ABUJA, Nigeria — About 30 percent of Nigeria’s Micro, Small, and Medium Enterprises (MSMEs) shut down between 2023 and 2024 due to severe economic challenges, according to the Nigerian Economic Summit Group (NESG).
The closures, affecting approximately 7.2 million of the nation’s estimated 24 million MSMEs, highlight the vulnerability of Africa’s largest economy amidst mounting fiscal pressures.
The disclosure was made by Dr. Segun Omisakin, Chief Economist and Director of Research at NESG, during the launch of the 2025 Private Sector Outlook.
Omisakin detailed the economic setbacks, emphasizing that multinational divestments and business closures led to a staggering economic loss of about N94 trillion during the same period.
“Between 2023 and 2024, multinational divestments and business closures led to an estimated 94 trillion Naira economic loss. Additionally, 30% of Nigeria’s 24 million registered MSMEs shut down during this period, underscoring the country’s economic vulnerability,” Omisakin stated.
Despite policy reforms aimed at improving foreign exchange availability, the Naira depreciated significantly, with the official exchange rate averaging 1,479.9 Naira to the US dollar in 2024.
Omisakin noted that while trade surpluses and increased foreign capital inflows were recorded, fiscal constraints remained a substantial challenge, with public debt soaring to N142.3 trillion as of September 2024.
The NESG report outlined a mixed economic performance in 2024, where policy reforms boosted investment levels but failed to shield small businesses from the harsh economic environment. Inflation, high borrowing costs, and foreign exchange volatility were cited as key factors undermining business survival.
Addressing the challenges, Omisakin urged businesses to adopt strategic measures for resilience and growth in 2025.
“Adapting to economic uncertainties through strategic planning is essential for businesses to survive and thrive in the evolving economic landscape,” he said.
In her opening remarks, NESG Board Director Mrs. Wonu Adetayo highlighted the indispensable role of the private sector in fostering economic resilience.
Despite structural weaknesses, she noted that Nigeria experienced modest economic growth in 2024, attributed to reform efforts aimed at enhancing investment levels.
Economists warn that unless fiscal policies are recalibrated to support small businesses and curb rising debt levels, the trend of MSME closures could persist, further exacerbating unemployment and poverty rates in the country.
The NESG’s outlook for 2025 calls for enhanced private-sector collaboration and targeted policy interventions to stabilize the economy and restore investor confidence.
As Nigeria navigates these economic headwinds, the survival of its MSMEs, which account for over 80 percent of the country’s workforce, remains a critical concern for policymakers and business leaders alike.
