Nigeria’s start-up ecosystem is under strain as new business formation continues to decline, according to the latest State of Entrepreneurship Report by Fate Foundation. The data reveals that the country’s “business birth rate” fell to 24% in 2024, a sharp drop from 30% in 2023 and 32% in 2022.
Harsh Conditions Stifling Growth
The report attributes the decline to inflation, foreign exchange volatility, poor infrastructure, and insecurity, which have raised the cost of doing business and discouraged would-be entrepreneurs. Nigeria’s entrepreneurial index also slid to 0.46 in 2024, down from 0.52 in 2023 and 0.58 in 2022, further underscoring weakening conditions for enterprise growth.
Women and Youth Defy the Odds
Despite the downward trend, the study highlights a silver lining: women and youth are stepping up as entrepreneurial leaders.
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Female-led businesses increased to 47% in 2024, up from 42% the year before.
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Youth-owned ventures accounted for 44.4% of all new enterprises, with many leaning on digital tools to adapt.
Notably, seven in ten young entrepreneurs reported growth, suggesting that tech adoption and innovation remain key drivers of resilience even in a tough economic climate.
The Way Forward
The report calls on policymakers to stabilize the macroeconomic environment, simplify business registration, and incentivize investment in non-oil exports to revive entrepreneurial momentum. Without urgent reforms, analysts warn, Nigeria risks stalling its ambition to build a globally competitive SME sector.
Yet the rising participation of women and youth offers hope that with the right policy support, the next wave of Nigerian entrepreneurs could emerge stronger, more innovative, and more inclusive.
