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Accelerating productive MSMEs: The much-needed catalyst for Nigeria’s socio-economic recovery

Nigeria’s recent national growth plan and the new government’s New Hope Agenda highlight the opportunities that Micro, Small, and Medium Enterprises (MSMEs) create for the achievement of development objectives. As we look towards 2024, our belief at FATE Foundation is that Nigeria’s MSMEs can become the main drivers of economic recovery and inclusive growth only if there is a strong emphasis on enabling productive enterprises.

2023 was a challenging year for Nigeria’s MSMEs. Despite the “green shoots” Nigeria experienced following the re-opening of the economy in 2021-22 after the pandemic, economic development in late 2022 and 2023 was negatively impacted by the flawed implementation of the Naira Redesign Policy, the impact of fuel subsidy removal which increased operational costs, and the slowdown of economic activity due to the national and state-level elections.

In our 2023 State of Entrepreneurship Report which provides a reference point for policymakers to make data-driven decisions to promote entrepreneurship in Nigeria, we noted a deterioration in entrepreneurial performance with over 90% of entrepreneurs surveyed indicating that the fuel subsidy removal had and continues to have a negative impact on their businesses.

While they contribute over 90% to entrepreneurial activity in Nigeria and make up 87.9% of the country’s labour force, over 90% of MSMEs are micro-enterprises with suboptimal productivity and low growth. When we apply a youth and gender lens, however, we do see some very bright spots.


The State of Entrepreneurship survey defines the five pillars of entrepreneurship as perception of opportunities, innovation & digital technology adoption, business performance, skill acquisition, and an enabling business environment. Businesses are asked to score their perception of each pillar. Four of the five pillars declined relative to last year, demonstrating that business optimism and opportunity has fallen since 2022.

Young people are the fastest growing age segment and those between the ages of 15 to 29 account for 42% of MSME entrepreneurs. With high unemployment and underemployment rates being a challenge in Nigeria for that age category, it is encouraging to see more young people take on the opportunity of building their own economic pathways and creating a job for themselves through entrepreneurship. With business growth being one of our strong indicators of entrepreneurial
performance, Women entrepreneurs—who make up 43% of MSME employees— showed better productivity output as they outperformed their male counterparts within that indicator level17.

In charting the pathway for a better Nigeria in 2024, the following are key policy priorities to stimulate the entrepreneurial ecosystem and enable inclusive and broad-based growth for MSMEs.

  1. Changing measurement indicators for MSME investments to be age and gender disaggregated and reflect socio-economic impact e.g., decent jobs created, revenue growth, and ability to transition across segments (from micro to small or medium levels).
  2. Removing regulatory bottlenecks and harmonizing multiple taxation to galvanize business startup, growth and sustainability. Digitizing required regulatory processes and procedures and creating virtual and physical one-stop shops at Local Government levels (Nigeria has 774 LGAs) can enable this at scale.
  3. Accelerating the dual transition of youth and women led MSMEs (digital and green) to enhance their pathways to growth and improve their ability to attain entrepreneurial success.
  4. Domesticating the African Continental Free Trade Area agreement to improve Nigeria’s MSME competitiveness (currently at 47%) and fast track their participation in regional and global trade.

Nigeria’s small and growing businesses need to be more productive in order to contribute effectively to the growth and development of the country. Support for MSMEs is critical for Nigeria to return.

by Adenike Adeyemi, FATE Foundation
Adenike Adeyemi contributed this article on Foresight Africa Report on page 73-75. Click this link for the full report.

About Adenike Adeyemi:

Adenike Adeyemi is an expert in social entrepreneurship, institutional transformation, non-profit sustainability, philanthropy and corporate governance. Her 20-year experience includes working in the private, public and development sectors to develop, fund and implement innovative programs and high impact policies for MSMEs and young people.

She is the Chief Executive Officer for FATE Foundation, Nigeria’s foremost business incubator which was founded in 2000 by Mr. Fola Adeola (founder, Guaranty Trust Bank). FATE Foundation has connected over 193,000 aspiring and emerging entrepreneurs with capacity building, advisory services, mentoring and financing to start, grow and scale their businesses.

Under her leadership, she established the FATE Institute as the thought leader in Nigeria’s MSMEs and the entrepreneurship ecosystem producing 13 research reports including the Annual State of Entrepreneurship in Nigeria Report. She has led the development and expansion of the FATE School of Entrepreneurship’s business incubation and accelerator programs to 27 states and published 9 books for Nigerian entrepreneurs. She also oversees the FATE Giving program which raised, disbursed and closed a $1,000,000 Fund for the FATE Philanthropy Coalition for COVID-19 Support Fund in 2020.

She has a Masters of Public Administration and a Masters of Arts in Diplomacy and International Relations from Seton Hall University (2005). She also obtained a Bachelor of Arts in Linguistics from the University of Ibadan (2001). She is also a 2020 Eisenhower Global Women Leaders Fellow.

Lynn Brown
Lynn Brown
Lynn is a content marketer that focuses on brand storytelling through digital platforms. Skilled in a background of web development, search engine optimization and content production, Lynn is excited to utilize over 10 years’ experience in digital marketing to help grow the ecosystems that support Africa’s very young entrepreneurs to ensure their success.

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