The harsh economic climate in Nigeria has forced the closure of approximately 30 per cent of Micro, Small, and Medium Enterprises (MSMEs), translating to about 7.2 million businesses out of the estimated 24 million operating in the country between 2023 and 2024.

This revelation was made by the Chief Economist and Director of Research at the Nigerian Economic Summit Group (NESG), Dr Segun Omisakin, during the launch of the 2025 Private Sector Outlook. He highlighted key economic trends, challenges, and opportunities confronting businesses as they navigate Nigeria’s evolving economic landscape.

Omisakin underscored the country’s economic vulnerability, disclosing that Nigeria lost an estimated N94 trillion to multinational divestments and business closures within the period under review.

“Between 2023 and 2024, multinational divestments and business closures led to an estimated N94 trillion economic loss. Additionally, 30 per cent of Nigeria’s 24 million registered MSMEs shut down during this period, underscoring the country’s economic vulnerability,” he stated.

Giving a detailed analysis of the private sector’s performance and economic risks in 2024, Omisakin noted that while foreign exchange availability improved due to policy reforms, the naira suffered significant depreciation, with the official exchange rate averaging N1,479.9 to the US dollar in 2024.

He added that despite trade surpluses and increased foreign capital inflows, fiscal constraints persisted, with public debt rising to N142.3 trillion as of September 2024.

Projecting into 2025, he stressed the need for businesses to adopt strategic measures to navigate economic uncertainties and foster growth and resilience.

In her opening remarks, NESG Board Director, Mrs Wonu Adetayo, emphasised the critical role of the private sector in shaping a resilient economy.

According to her, despite structural weaknesses and macroeconomic volatility, Nigeria recorded an improvement in economic growth in 2024, driven by reform initiatives that boosted investment levels.

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

However, Adetayo pointed out that stagnant productivity and persistent macroeconomic imbalances resulted in deteriorating living standards and heightened economic distress.

Meanwhile, panelists at the event observed that foreign direct investors prioritise policy stability over exchange rate fluctuations, stating that investors are willing to engage regardless of currency value, provided there is policy consistency.

On the need for private sector inclusion in policy formulation, the panelists called for stronger collaboration between the public and private sectors. They stressed that business associations such as 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 also cautioned against excessive government interference in private sector affairs, urging policymakers to recognise business organisations as key stakeholders in trade and investment negotiations.

President of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) and Chairman of the Organised Private Sector of Nigeria (OPSN), Dele Oye, said:

“The government must act as a facilitator, not a competitor, in economic affairs. Business organisations should always be at the table when key negotiations take place to ensure broad-based economic benefits.”

In a strategic move to boost small and medium-sized enterprises (SMEs) in Nigeria, the African Development Bank (AfDB) is facilitating a $230 million trade finance package to Access Bank Plc.

The funding aims to provide Nigerian SMEs with improved access to foreign exchange (forex), support trade, and enhance financial stability.

The package comprises two key components: a $170 million Trade Finance Line of Credit (TFLoC), which is a three-and-a-half-year loan designed to inject forex liquidity into SMEs, enabling them to pay for essential imports and sustain operations; and a $60 million Transaction Guarantee (TG), a three-year facility that will shield confirming banks from the risk of non-payment in trade finance transactions.

This initiative will enable Access Bank to offer expanded trade finance options to businesses without the fear of payment defaults.

The funds will be managed through separate agreements to ensure transparency and accountability. The TFLoC agreement will define fund usage, repayment conditions, and reporting requirements, including environmental and social responsibility guidelines.

Similarly, the Issuing Bank agreement for the TG facility will outline the roles of AfDB and Access Bank, specifying eligible transactions for guarantees and approval processes.

However, before disbursement, the Central Bank of Nigeria (CBN) must approve the project to ensure compliance with local forex regulations.