Nigeria’s Business Birth Rate Fell to 24% in 2024, Raising Questions for 2025
Nigeria’s entrepreneurial momentum slowed significantly in 2024, according to the latest State of Entrepreneurship (SoE) Report by Fate Foundation. The report reveals that the country’s business birth rate dropped to 24% in 2024, down from 30% in 2023 and 32% in 2022.
The survey, which captured insights from over 10,500 small and medium-sized enterprises (SMEs) across all 36 states and the Federal Capital Territory, highlights a business landscape facing multiple headwinds. Rising inflation, currency volatility, weak infrastructure, and persistent insecurity are among the main factors constraining new business formation. These challenges collectively made 2024 the slowest year for new business creation in three years.
Gender and Regional Trends
Despite the slowdown, not all indicators were negative. Female entrepreneurs accounted for 47% of all new businesses in 2024, a noticeable increase from 42% in 2023. This suggests a gradual shift toward greater gender inclusion in Nigeria’s entrepreneurial ecosystem.
Regionally, the report notes significant variation in business activity. States such as Anambra and Ebonyi performed above the national average, reflecting stronger entrepreneurial ecosystems in certain regions. Conversely, states grappling with high insecurity, poor infrastructure, or economic instability recorded lower rates of business creation.
Entrepreneurial Optimism vs. Expansion Plans
While fewer businesses were started in 2024, optimism among entrepreneurs remained high. 87% of respondents indicated confidence in business opportunities for the year ahead. Yet, the desire to expand slowed: only 68% of businesses reported plans for growth in 2024, down from 78% in 2023. This gap suggests that while entrepreneurs remain hopeful, structural challenges and economic uncertainty are limiting concrete growth actions.
Implications for 2025
The downward trend in new business creation raises important questions for 2025. If macroeconomic conditions, such as high inflation, foreign exchange issues, and poor access to finance, persist, Nigeria could see continued suppression of start-up activity. Entrepreneurs may need to rely more on innovation, digital adoption, and alternative funding sources to sustain new ventures.
The rise of female entrepreneurs offers a potential bright spot. Increased gender participation could help diversify the business landscape and inject new perspectives into sectors traditionally dominated by men. However, achieving broader recovery will require targeted support, policy intervention, and improved infrastructure.
Looking Ahead
Nigeria’s business birth rate decline in 2024 illustrates that opportunity alone is not enough. Structural challenges continue to shape the nation’s entrepreneurial trajectory. While optimism remains high among entrepreneurs, translating this sentiment into actual business creation will be the critical test for 2025.
Policymakers, investors, and development organizations will need to pay close attention. The health of Nigeria’s entrepreneurial ecosystem is a key indicator of economic resilience, job creation, and long-term growth prospects. For now, the 24% business birth rate is a reminder that entrepreneurship in Nigeria is operating in a difficult, high-stakes environment.
