge for SMEs in Nigeria, but it’s not insurmountable. Businesses can survive and even thrive in this challenging environment by diversifying their customer base, embracing digital payment systems, cutting costs, leveraging government incentives, and collaborating with other SMEs.