An Economist, Dr Muda Yusuf, has outlined business resilience strategies for Micro, Small and Medium Enterprises (MSME) to successfully navigate the challenges and economic headwinds in 2023.
Yusuf spoke at the MSME Africa Series with the theme: “2023 Economic and Business Outlook Entrepreneurs and Business Owners” on Thursday in Lagos.
The economist, also Founder, Centre for the Promotion of Private Enterprises
(CPPE), said the outline for MSME success was pertinent this year to guard against the implications of political transition for the economy.
He noted that such transition was characterised by high uncertainty level, risk of policy changes, new appointments in key positions, subsidy removal and risk of post election violence.
Yusuf added that the macroeconomic terrain was currently beguiled by exchange rate risk, inflation risk, regulatory risk, policy risk, high energy cost, political risk, environmental risk amidst ongoing global headwinds.
He, however, said opportunities for election and campaign-related contracts existed for MSMEs in areas of logistics and election materials mobilisation.
“Nigeria is blessed with opportunities with a market size of over 200 million people, the largest economy on the continent with a young enterprising population.
“The monetary and credit outlook for the year shows that monetary policy points in the direction of further tightening of financial conditions.
“Also, with the Cash Reserve Ratio (CRR) already at all time high of 32.5 per cent and the Monetary Policy Rate(MPR) at all time high of 17.5 per cent; further tightening is expected because inflationary pressure is yet to abate.
“Therefore, MSMEs may need to explore other credit options like cooperatives or development finance,” he said.
Yusuf said the business resilience strategies for MSME include product functionality and durability, customer support, customised services and strong brand image.
He advised MSMEs to embrace cheap capital, reduced cost base, invest in technology that would reduce cost and use efficient logistics.
“MSME must deliver high quality services, embrace effective sales and marketing to communicate product uniqueness and stay agile and dynamic.
“Other strategies include increasing profits and market share by reducing costs while charging industry average price and concentrating on a particular niche market.
“MSME must have a clear understanding of the market and the unique needs of customers and endeavour to build strong brand loyalty,” he said.
On the redesign of the Naira, Yusuf said the development was a disruption to trade, commerce and livelihoods of Nigerians and should be extended.
