Nigeria’s MSMEs face critical growth constraints despite economic importance

Micro, small, and medium-sized enterprises (MSMEs) are fundamental to Nigeria’s economy, accounting for 96.9% of businesses, 87.9% of employment, and 46.32% of the country's gross domestic product. Despite their importance for job creation and innovation, the sector faces significant operational hurdles.

A 2024 MSME survey by PwC Nigeria, which included 557 operators across 29 states, identified inadequate access to finance, unreliable electricity, and multiple taxation as primary constraints to growth. Additionally, 69% of surveyed businesses reported they had not received government grants in the previous 24 months.

Entrepreneurs are currently struggling with high input costs, exchange rate volatility, and infrastructure limitations. Electricity shortages and rising fuel costs further strain finances, often forcing businesses to use working capital for basic operations rather than expansion. While many SMEs are becoming increasingly digital, issues such as informal bookkeeping and fragmented payment systems continue to hinder their ability to secure credit and sustain growth.