N94 Trillion Lost as Economic Hardship Forces MSMEs to Close
The Nigerian Economic Summit Group (NESG) has revealed that about 30% of Nigeria’s Micro, Small, and Medium Enterprises (MSMEs)—equivalent to 7.2 million businesses—shut down between 2023 and 2024 due to harsh economic conditions.
This staggering figure highlights the challenges entrepreneurs face in the country’s volatile business environment.
Economic Turmoil Hits Nigerian Businesses Hard
Speaking during the launch of the 2025 Private Sector Outlook, NESG’s Chief Economist, Dr. Segun Omisakin, warned that the Nigerian economy remains highly vulnerable.
He noted that multinational divestments and widespread business closures led to an estimated N94 trillion loss within two years.
“Between 2023 and 2024, Nigeria witnessed massive business closures, leading to an economic loss of N94 trillion.
The shutdown of 30% of MSMEs underscores the economic struggles businesses are facing,” Omisakin stated.
Depreciating Currency and Rising Debt
Despite some improvements in foreign exchange availability due to policy reforms, the naira suffered significant depreciation, averaging ₦1,479.9 per US dollar in 2024.
Public debt also soared to ₦142.3 trillion as of September 2024, adding more pressure to Nigeria’s struggling economy.
Private Sector Urged to Adapt and Innovate
Looking ahead to 2025, Omisakin emphasized that businesses must adapt to economic uncertainties and develop strategies for survival and growth.
NESG Board Director, Mrs. Wonu Adetayo, highlighted the private sector’s vital role in building economic resilience, noting that while economic growth improved in 2024 (rising by 3.4%, the highest since 2021), structural weaknesses continue to impact productivity and living standards.
Panelists at the event stressed the importance of policy stability in attracting foreign investors, stating that businesses prioritize clear and predictable regulations over currency fluctuations.
They also called for stronger collaboration between the public and private sectors to ensure inclusive economic policies.
AfDB Boosts Nigerian SMEs with $230 Million Trade Finance Package
Amid these challenges, the African Development Bank (AfDB) is stepping in with a $230 million trade finance package to support small and medium-sized enterprises (SMEs) in Nigeria.
The funding, facilitated through Access Bank Plc, is expected to provide SMEs with easier access to foreign exchange, stabilize trade, and enhance financial growth.
The package includes:
$170 million Trade Finance Line of Credit (TFLoC) – A loan designed to help SMEs import essential goods and maintain their operations.
$60 million Transaction Guarantee (TG) – A security measure to protect banks from potential non-payment on trade transactions.
The Central Bank of Nigeria (CBN) must approve the project before funds are disbursed, ensuring compliance with forex regulations.
The initiative is expected to stimulate SME growth, support women entrepreneurs, and improve access to essential imports.
A Call for Urgent Economic Reforms
With millions of businesses collapsing and billions in economic losses, experts warn that urgent policy interventions are needed to revive Nigeria’s business sector.
Strengthening the private sector, stabilizing policies, and enhancing access to finance could be the key to reversing the downward trend.
As Nigeria steps into 2025, the question remains: Will the government and private sector work together to save businesses, or will more MSMEs continue to disappear?
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