Nigeria’s challenging economic climate has taken a heavy toll on small businesses, with an estimated 7.2 million Micro, Small, and Medium Enterprises (MSMEs) shutting down between 2023 and 2024, according to the Nigerian Economic Summit Group (NESG). This figure represents roughly 30% of the country’s estimated 24 million MSMEs, highlighting the scale of economic distress faced by entrepreneurs.
Dr. Segun Omisakin, Chief Economist and Director of Research at NESG, revealed these figures during the launch of the 2025 Private Sector Outlook, where he analyzed prevailing economic trends, challenges, and business opportunities in Nigeria. He underscored the fragility of the country’s economic landscape, further noting that multinational divestments and business closures resulted in an estimated N94 trillion in economic losses over the same period.
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Providing deeper insights into the economic risks confronting the private sector, Omisakin acknowledged that while foreign exchange availability improved due to policy interventions, the Naira’s depreciation remained a pressing concern, with the official exchange rate averaging 1,479.9 Naira to the US dollar in 2024. He also pointed out that despite a rise in trade surpluses and foreign capital inflows, fiscal constraints persisted, pushing public debt to N142.3 trillion by September 2024.
Looking ahead to 2025, Omisakin emphasized the need for businesses to adopt adaptive strategies in response to economic uncertainties. He urged enterprises to explore resilience-building measures that would position them for sustainable growth despite macroeconomic volatility.
In her remarks, NESG Board Director, Mrs. Wonu Adetayo, stressed the crucial role of the private sector in fostering economic stability. She acknowledged that while Nigeria’s economic growth improved in 2024—expanding by 3.4%, the highest rate since 2021—structural weaknesses and persistent macroeconomic imbalances continued to erode living standards.
Adetayo highlighted the expansion of economic activity, noting an increase in the number of growing sectors from 32 in 2023 to 38 in 2024. However, she cautioned that stagnant productivity and economic distress posed significant hurdles to long-term prosperity.
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Panelists at the event echoed concerns about Nigeria’s economic policies, stressing that foreign direct investors prioritize policy stability over exchange rate fluctuations. They emphasized that investors remain willing to engage in the Nigerian market, provided there is consistency in government policies.
A recurring theme in discussions was the necessity of private sector involvement in policymaking. Business associations such as 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 identified as critical stakeholders whose voices must be incorporated into economic decision-making processes.
Dele Oye, President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) and Chairman of the Organised Private Sector of Nigeria (OPSN), emphasized that the government should act as a facilitator rather than a competitor in economic affairs. “Business organizations must be actively engaged in policy discussions to ensure that decisions drive broad-based economic benefits,” he stated.
AfDB Facilitates $230 Million Trade Finance Support for Nigerian SMEs
In a move to bolster small and medium-sized enterprises (SMEs) in Nigeria, the African Development Bank (AfDB) has structured a $230 million trade finance package for Access Bank Plc. The funding is designed to enhance access to foreign exchange (forex), support trade activities, and stabilize financial conditions for Nigerian businesses.
The financing package consists of two key components: a $170 million Trade Finance Line of Credit (TFLoC) and a $60 million Transaction Guarantee (TG). The TFLoC, structured as a three-and-a-half-year loan, aims to provide forex liquidity, enabling SMEs to secure essential imports and maintain operational stability. The TG, spanning three years, offers a protective mechanism for confirming banks against non-payment risks in trade finance transactions, thereby enabling Access Bank to extend more trade finance options to businesses.
To ensure transparency and accountability, the funds will be governed by separate agreements detailing utilization, repayment structures, and environmental and social responsibility guidelines. Before disbursement, the Central Bank of Nigeria (CBN) must approve the project, ensuring compliance with local forex regulations.
The financing is expected to deliver multiple economic benefits, including SME growth, increased support for women entrepreneurs, and improved access to essential imports, thereby reinforcing Nigeria’s economic resilience amid ongoing fiscal challenges.
