The Nigerian Economic Summit Group (NESG) has reported that nearly 30% of small and medium-sized businesses in Nigeria shut down between 2023 and 2024 due to tough economic conditions.
This means about 7.2 million businesses out of the 24 million registered MSMEs in the country stopped operations within two years.
NESG’s Chief Economist and Director of Research, Dr. Segun Omisakin, shared this during the launch of the 2025 Private Sector Outlook. He explained that Nigeria lost an estimated N94 trillion during this period due to business closures and multinational companies leaving the country.
“Between 2023 and 2024, business shutdowns and multinational exits caused an estimated N94 trillion economic loss. Also, 30% of MSMEs closed down, showing the country’s economic struggles,” Omisakin said.
Currency Drop and Economic Growth
Even though some policy changes helped improve foreign exchange, the value of the Naira continued to fall. In 2024, the official exchange rate averaged 1,479.9 Naira per US dollar, making it more expensive for businesses to import goods.
At the same time, Nigeria’s economy grew by 3.4% in 2024, which was the highest since 2021. But this growth was not enough to solve major problems like low productivity, inflation, and unstable policies.
NESG Board Director, Mrs. Wonu Adetayo, said the private sector must play a bigger role in stabilizing the economy and attracting investments. She stressed that businesses need a stable environment to grow and create jobs.
Businesses Should Be Involved in Government Policies
Speakers at the event said private businesses should have a say in government policies. They pointed out that investors are more concerned about stable policies than exchange rate fluctuations.
Groups like the Nigerian Association of Small and Medium Enterprises (NASME), the Nigerian Association of Small-Scale Industrialists (NASSI), and the Nigeria Employers’ Consultative Association (NECA) were encouraged to take part in shaping economic policies.
The President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), Dele Oye, urged the government to support businesses rather than compete with them.
“The government should focus on creating policies that help businesses grow. Business groups should be involved in important decisions so that policies benefit everyone,” he said.
African Development Bank’s $230 Million Support for Small Businesses
To help small and medium-sized businesses, the African Development Bank (AfDB) has arranged a $230 million trade finance package through Access Bank Plc.
The funding is meant to:
Improve access to foreign exchange
Stabilize trade and business operations
Provide financial support for struggling businesses
The package includes:
$170 million Trade Finance Line of Credit (TFLoC): This will help businesses get the foreign exchange they need for imports.
$60 million Transaction Guarantee (TG): This will protect banks from risks in trade transactions and make business operations smoother.
However, before the funds can be used, the Central Bank of Nigeria (CBN) must approve the project to ensure it follows local foreign exchange rules.
Expected Impact
This financial support is expected to help small businesses recover from economic challenges. It will:
Support business growth
Help women entrepreneurs access funding
Improve the supply of important goods
With better policies and financial support, Nigerian businesses can survive tough economic conditions and continue to grow.