MSMEs Small Business Statistics in Nigeria (2024 Detailed Overview)

Micro, Small, and Medium Enterprises (MSMEs) remains the backbone of Nigeria’s economy. MSMEs have a key role in employment creation, innovation, and economic progress. Understanding MSMEs’ small business statistics in Nigeria is important for entrepreneurs, policymakers, and anybody interested in the country’s economic future.

This post, MSMEs Small Business Statistics in Nigeria (2024 Detailed Overview) will present a detailed overview of MSMEs in Nigeria 2024 based on the most recent available data and insights. We will go into key statistics, examine obstacles and opportunities, and consider government activities’ role in promoting this critical sector.

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What Is The Number Of SMEs In Nigeria?

As of December 2017, the total number of micro, small, and medium enterprises (MSMEs) was 41,543,028, with micro-enterprises (MEs) accounting for 99.8 % and small and medium enterprises (SMEs) for 0.2 %, according to data obtained from the National Survey of Micro, Small, and Medium Enterprises (MSMEs) 2017 conducted by the National Bureau of Statistics (NBS).

Only three states—Katsina (36.4% increase), Rivers (21.7% increase), and Kaduna (18.1% increase)—saw notable gains in enterprise numbers despite Lagos States having the highest numbers across all classifications of small businesses.

The same data from the National Bureau of Statistics (NBS) indicates that the five most important economic sectors are as follows: wholesale and retail commerce (42.3% of the total), agriculture (20.9 %), other services (13.1 %), manufacturing (9.0%), and accommodation and food services (5.7 %). Approximately 91.0% of all micro, small, and medium-sized enterprises (MSMEs) are in this category.

What Percentage Of Small Businesses Are In Nigeria?

Monie Point’s research indicates that small and medium-sized enterprises (SMEs) constitute 96% of businesses and 84% of employment in Nigeria.

According to the same data from Monie Point, as of December 2021, a minimum of 39,654,385 micro, small, and medium companies (MSMEs) were operating in Nigeria.

In 2020, the agricultural and wholesale or retail trade sectors accounted for Nigeria’s most informal micro enterprises (MEs).

During that particular year, the number of wholesale MEs reached roughly 12.8 million, while the count for the agriculture sector reached approximately 14.8 million.

What Is The Total Number Of SMEs?

As of December 2020, at least 39,654,385 micro, small, and medium companies (MSMEs) were operating in Nigeria. This is a decline of 4.5% compared to the 41,543,028 million MSMEs operational in 2017.

YEAR	TOTAL NUMBER OF SMES
2017	41,543,028
2020	39,654,385

Data source: NBS

What Is The Value Of SMEs In Nigeria’s Economy?

Medium-sized enterprises (SMEs) have become the main engines of economic growth in the nation, marking a significant shift in recent times. Because of their tremendous contributions to GDP and employment, these SMEs play a crucial role in Nigeria’s economy.

Small and medium-sized businesses in Nigeria are responsible for over 50% of the country’s industrial jobs and almost 48% of GDP, according to SMEDAN, the Nigerian Small and Medium Enterprises Development Agency.

Job creation, economic diversity, innovation, entrepreneurship, local economic development, and eradicating poverty are just a few of the many ways SMEs contribute.

What Are The Challenges Faced By SMEs In Nigeria?

What we call a “Nigerian Factor” are the obstacles that small and medium-sized businesses in Nigeria face when trying to grow and succeed in the country’s business climate.

Let us look at these problems and discuss what could be done to help small businesses and make Nigeria a great place to start a business.

Access to Finance:

One big problem for many MSMEs is getting loans and securing capital. Banks often see them as high-risk customers.

The World Bank’s Enterprise Surveys for Nigeria regularly show that getting access to finance is one of the biggest problems for businesses.

According to a 2019 study, 48% of Nigerian businesses said getting money was a big problem.

Even though there are many banks in the country, small and medium-sized businesses often have to fund themselves for some reason.

These include strict requirements for collateral, excessively high interest rates, and not having a credit background, all of which make it harder for them to get loans.

Limited Infrastructure

Some factors that can impede the expansion of SMEs in Nigeria include an inadequate power supply, insufficient transportation networks, and limited access to necessary businesses.

These difficulties are repeatedly highlighted in the World Bank’s Doing Business report. With 171 out of 190 nations ranking in the “Getting Electricity” category for 2021, Nigeria has a problem getting reliable power.

Skills Gap:

The absence of critical skills among MSME owners and employees in Nigeria hinders their long-term success.

Two ways this skills  gap manifests are:

Management Skills: Many MSME entrepreneurs lack budgeting, bookkeeping, and financial planning abilities, which hinders spending tracking, funding, and company decisions.

• Marketing and Sales: MSMEs struggle to reach their target audience and maximize sales due to a lack of marketing and sales competence.
• Human Resource Management: Poor recruitment, training, and performance evaluation can demotivate workers and lower production.

Technical Know-how:

• Industry-Specific Skills: Fashion and manufacturing MSMEs may need tailoring or welding abilities.
• Digital Literacy: MSMEs can struggle to function and contact clients online without basic computer skills and digital tool expertise.
• Innovation and Problem-Solving: Business success depends on the capacity to adapt to changing market conditions, identify issues, and create new solutions.

Unstable exchange rates:

The rate unification or flexible rate policies that Nigeria recently implemented have greatly affected medium-sized enterprises (SMEs), especially since the country relies so much on imports.

A study published in the International Journal of Economics, Commerce, and Management (IJECM) highlights the importance of government support in helping small and medium-sized enterprises (SMEs) manage currency risks.

By offering access to hedging tools and introducing financial education programs, SMEs can enhance their ability to navigate through changes in exchange.

Market Competition:

Market competitiveness is a double-edged sword for micro, small, and medium-sized enterprises (MSMEs) in Nigeria. Even though it encourages technological advancement and keeps firms on their toes, it also poses substantial challenges.

Lack of Business Support Services:

It is strongly suggested that the government create an environment that helps small and medium-sized businesses (SMEs) effectively deal with the problem of insufficient business support services.

One way to do this is to set up business development centres and startup places nationwide.

These centres would be knowledge hubs that would give small businesses access to important tools like market data, mentoring, and training programs.

Setting up these centres is also meant to help small businesses in the country grow, stay in business, and succeed.

Difficulty in registering and getting licenses:

Registering and acquiring licenses for small and medium-sized enterprises (SMEs) can be difficult and time-consuming.

This can discourage people from considering starting their businesses and can result in a sizeable component of the informal economy.

How Many SMEs Are In Lagos?

A recent statement from the Lagos Ministry for Commerce, industry, and Cooperatives, which was made public by the CABLE, says there are 4,224,324 micro-businesses and over 11,663 small and medium-sized businesses (SMEs) in the state.

Lagos state, Nigeria’s economic centre, is home to a large concentration of SMEs, including micro and nano enterprises.

More SMEs, micro, and nanobusinesses are found in this state than in any other in Nigeria. Why is that the case?

The United Nations (UN) estimates Lagos’ population to be at 15 million, and given the volume of economic activity and people, it seems like a country inside a country.

Small businesses in Lagos can make a big difference in the growth of the non-oil industry, the creation of jobs, and the development of long-term entrepreneurship.

It could be argued that small businesses make up more than 90% of private firms in the state and create more than 50% of all jobs.

Number of SMEs in Abuja

A study by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) in December 2010 found 272,579 micro-enterprises in Abuja, which had the fewest among the three states investigated.

Lagos state has the highest number of micro-enterprises, which is 880,805.

Followed by Kano state, which has 872,552 micro-enterprises.

According to the information gathered from Kingmakers 2020’s ranking of states for small and medium-sized enterprises (SMEs), Abuja came in at number 27 after having 2,825 SMEs that employed 90,649 people.

Number Of SMEs In The 36 States In Nigeria

Businesses are considered small if their total assets are between ₦10 million and 100 million naira, excluding land and buildings and if they employ between 10 and 49.

Regarding total assets (not including land and buildings), medium-sized businesses have a workforce of 50 to 199 employees and total assets above 50 million naira but below 1 billion naira.

Below is the list of 36 states in Nigeria and the number of SMEs they have as of 2020

S/N	STATE	NO. OF SMEs
1	Yobe	102
2	Bayelsa	300
3	Borno	538
4	Adamawa	734
5	Kebbi	815
6	Sokoto	852
7	Gombe	904
8	Ekiti	928
9	Taraba	930
10	Kogi	1,027
11	Zamfara	1,236
12	Katsina	1,367
13	Kwara	1,416
14	Enugu	1,432
15	Cross River	1,456
16	Anambra	1,504
17	Delta	1,524
18	Plateau	1,574
19	Rivers	1,658
20	Benue	1,811
21	Akwa Ibom	1,887
22	Imo	2,020
23	Niger	2,121
24	Bauchi	2,241
25	Abia	2,342
26	Ondo	2,363
27	Jigawa	2,370
28	Kano	2,441
29	Ogun	2,465
30	Kaduna	2,650
31	Edo	2,677
32	Abuja FCT	2,825
33	Osun	3,007
34	Oyo	6,131
35	Lagos	8,396

DATA SOURCE:  NBS

Top MSMEs Statistics in Nigeria

• SMEDAN says there were 17,284,671 businesses as of December 2010: 17,261,753 micro-enterprises, 21,264 small enterprises, and 1,654 medium enterprises.
• As of December 2021, a staggering 39,654,385 micro, small and medium enterprises (MSMEs) were operating in Nigeria, according to data from Monie Point.
• Micro enterprises typically had an initial startup capital of less than fifty thousand Naira, while small and medium enterprises usually had an initial capital of less than ten million Naira.
• In 2010, Lagos state had the highest number of small and medium enterprises, totaling 4,535, while Osun state had the lowest number, with only 100.
• In Nigeria, small and medium-sized enterprises significantly contribute 48% to the national GDP.
• According to research, more than 50% of small and medium-sized enterprises (SMEs) fail during their first year of operation.
• To be more exact, the research demonstrates that more than 95% of small and medium-sized enterprises (SMEs) fail during their first five years of operation.
• Small and medium-sized enterprises make up a whopping 96% of businesses and contribute to 84% of employment.
• In December 2010, the total number of individuals employed by the MSME sector was 32,414,884.
• Female entrepreneurs comprise 42.1% of microenterprises’ ownership structure, compared to 13.57% in small and medium enterprises.
• No insurance coverage covers most micro, small, and medium-sized enterprises (MSMEs).
• More than 70% of business owners do not own patent rights; as a result, their intellectual property is not protected.
• When it comes to the status of ownership, sole proprietorship was the most common, accounting for 97.1 %, followed by partnerships, which accounted for 2.2 %.
• For small businesses, social media is one of the best ways to reach their ideal customers. One of the most common things people do online is use social media. More than 4.26 billion people used social media around the world in 2021. That number is expected to rise to almost 6 billion by 2027 according to Monie Point.

Data Source:  SMEDAN

What Sector Of The Economy Do MSMEs Thrive?

Nigeria’s MSME scene is varied, with companies in several industries. The primary industries are still trade and commerce; some micro-enterprises operate retail and service-based operations.

Agribusiness, manufacturing, transportation, and information technology are some well-known industries.

Interestingly, youth-owned MSMEs have increased in popularity recently, especially in the technology and creative industries, where they provide new solutions and support a vibrant entrepreneurial environment.

Final Thoughts on MSMEs Small Business Statistics in Nigeria (2024 Detailed Overview)

Micro, small, and medium-sized enterprises (MSMEs) are the foundation of the Nigerian economy since they are the primary drivers of growth, the creators of jobs, and the promoters of innovation.

Having gone through this post: MSMEs Small Business Statistics in Nigeria (2024 Detailed Overview) you will agree with me that Nigeria can take its thriving micro, small, and medium-sized enterprise (MSME) ecosystem to new heights if it addresses the difficulties already there and embraces digital transformation.