PwC MSME Survey 2020

Case study: The Pottersland School (2 of 2) S The Pottersland School Issues / Problems Production: Power is a challenge because of epileptic supply and high diesel cost. Sourcing of uniforms is costly and cumbersome because local suppliers cannot meet the quality requirements in a timely manner. Also, provision of potable water is a challenge. Due to the terrain of our location, we currently buy water, as the cost of building a water system is beyond our reach. Finance: Getting funding from banks is a major challenge and funding cost is quite high. The issue of collateral is also a challenge for female-owned businesses. I once sought a loan from the bank and my husband was invited by the bank's credit department for interview before the loan could be disbursed. The loan approval process is quite long, and I have had to resort to borrowing short term loans from microfinance companies and cooperatives at a high interest rate. The Economy: The unstable economy has negatively impacted our business. Parents are unable to meet the school fees obligations, and many have relocated out of the country. We also cannot afford to pay salaries commensurate to the inflation rate and this affects the staff's motivation. Furthermore, budgeting has been difficult due to increasing cost of goods. Taxes and other fees/charges: We are burdened with multiple taxes, especially at the local government level. We have been asked to pay for parking permit for the school in a residential area. Talent: Recruiting and retaining quality teachers is a challenge. The curriculum of Nigeria's education faculties does not equip education graduates with the necessary skills and competences to function effectively as class teachers. We must train and re-train staff often. Support staff such as nannies and caregivers also have high occupational mobility. Technology: Technology is important in the delivery of high-quality education. Internet supply is expensive and connectivity is sometimes a challenge. Interactive boards and projectors are used in the classrooms and they are quite costly to purchase and maintain. Others: Transportation of pupils is a big challenge. Due to the peculiar nature of Lagos, many parents prefer their children to use the school bus. The cost of purchasing and maintaining the buses is rather high. Moreover, because of the economy, the school cannot charge for transportation to make money to cover replacement cost. What has been the impact of each of these challenges on your business? The impact of these challenges is that the business has not been able to break-even, as the cost of operations is about 50% of the turnover. As an SME business owner, what solutions or recommendations could you provide to overcome the peculiar challenges of operating in this environment? The business of education is a social enterprise, which the government needs to support for the benefit of the larger society. The success of a nation is largely dependent on its education system. For the nation to compete globally, we must develop critical thinkers and innovators who are committed to the development of the nation. Schools should be given grants and access to single-digit loans, thereby making quality education affordable and accessible. Furthermore, government should consider the societal impact of its policies. For example, nobody uses buses for luxury rather they are used for mass transit. Government should reduce the import duty on buses for the benefit of the poor and vulnerable members of our society, including school children and workers. What stakeholders are needed to act upon, or provide these solutions, and what will they need to do? The education ministry and the National Assembly should declare a state of emergency on education. They should provide the enabling environment for private schools to thrive. The government should recognise that SMEs are the backbone of any nation. Support should be given to genuine entrepreneurs in terms of intervention funds and make access to bank funding easier. PwC MSME Survey 2020 PwC June 2020 64

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