Nigeria experienced a slowdown in new business formation in 2024 as fewer entrepreneurs launched fresh ventures across the country. According to the 2024 State of Entrepreneurship (SoE) Report by Fate Foundation, the business birth rate slipped to 24% in 2024, a sharp drop from 30% in 2023 and 32% in 2022.
The report revealed that most Nigerians are driven into entrepreneurship by necessity rather than opportunity, with income generation remaining the top motivation.
State-by-State Rankings
Anambra and Ebonyi states emerged as the leading performers in 2024, recording an entrepreneurship index score of 0.77, well above the national average of 0.46.
“Kogi, Kwara, and Oyo followed in third, fourth, and fifth place, respectively,” the report stated. Notably, of the top five states in 2023 — Kano, Kogi, Kaduna, Borno, and Bayelsa — only Kogi retained its spot in 2024.
At the lower end of the rankings, Niger, Cross River, and Zamfara were flagged as the weakest performers. Overall, 20 states recorded declines in performance, while 15 improved their positions. Plateau and Zamfara maintained the same ranking as the previous year.
Female Participation on the Rise
Despite the general slowdown, female entrepreneurship showed growth. Women accounted for 47% of new businesses in 2024, up from 42% in 2023. Bauchi, Niger, and Abia recorded the highest percentages of female-owned startups.
Over the last three years, women’s share of entrepreneurship has steadily increased from 43% in 2021 to 48% in 2024. However, female-led businesses continue to face heightened vulnerability to economic shocks.
The report found that 63% of female-owned firms recorded growth in 2024, compared to 74% in 2023, and slightly lower than the 64.3% for male-owned businesses. States such as Anambra, Ebonyi, and Ogun led in female entrepreneurship growth, driven by new market access, higher demand, and technology adoption. Yet, lack of access to finance remains a key barrier.
Key Challenges for Entrepreneurs
The report highlighted five major obstacles affecting Nigerian entrepreneurs in 2024:
- Limited access to finance
- Poor electricity supply
- Rising insecurity
- Foreign exchange instability
- Weak infrastructure
These issues, particularly FX volatility and insecurity, were identified as the most pressing concerns for businesses in 2024.
Entrepreneurial Optimism and Expansion Plans
Despite these hurdles, optimism remains strong, with 87% of entrepreneurs expressing confidence in future business opportunities, compared to 86% in 2023.
However, expansion plans slowed, as only 68% of entrepreneurs planned to scale operations in 2024, down from 78% in 2023.
Policy Recommendations
The report called on the Nigerian government to:
- Guarantee macroeconomic stability through investment-friendly policies.
- Expand non-oil exports to stabilize FX inflows.
- Establish incubator programmes for women and youth-led businesses.
- Recapitalise development finance institutions for broader funding access.
- Simplify business registration to encourage formalisation.
- Create public-private dialogue platforms to improve state-level policy impact.
