NESG Bemoans High Mortality Rate of Small Businesses 

…says 3 out of 10 MSMEs die within two years

The Nigerian Economic Summit Group (NESG) has bemoaned the high mortality rate of businesses in the country, saying no fewer than 30 per cent of Nigeria’s 24 million registered Micro, Small, Medium Enterprises (MSMEs) shut down between 2023 and 2024.

The Chief Economist and Director of Research at NESG, Segun Omisakin, stated this in Lagos at the launch of 2025 Private Sector Outlook: Adapting to Economic Uncertainties for Growth and Resilience’ at the weekend.

Omisakin gave an in-depth analysis of private sector’s performance and economic risks in 2024 in his paper presentation, highlighting the struggles faced by Nigeria’s private sector to include foreign exchange shortages, insecurity, inadequate infrastructure, and limited market access.

He noted that while foreign exchange availability improved due to policy reforms, Nigeria’s currency depreciated significantly, with the official exchange rate averaging N1,479.9 to the U.S. Dollar in 2024.

According to him, trade surpluses and increased foreign capital inflows were recorded, yet fiscal constraints persisted, with public debt rising to N142.3 trillion as of September 2024.

Omisakin further noted that businesses need to adapt to economic uncertainties and employ strategic measures for growth and resilience.

He outlined NESG’s framework of economic stabilisation, consolidation and acceleration, emphasizing the importance of monitoring reform efficacy and implementing policies that enhance private sector competitiveness.

In her own submission, NESG Board Director, Mrs Wonu Adetayo, said that despite structural weaknesses and macroeconomic volatility, Nigeria experienced an economic growth improvement in 2024, driven by reform efforts that enhanced investment levels.

According to her, stagnant productivity and persistent macroeconomic imbalances led to deteriorating living standards and heightened economic distress.

She added that Nigeria’s economy expanded by 3.4 per cent in 2024, the highest growth since 2021, with the number of expanding activity sectors increasing from 32 in 2023 to 38 in 2024.

She highlighted key reforms, such as fuel subsidy removal and exchange rate harmonisation, which contributed to economic stabilisation.

A major concern highlighted by stakeholders at the event was the lack of immediate monetary interventions following the removal of the fuel subsidy, which exacerbated inflationary pressures.

Besides, inconsistent customs regulations and fluctuating exchange rates were also identified as deterrents to investment and operational stability for businesses.

While speaking 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 recognize business organisations as essential stakeholders in negotiations on trade and investment.