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Nevertheless, some ventures have secured success and have at least a few reasons to smile. And newbie entrepreneurs—especially younger people –are continuing to set up more SMEs and startups. The FATE Institute has recently published a report that summarizes the situation with entrepreneurship and doing business in Nigeria. In this article, we’ll run through some of the more interesting (and important) findings from its research.
The State of Entrepreneurship in Nigeria in 2023
The FATE Institute’s report is titled ‘The State of Entrepreneurship in Nigeria’, and is published annually. This year’s report is the third of its kind and is based on a survey of more than 10,000 businesses across the 36 states of Nigeria and the FCT. It scores entrepreneurship in these states (and the country as a whole) by examining five pillars: business performance, skill acquisition, innovation and technology adoption, perception of opportunities, and enabling business environment. National and state performance is scored on a scale of 0 to 1.Interesting Facts about Entrepreneurship in Nigeria in 2023
Here are some of the key facts about entrepreneurship and doing business in Nigeria and Nigeria in 2023.Businesses were Negatively Affected by Multiple Factors
The FATE Institute’s report captures a fact that we’re probably already aware of: businesses—and entrepreneurs in particular – were negatively affected by several issues that emerged in 2023. Nigeria’s entrepreneurship index for the year was 0.52, which is significantly lower than the 0.58 recorded for 2022. The report suggests that this was caused by naira scarcity, fuel scarcity, fuel subsidy removal, and an unstable exchange rate.Kano was the Best State for Entrepreneurship
This year’s rankings had Kano as the clear leader in entrepreneurship. It scored the highest of all states across 3 indicators: business performance, innovation and technology adoption, and enabling business environment. The next four best states for entrepreneurship were Kogi, Kaduna, Borno, and Bayelsa, in that order. The bottom-ranked states were Yobe, Niger, Taraba, Osun, and Zamfara.The Gender Gap in Entrepreneurship is Narrowing
Although a majority of businesses in Nigeria are male-led, available evidence indicates that the gap between the number of male and female-led businesses is shrinking. About 43% of businesses are led by females, up from 39% in 2022. The absolute number of new female businesses shot up 13.3% from the previous year. States such as Ekiti, Lagos, Delta, Osun, Oyo, Cross River, Jigawa, Edo, and Rivers, had more female entrepreneurs than males.Female-led businesses Did Better than their Male Led Counterparts
Female businesses outperformed male-led businesses in 2023, in terms of growth. 73.6% of female-led businesses recorded growth within this period, compared to 70.6% for male-led businesses. According to FATE Institute’s report, the growth of female-run businesses came down to access to new markets and opportunities, as well as increased demand and technology adoption. However, fewer female entrepreneurs (26.9%) were able to access finance from financial institutions compared to males (27.3%).Sign up for the Connect Nigeria daily newsletter
More Young People are Becoming Entrepreneurs
The share of Nigerian entrepreneurs aged 15-29 years increased significantly in the past year, according to FATE Institute’s survey of the entrepreneurial population. About 70% of businesses created in 2023 were founded by them. 89% of businesses were run by persons aged below 40 years, and 42% of the total entrepreneurial population is 29 or younger. FATE Institute attributes this to the limited availability of formal jobs.Over Half of Existing Businesses are Unregistered
53% of businesses say that they are unregistered. That’s up from 51% in 2022. This increase was linked to the emergence of new businesses, many of which are yet to formally register with the relevant authorities. 58% of female-led businesses were unregistered, compared with about 49% of male-led enterprises.Students Make Up the Greatest Portion of Part-Time Entrepreneurs
A growing number of students have to support their education through businesses that they run on a part-time basis. They contribute 43% of the total population of part-time entrepreneurs, more than people in full-time formal employment or part-time employment.One-third of Entrepreneurs Have a Bachelor’s Degree
36% of entrepreneurs have a Bachelor’s degree. This group is the largest of the lot in terms of educational attainment. Approximately 20% have a secondary school certificate as their highest educational qualification; 19% have a Higher National Diploma (HND) and 18% have an Ordinary National Diploma (OND).Most Businesses Plan to Expand Next Year
The typical entrepreneur is constantly seeking ways to grow and expand their business. The State of Entrepreneurship Report suggests that 78% of businesses intend to expand their operations within the next year. But that number is less than the 82% which looked forward to scaling in 2022.Many Entrepreneurs are Still Optimistic about the Future
Nigerian entrepreneurs are quite optimistic people. Despite the challenges they faced in 2023, they’re mostly looking ahead to the future with hope. However, they aren’t as big on tomorrow as they were in the previous year. Their perception of opportunities (one of the pillars rated by the report) fell from 0.08 in 2022 to 0.64 this year.Register to attend the CN Business Mixer
Final Words
This year has been a mixed one for most entrepreneurs. Many would rather anticipate the next than recount their experience these past several months. Whatever the case is, it’ll be interesting to see what the next year brings with it. Featured Image Source: Green Gold AttorneysGot a suggestion? Contact us: editor@connectnigeria.com
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