N70,000 Transport Relief: Small Business Owners Warn Of Pressure On SMEs

Small business owners have warned that the Federal Government’s N70,000 monthly transport allowance for public servants could put pressure on small and medium-sized enterprises (SMEs), as private-sector workers may demand similar support from employers already struggling with high operating costs.

The President of the Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, said this while reacting to the intervention, which the government approved earlier this week after a conciliation meeting with organised labour.

Recall that the Federal Government had approved the N70,000 monthly transport allowance for public service workers across all levels for six months, starting in November 2026, following a conciliation meeting with organised labour. The government also agreed to begin minimum wage negotiations immediately. The current N70,000 minimum wage was set in 2024, up from N30,000.

Egbesola described the allowance as a welcome relief for eligible workers, saying it could lift morale, purchasing power and productivity.

“The Federal Government’s N70,000 monthly transport allowance for six months is a welcome relief for eligible public servants, with the potential to improve their purchasing power, morale and productivity amid rising commuting costs,” he said.

He cautioned, however, that the benefits would not reach workers and business owners outside the public sector, who face the same rising transport costs.

“Its benefits will not automatically extend to private-sector employees, artisans, traders, and nano and micro business owners, who face similar transport cost pressures,” he stated.

The allowance is part of measures agreed to cushion the effect of economic hardship on workers. The government also agreed to begin minimum wage negotiations immediately. The current N70,000 minimum wage was set in 2024, up from N30,000.

For SMEs, Egbesola said the concern is that the policy may raise expectations among their own staff.

“For SMEs, the challenge is that employees may increasingly demand similar support, while employers are already contending with high operating costs and limited capacity to increase wages,” he said.

According to him, nano and micro businesses are particularly exposed because higher transport and goods-distribution costs cut directly into their already slim margins, making it harder for them to stay in operation.

“Nano and micro businesses are particularly vulnerable because higher commuting and goods-distribution costs directly erode their thin profit margins,” Egbesola noted.

He acknowledged that the allowance could stimulate consumer spending by putting more money in the hands of beneficiaries. But he stressed that its wider economic impact would depend on sustainable funding and on whether the resulting rise in demand translates into real business growth.

The ASBON president urged the Federal Government to back the temporary relief with long-term measures to bring down transport costs and ease the burden on businesses.

“Government should complement this temporary intervention with affordable mass transit, improved roads and targeted support for small businesses. Workers’ welfare must improve without making business survival more difficult,” he added.