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How Government Policies Are Slowly Choking Nigerian SMEs

Nigeria often describes small and medium-sized enterprises (SMEs) as the backbone of the economy. It sounds good in speeches and policy documents. But for business owners on the ground, that praise feels empty. If SMEs truly matter, the way they are treated tells a different story.

Across cities like Port Harcourt, the real economy is visible in everyday businesses—tailors, phone repairers, food vendors, logistics riders, pharmacies, and digital service providers. These enterprises create jobs, train young people, and absorb those the formal sector cannot. Yet survival, not growth, remains their daily focus.

Unreliable electricity forces dependence on generators. Fuel prices rise, rent increases yearly, and internet costs continue to climb. On top of these, SMEs face multiple taxes and levies from different authorities, often without clarity. Many business owners pay simply to avoid harassment.

Access to finance is another major hurdle. While banks claim to support SMEs, high interest rates, heavy collateral demands, and complex paperwork shut most small businesses out. Government intervention funds exist, but information rarely reaches the smallest operators, and access often appears selective.

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Poor infrastructure acts as a silent tax. Bad roads raise transport costs, unstable power damages equipment, and flooding destroys goods. These challenges reduce profit margins and push prices up for consumers.

Even digital policies, presented as progress, often arrive without adequate support. Cashless systems and online compliance tools are introduced with little education, leaving many small traders struggling to adapt.

SMEs are not asking for miracles. They want clear and consistent tax systems, realistic access to credit, basic infrastructure, and policies shaped with real business owners involved. Countries that built strong economies protected their small businesses until they could compete.

If Nigeria truly seeks growth, employment, and stability, SMEs must stop being an afterthought. Until then, calling them the backbone of the economy will remain a slogan—repeated often, but rarely felt by those keeping the economy alive.

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