Report: Youths Entrepreneurs Own 67% of Enterprises in Nigeria, Women Accounts for 43%

Dike Onwuamaeze

A report on the, “State of Entrepreneurship in Nigeria 2021,” has revealed that 43 and 67 percentages of entrepreneurs in the country are women and youths whose age brackets fall within 18 and 35 years respectively.

The report, which was produced by The Fate Institute, also called for targeted institutional support for these businesses to enhance their growth and maximise their impact on the economy.

It said: “Most businesses set up by entrepreneurs have been successful, with 66 per cent of respondents affirming that the businesses they have set up have been successful as against 34 per cent that said their businesses failed.”

The report examined three thematic areas: the entrepreneurial index in Nigeria, women and youth-led businesses and thirdly the impact of technology on businesses. It revealed that the state of entrepreneurship development is fairly strong in the country, but identified access to finance, inadequate infrastructure and insecurity as the major obstacles to entrepreneurial growth in the Nigeria.

It measured the state of entrepreneurship in Nigeria around five pillars of business performance, perception and opportunities, digital adoption, skill acquisition and enabling environment.

“The implication of the above result is that Nigerian entrepreneurs are ambitious and positive in their outlook on the business environment from an opportunities standpoint. However, several challenges stand in their way,” the report said, adding that “access to new opportunities is the major driver of growth of youth led businesses and poor access to finance is a major headwind to growth.”

It also described the Nigerian business environment as volatile, uncertain, complex and ambiguous, adding that 73 per cent businesses in the country face liquidity challenges while 20 per cent of work forces were laid off due to the harsh effects of COVID-19 on enterprises.

It added that most businesses in Nigeria are less than 10 years old and that 49 per cent of them are also led by young people.

It further revealed that 60 per cent of entrepreneurs in Nigeria attended tertiary education and has at least a university bachelor degree or Higher National Diploma (HND) from polytechnics.

The report also said that the gender gap among entrepreneurs has narrowed significantly in today’s entrepreneurial landscape as male and female ownership of enterprises were 57 and 43 per cent respectively.

However, the survey revealed more women entrepreneurs in Lagos, Abia, Bauchi, Edo, Gombe, Kwara and Oyo States.

It also confirmed that most entrepreneurs in Nigeria are micro scale operators, having between 0-9 employees, which were hindered by interplay of several factors in the operating environment from expanding their businesses.

It highlighted that MSMEs within their first five years that exhibited innovative and disruptive business model by leveraging technology were more likely to be owned by women entrepreneurs.

The report, according to the Executive Director, Faith Foundation, Ms. Adenike Adeyemi, looked at the evolving demographic trends, indicators of entrepreneurship to present new data that showed where entrepreneurship in Nigeria stands today and where it is headed to in the medium to long term.

She said: “This report also presents insights following the impact of COVID-19 on Nigeria’s entrepreneurial community, which should be helpful to stakeholders within the public, private, development and academic spaces deliberating on strategies to promote economic recovery.”

The report stated that, “certainly, the future of entrepreneurs in Nigeria is bright, but it is bright to the extent in which the environment supports their noble ambition. Our results reveal that most entrepreneurs are youths; that is, between the ages of 18-35. This age group accounts for 67 per cent of entrepreneurs, reflecting the country’s skewed population structure towards this cohort.

“It however also reveals differences across old and young entrepreneurs. While young entrepreneurs are very energetic, with a high-risk appetite, and are willing to leverage new technologies, older entrepreneurs usually have greater knowledge of the business landscape and wider networks. As such, it is expected that younger entrepreneurs would be more successful in launching early stage businesses.”

The report also showed that 75 per cent small businesses are incorporated as a business name with the remaining 25 per cent of respondents incorporated as either a private company limited by shares, company limited by guarantees or public company limited by shares.

“Most of the entrepreneurs surveyed are engaged in the retail, fashion and FMCG. Other leading activity sectors among entrepreneurs surveyed include agriculture, fishing, forestry, hospitality and hotel,” it said.

However, most entrepreneurs in Nigeria do not belong to business associations or trade groups where they could enjoy “the benefits associated with membership of business associations or trade group which include networking, exchange of ideas, advocacy and legal representation, amongst others.”

The report recommended that government, “working with the private sector, needs to establish a well-functioning entrepreneurial ecosystem that supports innovation and business growth.”