Business creation in Nigeria has continued to drop in the last three years, according to a new report by FATE Foundation, a private-sector led non-profit organisation. The 2024 State of Entrepreneurship (SoE) Report, released by the group’s research and policy arm, FATE Institute, revealed that the business birth rate fell to 24 percent in 2024, compared to 30 percent in 2023 and 32 percent in 2022.
The report, which examines the entrepreneurial ecosystem and the performance of Nano, Micro, Small, and Medium Enterprises (NMSMEs), attributed the slowdown to harsh economic conditions. It stated that most new businesses were started out of economic necessity, as Nigerians sought additional sources of income in the face of high inflation, currency depreciation, and rising living costs.
Despite the slowdown, the report highlighted some positive developments. It showed that more women and young Nigerians are entering entrepreneurship. In 2024, 47 percent of new businesses were established by women, up from 42 percent in 2023. The share of female-led businesses has also increased steadily over the last three years, rising from 43 percent in 2021 to 48 percent in 2024.
However, the report noted that female-led businesses continue to face more difficulties than male-led enterprises. About 63 percent of women-owned businesses reported growth in 2024, compared to 74 percent in 2023. The figure was also slightly below the 64.3 percent recorded for male-owned businesses.
The 2024 report also revealed that youth-led businesses made up the largest share of businesses surveyed for the first time in four years, accounting for 44.4 percent. It said young entrepreneurs performed better in areas such as access to finance, job creation, and skills acquisition despite the challenging environment. The report pointed out that young Nigerians are increasingly adopting technology in their businesses, with 72 percent of youth-led firms using tech tools. Among these, 71.4 percent reported growth, while 82.4 percent of those that experienced growth had adopted technology. This, the report noted, shows that youth entrepreneurs are becoming a formidable force in Nigeria’s business ecosystem, displaying ambition, adaptability, and innovation.
On the overall state of entrepreneurship, the report assigned Nigeria an entrepreneurial index of 0.46 out of 1.0 in 2024, which is lower than 0.52 recorded in 2023 and 0.58 in 2022. This indicates a decline in the general health of the business environment.
The report identified the five major challenges facing Nigerian entrepreneurs in 2024 as limited access to finance, poor electricity supply, insecurity, foreign exchange difficulties, and weak infrastructure. These factors, combined with inflation and currency depreciation, continue to weigh heavily on small and medium businesses.
Executive Director of FATE Foundation, Mrs. Adenike Adeyemi, while commenting on the report, said the findings show a slowdown in business growth, fewer jobs created, and lower adoption of new skills. She stressed that persistent issues such as inflation, insecurity, and unstable power supply are holding back entrepreneurs. However, she noted positive trends among women and youth-led businesses, particularly in technology adoption and market participation.
Adeyemi said, “The 2024 survey reveals lower business growth rates, fewer jobs created, lower levels of skills adoption among entrepreneurs, and the persistence of challenges such as local currency depreciation, high inflation, insecurity, and poor power supply. Yet, we note some green shoots, particularly among female and youth-led businesses. Female-led businesses have shown a notable increase in both market participation and growth. At the same time, youth entrepreneurs have become a driving force, leading technology adoption at an impressive rate of 72 percent.”
She recommended that the Federal Government focus on ensuring macroeconomic stability through business-friendly policies that can attract long-term foreign investment and promote non-oil exports. She also urged the government to make business registration more accessible to informal entrepreneurs and create platforms for public-private dialogue to support peer learning and collaboration.
The report concluded that while Nigeria’s entrepreneurial environment remains difficult, the increasing participation of women and young people, along with their embrace of technology, offers hope for a more inclusive and resilient business future if the right policies are put in place.
