More Nigerians Abandon Entrepreneurship Dreams, Return to Job Market As Economy Bites Hard
- According to a new report by the NBS, the number of small-scale industrialists and businesses is on the decline
- Various factors have contributed to this decline, including the policies implemented by the CBN
- Additionally, the environment has caused Nigerians who dream of becoming the next Dangote to choose to return to the job market
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
An increasing number of Nigerians are abandoning their entrepreneurial pursuits and returning to the job market.
According to the 2023 social statistics report by the National Bureau of Statistics (NBS), the number of individuals operating as small-scale industrialists across various economic sectors stood at 170,098 in 2022.
Source: Getty Images
This represents a 45% decline from the 246,200 recorded in 2020 and a decrease from 213,402 in 2021.
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The new data also indicates that 76,102 Nigerians decided to end their entrepreneurial pursuits within two years.
Other sectors' decline breakdown
Here is a sectoral analysis of SMEs' decline.
- Education Sector
2020: 56,321
2021: 49,749
2022: 39,876
- Real Estate Sector
2020: 19,956
2021: 12,720
2022: 8,313
- Agriculture Sector
2020: 39,109
2021: 36,431
2022: 36,348
- Information and Communication Technology (ICT) Sector
2020: 33,842
2021: 28,816
2022: 23,101
- Manufacturing Sector
2020: 27,723
2021: 20,736
2022: 17,450
- Mining Sector
2020: 24,852
2021: 22,721
2022: 22,522
- Wholesale and Retail Trade Sector
2020: 44,397
2021: 42,229
2022: 22,488
Reasons for SMEs decline
Although NBS did not clearly state the reasons many SMEs are closing shops, it is not difficult to understand why, given the economic challenges exacerbating Nigerians' purchasing power.
The Central Bank of Nigeria's tightening monetary policies, rising inflation, depreciating naira, and production costs have created a challenging environment for small and medium-sized enterprises (SMEs).
Muda Yusuf Muda, the CEO of the Centre for the Promotion of Private Enterprise (CPPE), recently raised concerns about the CBN interest rate.
His words:
"My prayer was for the MPC to pause the rate hikes for a number of reasons. First, previous rate hikes have been quite aggressive, hurting output and real sector investments.
"Most economic operators with credit exposures to the banks have not recovered from previous hikes. Interest rates were already around 30% threshold."
FG shares N200bn to small business owners
Earlier, Legit.ng reported that the Nigerian government announced plan to disburse loans to micro, small, and medium enterprises (MSMEs) under the N200 billion Presidential Intervention Fund initiative.
The minister of industry, trade and investment, Doris Uzoka-Anite, said the decision was taken following the success of the ongoing disbursements targeted at supporting one million nano businesses nationwide.
Proofreading by James Ojo Adakole, journalist and copy editor at Legit.ng.
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Source: Legit.ng
