SMEs Lament High Cost Of Business In Lagos | Independent Newspapers Limited
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SMEs Lament High Cost Of Business In Lagos

Posted: Sep 11, 2015 at 12:01 am   /   by   /   comments (0)

By Kelvin Ekeh


OGBA and its environs in Ikeja, a densely populated part in the mainland area of Lagos State, is home to some of the country’s big names in Manufacturing. It is home to popular Food and Beverage giants like Cadbury, Coca Cola, Friesland Campina (Wamco Milk) and part of Guinness.

The presence of these companies have increased the business tempo in the area, hence the heavy concentration of small and medium businesses that indirectly service them and the people.

This should make the place a good business haven. This is, however, far from the reality, as owners of small and medium businesses in the area are full of lamentations of all sorts.   

Some of the business operators, who spoke to Daily Independent, in separate interviews, said that they are made to bear so many burdens that ordinarily should have been the responsibility of the government. These challenges, according to them, have made it difficult to do business there at their levels.

Mrs. Rita Ezenwafor, the Chief Executive Officer (CEO), Lulu World Ventures, operates a popular hair salon on Alhaji Kareem Ogungbeye street, Agidingbi.

In an interview with Daily Independent, Ezenwafor, who has been doing business in the area for 11 months now, confessed that it has been capital intensive. According to her, the cost of doing business is even higher when you have to pay to acquire the requisite skills needed to run the business.

She said:  “Doing business here is highly capital intensive. You pay even more when you don’t have the skills to do the business yourself. You pay for the training of staff and other things.”

Ezenwafor, however, particularly complained about the light situation. According to her, “One has to run on generator almost all the time. It is usually worse during fuel scarcity because we pay double.”

The salon owner also said the business leaves her with little time to herself.

“The business is time consuming because you have to be there to monitor you staff in order to get perfection; you are consoled that the customers are very good. In fact, they eventually turn more like family due to their openness. This is very encouraging.”

Tosin Adebola, Public Relations Officer (PRO) at Justy Confectionaries, on George Crescent by Wempco Road, Ogba, also spoke of similar challenges.

She, like Ezenwafor, said doing the business of food in the area is highly capital intensive, as the cost of production cost is extremely high. “When you add the cost of diesel, to the cost of packaging the products like sealing, and other procedures, you are almost left with little or nothing to make as profit.

“Meanwhile, the turn-over can be very low sometimes, as sales fluctuate due to unstable demands. A few times, goods already supplied to wholesalers get returned. Most times they are disposed at our own expenses.

Addable works in a relatively new area of therapeutic food, which is still not very popular in Nigeria. She, however, said, awareness is growing, but at the moment the company bears very huge cost of production.

Abuchi Nkemneme has been operating a small car painting shop in Agidingbi, Ikeja for over two years now. He is also full of similar lamentation.

In an interview with Daily Independent, he said, “Running a business like this can be very frustrating in terms of heavy tax burden. The roads are also bad, so these make paint supply very difficult. The import procedure is also a big problem.”

These challenges, as outlined by business owners in parts of Lagos are part of similar ones highlighted in a recent by the CNN, which listed about 13 of such.

Those listed in the CNN report include, unexpected expenditure, need to stay ahead of your rivals, nagging traffic, among others.