Many small and medium scale enterprises have not been finding it easy to carry on with their businesses since the country was thrown into the problem of lingering fuel scarcity. Some have had to device other means, while others have closed their businesses based on the high cost of running those businesses.
Our reporters, Oladunjoye Phillip, Bamidele Ogunwusi, Apata Oyeniran and Olamide Bakare, went to town to feel the purse of these business concerns.
These indeed are trying times for small businesses in the country as the lingering fuel scarcity has impacted negatively on their activities.
Many small scale businesses are now grounded for lack of fuel to power their operations. Many Nigerians had expected that the fuel situation would have improved by now based on the assurance given by the minister of state for petroleum resources that petrol scarcity will end by April 7.
Instead of abating, the fuel crisis seems to be waxing stronger impacting on business activities, most especially, micro and small scale business operators.
Our reporters that went to town in different parts of the country came back with the same type of agonizing experience these set of people are passing through.
SMEs Operators’ Experiences
For instance, Mrs. Modupe Adegoke, a frozen food vendor at Agege area of Lagos State, told Independent that she has had to close her shop in the meantime because she could not afford to buy fuel, which is now selling between N150 and N160 in some of the filling stations that have the product.
“I don’t know how I will cope and how much I will sell my products if I buy petrol at N150. Everybody knows how much a kilogram of fish sells, but since there is no light and petrol is not easy to come by, and to avoid any embarrassment from consumers, I have to close my shop for now,” she said.
Mrs. Grace Chinedu, a grocery store owner in Oke Aro area of Ogun State, lamented bitterly that she could no longer sell cold drinks, where she used to make more sales to feed her family. “Before the beginning of this fuel scarcity, I was making more than N5000 daily from the sales of cold drinks. But now, I could hardly sell up to N300 a day. The weather is harsh and everybody wants something cold. But as there is no fuel to power my generator, it has affected my business adversely,” she said.
Also, Mr. Jericho Adeyinka, a fashion designer, who works on the Island, said that the fuel situation as almost crippled his business as he could no longer go to the office regularly. “The fuel ‘wahala’ has almost crippled my business. I can no longer go to the office regularly because I cannot afford the fares, neither am I able to buy petrol for my generator.
“So, what I have decided to do is to work from home on certain days, so that I don’t disappoint my clients,” he added.
According to the Director General of Lagos Chamber of Commerce and Industry, Muda Yusuf, “The fuel crisis is further hitting productivity during the worst economic slowdown in 15 years. “Many people cannot get to work on time or at all, because either they cannot get fuel for their cars or they cannot afford higher transport costs.”
The situation has undoubtedly affected every aspect of live in the country has transportation fares have also increased by more than 100 percent in most cases.
Impact On Transportation
The General Manager of Christ Light Transport Company, Mr. John Ezaka, whose vehicles ply the Lagos-Abakaliki route, said that sales have reached an all-time low as a result of the scarcity of fuel.
“We have 50 buses on our fleet located in our three parks in Lagos, Ijebu-Ode and Abakaliki.
“But since the beginning of the year, our business has been experiencing a lot of challenges, particularly the scarcity of fuel.
“We have had to increase our transport fares from the N3, 200 to N4, 200, but we discovered that many people are now afraid to travel because they are not able to afford our new fares.
“In the past, a total of three or four buses departed Lagos for our various destinations daily, but now, we would be lucky to have even one full bus daily.
“It wasn’t this bad last year, so our sales have seriously reduced,” he said.
Also, the manager of Motlan Printing Press at Oshodi, Mr. Olanrewaju Dunmiju, said he was stranded at Iyana-Ipaja for over three hours before he decided to walk to the next bus stop because he has lots of pending work to do in his office.
“I have a lot of work to do at the office, so I can’t afford to waste my time waiting endlessly at the bus stop because those I met there are still there,” he said.
In Lagos State for instance, transport fare from Agege to Yaba, which used to be N150 has gone up to N400 while Iyana-Ipaja to Oshodi is pegged at N300, instead of N100.
From Ikorodu Garage in Lagos to Ogijo in Ogun State, along the Ikorodu-Sagamu Road, is now N200, instead of N100, while the fare from Ikorodu to Mile 12 is now N250, instead of N150.
A driver, who operates the Oshodi to Orile Iganmu route, Mr. Tunde Ajani, said that the transport business had not only become stressful but was no longer lucrative because of the hardship encountered in the pursuit of fuel.
“On the days I want to buy fuel without patronising the black market, I spend more than two hours at the filling station and you know what that means to the business.
“I will at the end of the day make my delivery to the owner of the bus, who does not care about how and where I get my petrol.
“It has become a ritual of headaches and worries each time I think of where the 5-litre petrol might come from,” he said.
Meanwhile, the situation is the same in most of the states covered by our reporters, as fuel was sold at exorbitant prices while ‘black marketers’ were ripping people off.
The worsened situation in Kaduna, for instance, was further compounded with the ban by the Kaduna State Government on the sale of petrol in jerry cans, which became effective on Wednesday April 6.
As Kachikwu has set April 7 as the deadline for resolving the perennial scarcity, Independent took a tour of Kaduna city, especially the metropolis, to assess the situation as regards the “fuel queues” at both the major and independent marketers of petroleum products, including the NNPC mega stations.
The situation in most of the major fuel stations visited showed that a good number of them still have their gates shut to customers since they did not have products to dispense.
Arising from its weekly State Security Council meeting, the state government had announced the ban of the sale of petrol in jerry cans across the 23 local governments in the state; threatening to prosecute anyone found flouting the order.
The decision was said to have been based on legal and security considerations, compounded by the environmental hazard of petroleum products in jerry cans which is capable of causing harm to the general wellbeing of the citizenry in the state.
“Noting the difficulties imposed by the current petrol scarcity, the council appealed to citizens to remain patient as it assured the public that the state government is working with the NNPC and other agencies to reduce the hardship associated with the shortages of petroleum products,” the state government said in a statement.
It also observed that the unsafe handling of petroleum products during periods like this had been associated with fires, destruction and fatal consequences for innocent victims.
The Kaduna State Security Council which was attended by all the traditional rulers, law enforcement agencies, military and para-military heads in the state, directed the arrest and prosecution of anyone found violating the ban, and the outright confiscation of any petroleum products found in their possession.
“Residents of the state are urged to help uphold and enforce the Kaduna State Petroleum Products (Anti-Hoarding and Adulteration) Law of 1992. This law empowers a task force to ensure that petrol is sold in a safe manner, and imposes a financial penalty on violators,” the statement further stated.
All through the city centre, long fuel queues were a common feature at the few stations open to motorists, and commuters were forced to pay exorbitant fares for distances that usually cost far less due to the scarcity.
A staff of one of the state ministry spoken to by Independent broke down in tears as she narrated her ordeal and challenges in trying to get to the office.
“I have been out of my house since 6.30 a.m. to enable me get a vehicle on time to the office but see me now by 7.30 I can’t still get a vehicle to town; all the commercial buses are parked at filling stations. I have decided to go back home because I cannot kill myself,” she stated.
“I am already hypertensive. If I put myself through more stress I don’t know what will become of me. Is this the change you people promised us? Does change come with sending poor Nigerians to their early graves?” she asked.
“It is you journalists who are causing all these problems for Nigerians. You have refused to write and let the government know that people are really suffering. Please let them know that Nigerians are groaning in serious pain. I don’t know for how long we can go through this,” she stated.
Recounting their ordeal as a result of the lingering fuel scarcity, Mr. Williams Dada, an accountant, said: “It is unfortunate that we find ourselves in this kind of hardship. Things are really becoming difficult for us as a people.
“I brought my car out but when I saw the heavy traffic along the Lagos-Abeokuta Expressway, I parked it somewhere to board commercial vehicle because I have just a little fuel left.”
Dada urged the relevant authorities to save workers from suffering further pains because of fuel scarcity.
A civil servant at the Maryland bus stop in Lagos, who pleaded anonymity, said: “I am actually going to my workplace at Falomo, but getting a vehicle is just not easy.
“I don’t know when I will get to the office today, but it can’t be earlier than 11a.m. because this is already a few minutes after 9 a.m., meanwhile I left my house at Ayobo by 6:15 a.m.”
Similarly, the general secretary of the Airport Cab Operators, Mr Olalekan Agboola, said the operators had to increase their fare because of the fuel scarcity. “The increment is because of the fuel scarcity. We are praying that the situation presently should return to normal. When everything is okay the transport fare will also drop.
“We are begging the government that it should intervene because people are seriously suffering right now,” he said.
A cab operator, Mr Sule Ibrahim, said he queued for several hours to buy 20 litres of fuel at N4,000 to enable him to work for the day.
He said, “We buy fuel at very expensive prices and until the scarcity ends, we don’t have any option than to increase transport fares.
“We are appealing to government to look into the situation. It is affecting us negatively because we are spending so much time at petrol stations”.
Another respondent, Mrs. Ada Imohinmi, a ticket officer at the MMIA, said the situation was becoming unbearable, especially for low income earners working at the airport.
“We are really suffering because of this fuel scarcity. I live at Agbado Ijaiye and now I have to leave home very early.
“The cost of transportation not only within the airport has gone up and yet, my salary is still the same. So, it is not easy to cope,” she added.
Independent checks in Kogi State revealed that petrol is sold for between N180 to N250 depending on the part of the state one is doing the purchase.
In Benue State, the product currently sells for between N215 and N300 per liter at fillings stations while blackmarketers in the state are saling the product for between N300 and N350 per liter.
In Makurdi, the state capital the product at filling stations goes for between N215 and N250 while in other parts of the state among them Gboko and Logo Local Government Areas (LGAs) of the state, the commodity goes for N300 per liter at filling stations.
The cost of transportation fares from places like Makurdi to Vandeikya which used to cost N700 is now N1000, while that of Makurdi to Gboko has move up from N500 to N700.
According to our findings, the cost of petrol in Akwa Ibom is between N200 and N230 per liter.
Some car owners and users have adjusted to public means of transportation, even as some complain to have parked ?their cars at mega stations in expectation of fuel to buy, as whatever was left in the tank could not take them home.
A tricycle (keke) operator, Mr. Ndifreke Ekong who ?also spoke with Independent on the issue, said life was becoming quite difficult for him as he has not been able to make expected returns to the owner of the tricycle.
“This government is not doing well at all. Is this the type of change Buhari was talking about? I do not think these people have the interest of ordinary Nigerians at heart. Look at me, a father of two, I took this keke on hired purchase, I make returns every week, now how do I meet up when I spend a minimum of five hours at the filling station and end up buying at exorbitant rate? They have kept jobs for those related to them, why are they also sealing every other openings of survival,” he lamented.
Groaning From Operators
The ongoing fuel scarcity nationwide has been having huge toll on the small medium enterprises in the country. The situation is made worse by the drastic drop in electricity supply in the country. From commercial bus and car drivers, hair dressing salons operators, barbers, vulcanizers, restaurant operators, electronic repairers, moi-moi sellers, cyber cafe operators, bar operators, tricycle operators to commercial motorcycle riders, the cries are deafening.
Mr. Tolu Olawale, a dry cleaner in Ifako Ijaiye in Lagos said things have been so bad for his business in the last two months and that to deliver any job to his customer he has to add more charges for services rendered.
His words: “Before now, I do wash a shirt for N100 but with the current economic situations in the country where I have to buy petrol for between N200 and N300 per litre, I have no other choice but to increase my charges. A shirt is now N200”.
He added that prices of some of his services have equally increased. A pair of trousers which was N150 is now N250, a complete Buba and Sokoto which was N250 is now N400, a complete agbada which was N500 is now N1,000, while a pair of suit which was N700 is now N1,200.
Nse Udoh, a 28-year-old father of two, is a vulcaniser at a spot near the popular Ikwerre Road in Port Harcourt. Udoh laments that since the current fuel scarcity began some weeks ago, his income has nosedived as his business has not been thriving as it used to be.
“Fuel now sells for N250 a litre and I need N1,000 to buy four litres of petrol to fill my pumping engine. I spent just N350 to buy the same four litres before this scarcity. I used to charge N100 to inflate one tyre but now, I have increased the fee to N200 to make ends meet,” he said.
Udoh’s predicament is that majority of his customers – commercial bus drivers and tricycle operators – have stopped patronising him because of the increased charges. Every day, buses and `keke’ (tricycles) come to my corner at a bus stop along Ikwerre Road to check their tyres.
“But they now find it difficult to accept the new prices I introduced. Honestly speaking, it is not my fault, I just have to make ends meet because I also have a family to feed at home,’’ he said.
Mrs Charity Braide, a mother of four who sells “moi-moi’’ (steamed bean pudding) in some schools, also shares similar sentiments. “It has not been easy for me since the current fuel scarcity began. Each time I go to the market, the prices of the ingredients and condiments I use for preparing `moi-moi’ keep on rising.
“Worse still, I now pay more for transport to go round schools to sell my `moi-moi’. I used to sell each wrap of `moi-moi’ for 50k but I have to increase it to 60k. Some teachers and students no longer buy it. I was forced to add some money to enable me to continue to be in business but some of my customers have not come to terms with the reality,” she said.
Braide says she will try her best to remain in business, in spite of the rising costs of doing so due to the protracted fuel scarcity. “With this little business, I feed my family and we manage to make ends meet. It has been quite tough for me but I will not lose hope; I will continue to work hard,” she said.
The current fuel scarcity could have been a very sad story for Mr. Kufreabasi Essien and his family but for the quick intervention by a good neighbour. Essien, a mason and father of four, says he once asked his seven-year-old daughter, Ini, to buy fuel in their Elioparanwo neighbourhood, near Port Harcourt.
“However, her search for fuel took her outside our neighbourhood. If not for our neighbour who saw Ini in another area and knew that she had missed her way, we could have probably been in big trouble by now,” he said.
Essien recalled: “When my neighbour saw Ini, she was already crying and asking for her way back home. On our part, we became very restive when Ini spent over an hour for an errand which typically, could have lasted just a few minutes.’’
He appealed to the federal government to urgently look into practical ways of resolving the fuel crisis on time. “The effect of the fuel scarcity has been harsh on my business. I can no longer do daily business because the construction works where I am engaged have stopped for now. I earn at least N3,500 daily in the place I work because we are building an estate but work has stopped.
“Our client attributed the halt to fuel scarcity. I pray that the fuel problem will be quickly resolved, so that I can resume work and be able to feed my family,” he said.
Essien’s plight is somewhat similar to that of Chidi Oparaeze, a 22-year-old apprentice at the Ikoku Spare Parts Market in Port Harcourt. Oparaeze said he is not finding it easy to go to his place of work because of increased transport fares and feeding costs.
“My master gives me N500 for feeding and transport but I now pay more for my transportation to and from my home. I have to trek home at times, all in the need to save money. I have no alternative than to face the reality on the ground if I have to survive. Things have been quite tough but I have decided to trek at times to survive,’’ he said.
Mr. Ajomiwe Ezuma, a Port Harcourt-based historian and analyst, believes the current fuel scarcity has particularly affected small and medium-sized enterprises (SMEs) and low-income earners.
“This is because the owners of SMEs, such as barber shops and hairdressing salons, will shriek if they tell you how much they now spend to buy fuel. The situation is more critical because there is epileptic power supply in all the neighbourhoods; the option left for SMEs is to use generators if they must remain in business. Now, they are creaking under the yoke of fuel scarcity,” he said.
Ezuma, nonetheless, appeals to the people not to lose hope in the ability of government to end the scarcity soon. “I am sure that government is aware of the harsh effects of the current scarcity on low-income earners and operators of small businesses. We are all expectantly waiting for the rainy day,’’ he added.
Expressing similar optimism, observers hope that the government will soon find lasting solutions to the fuel crisis, which has somewhat become a recurrent occurrence.
Also, an Abeokuta based accountant, Mr. Femi Subair stated that the financial crisis that has crystallized into an economic slowdown has collapsed the confidence of Nigerians and Small Scale Entrepreneurs in government’s ability to cushion its effects.
He added that the biting credit crisis, waning consumers purchase capabilities, and depressed businesses climate has become worrisome to stakeholders.
“Walk around the corners of the state capital, you will see traders waiting for customers whose purchasing ability has depleted so much that less than 50 % of household needs can be met.
The Federal Government should by now begin to rub minds with the leadership of the National Assembly on the 2016 budget and see what it brings forth for the good of an average man on the street.
The crisis that has not spared small business owners in the fashion and cosmetics sector has led to astronomical rise in the cost of services in the sector.
Impact On Cost Of Living And Employment
Owner of Funky Hair and Beauty Salon, Bariga, Lagos, Mrs. Funke Adedeji told independent that since the cost of hair tonics and hair dressing lotions and needs have skyrocketed it was just normal for her to follow suit.
She explained that the rising cost of goods in the country has raised the cost of living while the standard in contrast has declined.
“Take for instance monthly rent for a standard shop in my area goes for N7,000 before the escalation of the economic crisis. With leaking roof tops, my landlord has increased rent to N10,000 without effecting a repair on the damaged roof.
This is addition to the cost of items for hair treatment nad dressing in the market. Prior to the crisis, the cost of Hair Extension attachment that was N350 has shot up to N550. Hair relaxer on the other hand from N1600 on the average depending on the brand is now N2, 200.
“In return we have to make up for all of these in the charges of professional fee charges on customers. That is the truth because we all trade in the same market. Washing and setting that costs N300 before the downturn in the economy is now N500 and that cuts across all other services we render to customers who are also sometimes sympathetic to the little difference it made on our income.
She added that in order to make ends meet her foray into sales of call card for telephone users and sale of soft drinks, pure and bottled water has not much difference due to the epileptic supply of electricity by the Discos.
“In fact we are running generator at a near loss to keep the business moving. Worst still, the electricity company has made life not worth living. At the end of the month huge bills are issued for immediate payment. What has happened to this country? She queried.
Operator of a unisex barbing salon, AJ Worldwide Unisex Salon, Ifako, Lagos told independent that the economic crunch has led to the loss of business as many customers now owned barbing clippers.
He lamented that the do-it-yourself approach adopted by many customers has led to many people wearing untidy hair especially children, saying it has also rubbed professionals of services and income needed to pay for other ancillary services by other providers.
“Times are really hard for small business owners whose survival is patronage centred. I have adopted a lot of measures to stay afloat and remain I business, but have not yielded significant difference at all.
I have reduced the number of my barbers to one and I also give support when the “need arises. Also, now I do home services to corporate customers all in an effort to shore up income generation.
The two sets of generator purchase for the business as alternative sources of energy works almost 12 hours daily. Electricity supply has not been stable and when it is restore it comes late in the night or just flashes for several times in the afternoon,” he added.
For Friday Ettim, a commercial motorcycle operator and resident of Isuti Road, a suburb of Igando, living in Lagos has never been a comfortable decision, saying he had no better alternative.
Ettim who lost one of his two motorcycles during riders faceoff with policemen at Ilamoye/ Ajao Estate late last year told independent that the hardship notwithstanding life to him continues till death comes.
As far as he was concerned, barring unpleasant encounters with street urchins and especially with police, the income that ranges between N3000 to N3500 added to what his petty trader wife realizes has been sustaining the family.
In spite of the harsh economic realities of his life, Ettim, an indigene of Akwa Ibom State from Uruan Local government Council Area, who struggle to pay for a his one room apartment, feeding allowance, and school children fee declared he would not return to his native homeland.
“These struggles are what make Lagos State thick for many people like me who struggle daily to make ends meet. Look from the little income I make daily contributions.
“Pointing at his near rickety motorcycle he said, “That savings is to enable me save for the purchase of new or fairly used Okada. Though a new ‘Bajaj Okada’ is about N200, 000 now, but with all things are possible,” he added.
A financial expert who spoke on the implication of the downturn in the economy as well as the recent fuel crisis on small businesses, Mr.Adebiyi Adesuyi said many businesses are fast closing shops owing to the declining state of the economy. According to him, businesses cannot cope under this harsh condition.
He said: “Businesses are closing down in droves. The government needs to sit up to address some of these issues. If you see a number of businesses that are planning to close down soon, you will be amazed. Information reaching us says that some businesses are already laying off staff to cut the cost on overheads. I think the issues affecting the state of the economy must be addressed to prevent things from aggravating beyond normal. I must confess that Nigerians are groaning under intense and excruciating economic conditions.”
Non Passage Of Budget A Factor
Similarly, another financial analyst who corroborated the position held earlier, Mr. Abimbola Agbebiyi, said government needs to act fast to avoid situation where small businesses that seem to have been groaning to die will not die. He avers that it was necessary for the Federal government to introduce stimulus to help revive the economy.
While urging government to quickly bury the difference between it and the National Assembly by resolving the impasse associated with the budget, Abimbola noted that the delay on its own had hugely affected businesses.
Abimbola said: “If you consider the enormity of the delay on small businesses, you would realize that it is enough to cripple business. As you are aware, if the budget had been passed earlier, a lot would have changed. We would have more money in circulation. Businesses would be fully impacted especially since this government is committing a huge chunk to capital project. With that mind, people will be engaged which may then cascade to increased business activities. So, I think government has no excuse to engage in further delay particularly with the groaning economic conditions we have found ourselves.”
When our correspondent went to town to understand the pains and anguish Nigerians were going through, virtually all of them insisted that government needs to act to prevent further crisis.
A grocery store owner, Mr. Obasi Anyim, who spoke with Independent, said the effect of the economic crisis coupled with the fuel scarcity has been quite telling on the business.
He said: “Essentially, the cost of running the shop has become higher because of the added cost of fuel scarcity and the fall in the value of the naira. Right now, the bulk of our goods are imported. So, we face a lot of challenge with regards to getting foreign exchange. Sometimes, we are forced to patronize the black or parallel market which means extra cost on our business. Before now, a lot of people used to buy goods. But since the economic crisis, sales have wane. Consumers no longer buy as much as they can. Even when they buy, they buy what is extremely important to them at that material time”.
While speaking with Adenrele Yemisi who runs a beauty salon, she said the crisis alongside the fuel scarcity have affected a lot. According to her, the expenses needed to sustain the business have gone up which had made things a bit difficult.
She said: “Right now, we spend more on power to keep the business. And because that extra cost is difficult to transfer it to consumers as it may likely affect patronage. If we insist on transferring the cost on consumers, we may lose some of them to competitors. So, we have to bear the cost. As we speak, it is already hitting into our bottomline. The business is not as profitable as it used to be. And if things continue this way, we might have to find an alternative means to survive.”
Another Nigerian who expressed frustration on the dwindling fortune of his business, Mr. Kabiru Abdullahi, a trader, said the economic crisis vis-a-vis the forex crisis have had huge impact on sales. Kabiru noted that sales have plummeted with waning consumers demand.
Kabiru said: “Essentially, this fuel scarcity and forex crisis has also affected my business in the way that the cost of transportation of goods have skyrocketed. What we have now is a situation in which goods that we used to bring in forN100, 000 now cost up to 250,000. So, we don’t have a choice but to move that on which means that prices cannot be the way they used to be. The implication of that is that we have lesser customers. By that, people that used to buy a bag of rice would have to cut down by either buying half a bag or not buying at all. It has affected not only our revenue but also how much we are investing in our businesses. We are also at the receiving end of this crisis. Because our customers are affected, their purchasing power has reduced. They cannot buy as much as they used to buy. Despite the fact that their purchasing power has reduced, we have now increased the cost of our goods. It means that it is a double tragedy for our customers. So, whatever affect our customers affect us.”
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