The National Entrepreneurship Research Institute (NERI) has published its highly anticipated 2024 National Enterprise Trends Report, offering a data-rich lens into the persistent and emerging challenges confronting Nigerian startups. The report, which surveyed over 2,000 MSMEs across 24 states, presents a sobering yet action-oriented picture of what entrepreneurs face, and where interventions are most urgently needed.
According to the report, 68% of surveyed businesses identified inadequate infrastructure, particularly poor electricity, unreliable broadband, and transportation bottlenecks, as their greatest operational burden. Entrepreneurs operating in peri-urban and rural areas were disproportionately affected, with many noting that logistics costs often surpassed their profit margins.
Coming in a close second was the issue of early-stage capital. Over 54% of respondents said they had either been denied a loan or had never attempted to access one due to perceived complexities, high collateral demands, or lack of knowledge on available funding channels. Notably, a significant portion of women-led startups flagged credit inaccessibility as a double barrier, citing both systemic financial gatekeeping and gender biases.
The third most cited concern was the limited adoption of digital tools. While Nigeria has a booming fintech sector and a growing e-commerce base, the report found that many small businesses outside major cities still struggle with basic digital onboarding, from setting up websites and managing online payments to running targeted ads.
More than 40% of rural entrepreneurs surveyed admitted to lacking the skills or mentorship needed to adopt digital platforms, despite acknowledging their value. NERI experts argue that this points to a need for localized digital literacy programs, especially ones tailored for non-tech enterprises such as retail, food production, crafts, and informal services.
The report also underscores the burden of inconsistent policies and regulatory red tape, particularly for businesses attempting to scale. Entrepreneurs mentioned unpredictable taxation regimes, delays in business registration, and conflicting state-federal directives as core barriers.
One respondent in Kano noted: “You pay one fee to register at the national level, another to operate in the state, and yet another to move goods through local councils. It’s discouraging for small players.”
In light of the findings, the report proposes a multi-dimensional strategy to address these hurdles:
- Infrastructure Investment: Prioritize public-private partnerships for off-grid power, logistics hubs, and digital infrastructure in high-potential SME zones.
- Capital Access Innovation: Simplify application processes for federal loan schemes, encourage collateral-free lending for early-stage businesses, and deploy gender-inclusive credit instruments.
- Digital Inclusion Programs: Establish regional digital literacy labs focused on upskilling MSMEs, especially in underrepresented sectors and regions.
- Policy Harmonization: Facilitate inter-agency coordination to streamline business registration, taxation, and licensing procedures.
To ensure the findings lead to action, NERI has initiated engagements with relevant committees in the National Assembly, as well as with state SME development agencies and donor partners. The Institute is also organizing policy dialogues in Lagos, Kano, and Port Harcourt where entrepreneurs and regulators will explore how to co-implement the recommendations.
This report is more than data, it’s a blueprint. The barriers have names, faces, and locations. Now it’s time to respond with targeted, data-informed solutions that uplift our entrepreneurs.”
