The Nigerian Economic Summit Group (NESG) has revealed that about 30% of Nigeria’s Micro, Small, and Medium Enterprises (MSMEs) have shut down between 2023 and 2024 due to tough economic conditions.
This figure translates to an estimated 7.2 million businesses closing within two years, out of the country’s 24 million registered MSMEs.
The disclosure was made by Dr. Segun Omisakin, NESG’s Chief Economist and Director of Research, during the launch of the 2025 Private Sector Outlook.
Economic Impact of Business Closures
Dr. Omisakin highlighted that Nigeria lost approximately ₦94 trillion due to business shutdowns and multinational companies leaving the country.
“Between 2023 and 2024, business closures and multinational divestments caused an estimated ₦94 trillion economic loss. Additionally, 30% of Nigeria’s MSMEs shut down, showing how vulnerable the economy is,” he said.
While foreign exchange reforms improved dollar availability, the naira continued to lose value, with the official exchange rate averaging ₦1,479.9 per US dollar in 2024.
Although Nigeria’s economy grew by 3.4% in 2024, the fastest expansion since 2021, structural challenges, low productivity, and unstable policies continued to affect businesses and living standards.
Private Sector’s Role in Economic Recovery
Speaking at the event, NESG Board Director, Mrs. Wonu Adetayo, stressed that private sector involvement is key to economic recovery and investment growth, despite ongoing financial instability.
Business organizations like the Nigerian Association of Small and Medium Enterprises (NASME), Nigerian Association of Small-Scale Industrialists (NASSI), and Nigeria Employers’ Consultative Association (NECA) were urged to play a more active role in shaping economic policies.
The President of NACCIMA (Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture), Dele Oye, advised the government to act as a facilitator rather than a competitor in economic affairs.
He also called for the inclusion of business associations in key economic negotiations, ensuring policies support long-term business growth.
AfDB’s $230 Million Trade Finance Package for SMEs
In an effort to support struggling small businesses, the African Development Bank (AfDB) has arranged a $230 million trade finance package through Access Bank Plc.
This funding is aimed at improving foreign exchange access, stabilizing trade, and providing financial support for Nigerian SMEs.
The package includes a $170 million Trade Finance Line of Credit (TFLoC) to provide forex liquidity for businesses importing essential goods and a $60 million Transaction Guarantee (TG) to protect confirming banks from payment risks on trade transactions.
However, before the funds can be released, the Central Bank of Nigeria (CBN) must approve the initiative to ensure it complies with local forex regulations.
The financial support is expected to help SMEs recover, empower women entrepreneurs, and improve Nigeria’s access to essential imports.
Over 7 Million Small Businesses Shut Down in Two Years – NESG
