Operators of small and medium businesses have called for a shift in government’s policy to protect the sector from the current economic challenges faced by the country.

Speaking on Joy Business Pre-Budget Forum, ahead of the 2023 Mid-Year Budget, the CEO of Earthyria, Noung Faalong stated that high taxes, high lending rates, and increases in the price of raw materials are a big challenge for small businesses.

According to her, the situation has led to high production cost for businesses, forcing some to collapse.

“We have reduced the number of staff by 5 people, because we are not able to pay workers. It means that we are not able to produce like we do, it has also reduced our turnaround time because we do not have the needed hands to meet demand”, she recounted.  

She explained increasing cost of business has led to many companies laying off some workers in the SME sector to maintain a lean production line.

Citing some unfavorable macroeconomic conditions, Ms. Faalong  said high inflation and high interest rates, do not only affect businesses but the purchasing power of households.

This, she believes has given rise to low demand of products and reduced sales.

“It’s been difficult especially when you have the disposable income of consumers dropping and that has affected their ability to purchase products.”

On the need for targeted funding support, Ms Faalong called for improved education to enable all SMEs benefit fully. 

“We need a bit more education on how we can position ourselves to make it a bit more accessible. We can also decentralize the administration of these funding opportunities to spread it across the country”, she said.