Small and Medium Enterprise stakeholders have again raised the alarm over their inability to restock goods, especially in shopping malls and retail outlets across the country.
The operators cited multiple regulatory hurdles, shrinking access to credit, prioritising foreign exchange and persistently high inflation as the leading culprits behind increasingly empty shelves.
This fresh outcry follows an earlier report by The PUNCH in October 2024, which revealed how economic pressures, including FX instability and high inflation, had severely hampered retailers’ capacity to replenish stock.
President of the Association of Small Business Owners of Nigeria, Dr Femi Egbesola, told The PUNCH that recent regulations by the Standards Organisation of Nigeria made it harder for retailers to restock as before alongside other multiple challenges.
“One of the reasons for the empty shelves is that SON made a rule to malls and supermarkets that from March 1, any product without SON certification should not be displayed in the mall. Before then, very few products had SON certification — they all had National Agency for Food and Drug Administration and Control,” Egbesola said.
He criticised the policy as a duplication of efforts, adding that “malls refuse to collect products from SMEs that do not have the SON number”, and even those willing to comply “may wait three months or more” to get certification.
ASBON’s president noted that the development has led to the exclusion of many SME products from retail shelves, as “they are being marginalised from selling in the malls and supermarkets”.
He emphasised that the regulatory move hurts both small businesses that produce goods and retailers because the “absence of many of the products that should have ordinarily been in the mall are no longer in the mall. And to me, that is not too good.”
Esgbsola recognised another factor is the rising cost of credit and unfavourable payment terms, with many malls demanding local purchase orders while delaying payment for up to 90 days. “With the economic uncertainties and very high interest rates, it is very difficult for SMEs to fund production and wait for up to three months to get paid,” ASBON’s president remarked.
SMEs respond to this challenge by seeking alternative markets, including exports, which seem more profitable.
“While it is difficult to meet the requirement for international communities, we now can sell to African countries through the African Continental Free Trade Area,” Egbesola remarked. “That makes it more profitable to sell because the exchange rate remains in dollars, and dollars are of good value in Nigeria.
So SMEs now prefer to sell their products, their wares, to other African countries, earn foreign currency and come back home to change it to Naira.”
While small businesses increasingly explore the international market, the Nigerian MSME base is fast shrinking as local manufacturing keeps taking a hit.
According to Egbesola, “The number of micro, small and medium enterprises that are actually in the real sector – in the manufacturing sector – is reducing by the day. And that’s also accountable for what you are seeing in the mall at the moment.”
He added that many SMEs do not have raw materials to operate, as they source them overseas, calling back to access to credit and foreign exchange competition with larger corporations.
“It becomes very challenging for MSMEs to compete favourably in the market,” Egbesola asserted. “You will need dollars to buy the raw materials. Most times, it is difficult for SMEs to get dollars or foreign exchange in the regular market, which is the commercial bank.
“By the time we go to the black market to get dollars, buy it and bring it to the country, you discover that you are unable to compete because it becomes too expensive compared to the larger corporations and manufacturers that can access the FX in the commercial bank and sell theirs at a better rate, ” he explained.
Egbesola suggested innovations for SMEs to solve their restocking crisis, including subletting empty spaces to small vendors or introducing mixed-use strategies to boost profitability.
He explained, “If I have some empty spaces in my mall, can I sublet it? Can I bring in somebody doing yoghurt or parfait to have a space there?
“Can I bring in somebody who wants to market perfumes to have a space there so that I will not be having the total overhead on myself? These are some of the basic ways that malls can use to endure the challenges that they, as MSMEs, are facing at the moment.”
He also encouraged malls to support SMEs with soft loans to meet regulatory requirements. “Can they give loans to those SMEs, supplying them so they can register with SON?” ASBON’s president asked.
Egbesola further called on mall operators to unify and advocate collectively. “If they synergise, it will be easier for them to air their concerns to the government,” he said.
Director of the Nigerian Association of Small and Medium Enterprises, Eke Ubiji, echoed similar concerns.
Ubiji explained that high prices still affect retailers and SMEs despite the rebased Consumer Price Index, which has brought the inflation rate down to a current 23.18 per cent.
“The prices of most products have gone above the rooftop,” Ubiji exclaimed, linking high prices to a decline in consumer patronage and slower restocking cycles.
“If you are restocking, you must also put into consideration the cost of those goods you use to restock,” he observed. “If the prices are so high, it will also affect the people that will come to patronise the stockists.”
Commenting on the SON certification policy, Ubiji acknowledged its impact on supply chains. “From March 1, the new regulation prevents them from putting up products on shelves without SON certification,” he said, describing it as “a good reason” why many sellers are holding back.
Ubiji, however, advised mall operators to put proper internal compliance systems in place, stating, “Before people come to a shop to sell their products in a mall, there must be internal due diligence to ensure that such products meet safety standards,” he said.
He urged retailers to insist on the best products from the businesses they get their stock from to drive sales through recommendations.
“There are certain requirements retailers should have. Not just in the construction of the mall, but in the display of products you want people to come and buy in that place,” NASME’s DG stated. “The owners of the shopping malls should have a unit that ensures that people coming there to exhibit or sell their products comply with safe standards with regard to the products they want to sell in such malls.
“If you do that, that means people who come there to buy your products will use their money to also advertise your products, saying, ‘Ah, if you want to buy good and quality products, go to that shopping mall.'”
