The harsh economic environment led to the closure of about 30 percent of Micro and Small Medium Enterprises (MSMEs) in Nigeria, amounting to about 7.2 million of the country’s estimated 24 million MSMEs, between 2023 and 2024, the Nigerian Economic Summit Group (NESG) has stated.
Chief Economist and Director of Research at NESG, Dr. Segun Omisakin, disclosed this during the launch of the 2025 Private Sector Outlook, while highlighting key economic trends, challenges, and opportunities for businesses navigating the evolving Nigerian economy.
He noted that the development underscored the country’s economic vulnerability, adding that Nigeria also lost an estimated N94 trillion to multinational divestments and business closures 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,” he stated.
Giving an in-depth analysis of the private sector’s performance and economic risks in 2024, Omisakin noted that while foreign exchange availability improved due to policy reforms, the nation’s currency depreciated significantly, with the official exchange rate averaging 1,479.9 Naira to the US dollar in 2024.
According to him, although trade surpluses and increased foreign capital inflows were recorded, fiscal constraints persisted, with public debt rising to N142.3 trillion as of September 2024.
Projecting into 2025, he emphasised the need for businesses “to adapt to economic uncertainties and employ strategic measures for growth and resilience”.
In her opening remarks, NESG Board Director, Mrs. Wonu Adetayo, emphasised the vital role of the private sector in shaping a resilient economy.
According to her, despite structural weaknesses and macroeconomic volatility, Nigeria experienced an economic growth improvement in 2024, driven by reform efforts that enhanced investment levels.
She pointed out that Nigeria’s economy expanded by 3.4% in 2024, the highest growth since 2021, with the number of expanding activity sectors increasing from 32 in 2023 to 38 in 2024.
Adetayo however noted that stagnant productivity and persistent macroeconomic imbalances led to deteriorating living standards and heightened economic distress.
Panelists at the event noted that foreign direct investors prioritise policy stability over the exchange rate itself, emphasising that investors are willing to engage regardless of currency value, as long as policies remain consistent.
On the need for private sector inclusion in policy formulation, the panelists called for stronger collaboration between the public and private sectors, stressing that business 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) must be actively involved in economic decision-making.
They warned against government over-reach into private sector affairs, urging policymakers to recognise business organisations as essential stakeholders in negotiations on trade and investment.
President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dele Oye, who is also the Chairman, Organised Private Sector of Nigeria (OPSN), stated: “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.”
…As AfDB facilitates $230m package for Nigerian SMEs
The African Development Bank (AfDB) is facilitating a $230 million trade finance package to Access Bank Plc to support small and medium-sized enterprises (SMEs) in Nigeria.
The funding is a strategic investment aimed at providing Nigerian SMEs with better access to foreign exchange (forex), supporting trade, and ensuring financial stability.
The $230 million package consists of two key components – $170 million Trade Finance Line of Credit (TFLoC), a three and a half-year loan designed to provide businesses with much-needed forex liquidity, by helping Nigerian SMEs pay for essential imports and keep their operations running smoothly; and $60 million Transaction Guarantee (TG), a three-year guarantee that will protect confirming banks from the risk of non-payment on trade finance transactions.
This will enable Access Bank to offer more trade finance options to businesses without worrying about payment defaults.
The funds will be managed through separate agreements to ensure transparency and accountability: The TFLoC agreement will outline how the funds can be used, repayment conditions, and reporting requirements. It will also include environmental and social responsibility guidelines.
The Issuing Bank agreement for the TG facility will establish the responsibilities of AfDB and Access Bank, and define which transactions qualify for guarantees and how approvals will be granted.
Before funds are disbursed, the Central Bank of Nigeria (CBN) must approve the project, ensuring it complies with local forex regulations.
The funding is expected to bring several benefits to Nigeria’s economy, including: Growth of SMEs; Support for Women Entrepreneurs; and Improved Access to Imports.
