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The Key to Strengthening Nigeria’s Economic Position on a Global Scale: Support for Young and Women Entrepreneurs

The Key to Strengthening Nigeria’s Economic Position on a Global Scale: Support for Young and Women Entrepreneurs

The exploding population, low literacy and low retirement rates all compound unemployment. To address this challenge the Nigerian government needs to enable the shift of young people becoming job creators rather than job seekers.

By Didi Onwu, Managing Editor of the Anzisha Prize

Nigeria’s small-and-medium enterprises (SME) sector and its entrepreneurial ecosystem are often seen as an engine of economic activity integral to driving social change. For example, take the 2022 Anzisha Prize fellow and entrepreneur Eneyi Oshi who, through her innovative enterprise, showcases the immense potential of entrepreneurship in serving the interests of society beyond the economy. With a love for agriculture and a desire to improve food security in Nigeria, Eneyi started Maatalous Nasah in 2019 selling chicken, fish, and eggs. Her agribusiness has since grown to help other farmers in the community to do the same, through an e-commerce platform. Furthermore, she sells farming infrastructure to those looking to grow their own produce in their backyards.

Ambitious ventures such as hers have immense potential to reduce poverty in the country in a tangible way. Our assessment of the business environment, conducted in 2021, shows that while efforts to support youth entrepreneurship have been ongoing for over a decade, there is still inadequate evidence of success in alleviating the challenges facing entrepreneurs in the country. In fact, there seems to be a growing crisis of inaccessibility of funding and investment opportunities for young entrepreneurs coupled with low skills and education rates among potential entrepreneurs.

What emerges strongly, from our analysis, is the pressing need for more efforts to be directed towards promoting entrepreneurship as a sustainable livelihood option among young people. Nigerian youth need more investment in education and training programmes that will equip them, particularly when they are most impressionable (between the ages of 18 and 25) to enter the world of entrepreneurship.

This is because our assessment finds a direct correlation between entrepreneurship and employment creation and the reduction of poverty. In determining the extent to which Very Young Entrepreneurs (ages 15 – 22) contribute to job creation, our analysis found that this group of entrepreneurs is much more engaged in purpose-driven entrepreneurship (i.e. job creation and poverty reduction) than the older generation whose core entrepreneurial purpose is more about creating income for themselves and their households.

Nigeria needs more of these Very Young Entrepreneurs such as Eneyi because they’re hungry, energised and ready to tackle the challenges facing their national economies right now. According to a recent report by the Nigerian National Bureau of Statistics and the Small and Medium Enterprises Development Agency of Nigeria, micro, small and medium-sized enterprises (MSMEs) in the country account for a total of 96.7% of businesses contributing to 46.31% of the nation’s GDP. In terms of the labour force, MSMEs account for around 85% of total industrial employment across all sectors of the economy.

The government needs to intensify efforts to promote and support entrepreneurship as an integral part of economic rejuvenation and recovery. We make this recommendation in the assessment mainly because we have observed that despite the substantial role that entrepreneurship plays in the local economy, the sector has continued to receive very little support, leaving these entrepreneurs to navigate numerous challenges limiting their employment capacity, productivity, and ability to grow and scale. This has also limited the potential and, most importantly, the crucial impact the sector could be making towards the nation’s GDP, and the injection of new and innovative products, solutions, and technologies that could tackle different challenges while creating new markets.

Moreover, entrepreneurship has immense potential to help many young people to become self-sufficient generators of wealth, giving them more control over their financial freedom and helping to improve their standard of living. This is echoed in our analysis conducted in the height of the COVID-19 pandemic.

Unpredictable business environment

Before the pandemic, the entrepreneurs in the country faced everything  from unreliable power supply, poor broadband connectivity,  inadequate infrastructure to limited access to capital and an inconsistent policy and regulatory environment.

The pandemic saw the country experience one of its worst recessions and a GDP decline of 6.1%. And this could only be worsened by the consequent poor policy mechanisms including ban on Twitter, cryptocurrency trading and the closure of land borders. Most small businesses suffered because of these measures.

Entrepreneurs, nevertheless, remained resilient. But that may not be enough. Eneyi’s business was itself not spared. For example, she says that when markets were shut, schools closed and travel limited, they all had to adapt: “We had birds on the farm that kept laying eggs anyway; we had animals that needed to be sold, or else our production costs would continue to rise. As a result, we needed to find a means to distribute these items outside of our usual marketing channels. So we began advertising on WhatsApp. After a few weeks of advertising on this platform and on Instagram, we constructed an eCommerce application to allow more people to locate and place orders while working around doorstep delivery.”

This is how her other business Farmisphere came to be. “We also discovered that other farmers in our neighbourhood were experiencing the same problem and were technologically incapacitated. As a result, we began selling their items as well.”

Turning a challenging landscape into opportunity

Small business owners need to continuously operate at an incredibly fast pace. Driven by the need to innovate and deliver increased value to customers, maintaining a growth momentum often requires them to scale up as quickly and effectively as possible, entrepreneurs require access to the right tools and resources to do so.

Improving access to financial services is one of the most significant ways in which we can create an enabling environment for entrepreneurship as access to financial services promotes growth, reduces poverty, and contributes to the building of sustainable economies. And the need to especially focus on women entrepreneurs as a way of transforming the economy cannot be overstated.

According to the 2021 State of Entrepreneurship in Nigeria Report, while female-led businesses remain highly vulnerable, following the impact of the pandemic, they continue to receive limited support from the government. Through targeted and institutionalised support for women, and young entrepreneurs, we would not only be able to facilitate their growth but also enhance their impact on the economy.

Efforts need to be directed towards ensuring that small businesses and startups in Nigeria can scale effectively. This will strengthen the country’s standing as a leading entrepreneurship hub in Africa.

About Bukola Olanrewaju

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