Unfavourable policies like the purported Value Added Tax hike, Multiple taxes and lack of cheap credit are clogs in SMEs wheels
The poor state of roads in Nigeria, unfavourable policies like the purported Value Added Tax hike, and lack of cheap credit have eaten deep into the fabric of Small and Medium Enterprises, especially ones that operate within the food segment.
This was disclosed by the Chief Executive Officer, So Fresh Limited, Olagoke Balogun, in an exclusive interview with Nairametrics during the recent 10th anniversary of the food company.
According to him, timely access to fresh fruits and the right type, which is usually hampered by bad roads across Nigeria, has been a major challenge to production for the company over the years.
This is one of the reasons the company depends on raw materials imported from Cotonou, Benin, where it sources specific kinds of pineapples and green apples.
However, since the closure of the border, business hasn’t been the same, as suppliers continue to call to report unavailability of these fruits.
He said, “A lot of pineapples and coconuts consumed in Nigeria are imported from neighbouring countries. That alone is a challenge, as it increases the prices of our products. Sometimes you have those goods far away in Benue but getting them to Lagos is a big challenge. Also, challenges in logistics affect the fruits and vegetable market.”
On what he described as counter-productive policies by states and the federal government, the So Fresh co-founder explained that policies, multiple taxes, the rumoured VAT hike, and the cost of doing business have been sources of hindrance in SMEs production.
Unfortunately, he does not see that changing anytime soon. “These are still issues for us, but we have been able to cope more with it because the company has grown and we now understand our rights better, as we can challenge on somethings; we could not do that 10 years ago. We pay multiple taxes across parastatals, agencies, as everybody comes wanting to have a pie of what they think you have. it is almost an on-going battle for us.
“When we pay VAT, we are not able to charge our clients because a lot of our suppliers don’t issue VAT receipts and we end up paying the full value of VAT. It is Nigeria, we cope and learn through it, and we will continue to do the best we can,” Balogun said.
According to him, though So Fresh has continued to grow since its establishment in 2010, the company’s growth has slowed down in recent years because of the economic situation of the country.
He said that the economy was dragging the growth of the business, increasing the cost of production, and affecting the purchasing power of its customers.
“The most obvious one is the rising cost. If you look at the cost profile for the business over the last nine years, it has been on a steady increase.
“In fact, within the last two to three years, we’ve almost doubled some of the cost of raw materials of things we use. And when we had the forex crisis, the price of almost everything doubled. We are almost reliant on diesel because outlets have to be powered. There’s also less spending power. When prices continue to increase, people will prioritise their needs, so it will affect the purchasing power of the populace. That’s also a concern,” he told Nairametrics.
Meanwhile, Kehinde Olomojobi, a Board Member of So Fresh, disclosed that the company would be injecting about $10 million into its expansion project within Africa. “This is to continue to inspire Africa to embrace a healthy lifestyle and to be one of the top companies to work within Africa. We will start with Ghana and other parts of West Africa,” he said.
What you should know
As an indigenous company, So Fresh isn’t only promoting healthy living and food safety, the company prides itself in providing job opportunities and training for young Nigerians, thereby giving them a source of living.
The company currently has over 120 staff with over 1000 people who have passed through the system. In addition, he maintained that the company served over 200,000 customers across board, and in 2019, So Fresh served over 600,000 meals.
For the past 10 years, So Fresh has maintained the leading position as the number one healthy food restaurant chain, providing fresh, delicious, nutrient-rich healthy meals and inspiring Nigerians to have healthy lifestyles.
The company currently has outlets in Opebi, ikoyi, Lekki 1, Surulere, Yaba, MM2, Ogudu, Oniru all in Lagos, and Gwarinpa in Abuja.
Abiola has spent about 14 years in journalism. His career has covered some top local print media like TELL Magazine, Broad Street Journal, The Point Newspaper. The Bloomberg MEI alumni has interviewed some of the most influential figures of the IMF, G-20 Summit, Pre-G20 Central Bank Governors and Finance Ministers, Critical Communication World Conference. The multiple award winner is variously trained in business and markets journalism at Lagos Business School, and Pan-Atlantic University. You may contact him via email - abiola.odutola@nairametrics.com.
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