Economic hardship has forced 7.2 Million MSMEs to shut down – NESG

The tough economic climate in Nigeria has led to the closure of about 30% of the country’s Micro, Small, and Medium Enterprises (MSMEs), translating to approximately 7.2 million businesses shutting down between 2023 and 2024.

This was revealed by the Nigerian Economic Summit Group (NESG) during the launch of its 2025 Private Sector Outlook.

Dr. Segun Omisakin, NESG’s Chief Economist and Director of Research, highlighted these figures while discussing key economic trends, challenges, and opportunities for businesses in the evolving Nigerian market. He stressed that the widespread closure of MSMEs reflected the country’s economic fragility, adding that Nigeria suffered an estimated N94 trillion loss due to multinational divestments and business shutdowns during the 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.

Analyzing private sector performance and economic risks in 2024, he noted that while forex supply improved due to policy reforms, the Naira weakened significantly, with the official exchange rate averaging N1,479.9 per US dollar in 2024. He further disclosed that despite increased trade surpluses and foreign capital inflows, Nigeria’s fiscal challenges persisted, as public debt surged to N142.3 trillion by September 2024.

Looking ahead to 2025, Omisakin stressed the importance of businesses adapting to economic uncertainties and adopting strategic measures for resilience and growth.

NESG Board Director, Mrs. Wonu Adetayo, also spoke at the event, emphasizing the critical role of the private sector in economic recovery. She noted that despite structural weaknesses and economic instability, Nigeria saw an improvement in growth, with the economy expanding by 3.4% in 2024—the highest rate since 2021. She further highlighted that the number of expanding business sectors increased from 32 in 2023 to 38 in 2024.

However, Adetayo acknowledged that persistent macroeconomic imbalances and stagnant productivity continued to worsen living conditions for many Nigerians.

Panelists at the event pointed out that foreign investors prioritize policy stability over exchange rates, stating that investors remain willing to engage as long as government policies remain predictable. They also called for stronger public-private sector collaboration, urging associations like the Nigerian Association of Small and Medium Enterprises (NASME), the Nigerian Association of Small-Scale Industrialists (NASSI), and the Nigeria Employers’ Consultative Association (NECA) to be actively involved in economic policymaking.

Speaking on the need for government support rather than interference, President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), Dele Oye, who also chairs the Organised Private Sector of Nigeria (OPSN), warned against excessive government intervention in private sector affairs.

“Government must act as a facilitator, not a competitor, in economic affairs. Business organisations should always be in the room when key negotiations take place to ensure broad-based economic benefits,” Oye stated.