Young Entrepreneurs Have Started Ruling Nigeria’s Business

Recently, a report titled “State of Entrepreneurship in Nigeria 2021” by the FATE Institute has revealed that in Nigeria, 67% of the entrepreneurs are youth that lie in the age bracket of 18 and 35 years. The report further revealed that 43% of the entrepreneurs are women. According to a report, entrepreneurship is fairly strong in Nigeria.

Entrepreneurs are very important in the country as micro, small and medium enterprises of Nigeria contribute 49.8% of the country’s Gross Domestic Product. In addition to that, the entrepreneurs contribute to 85% of the total industrial employment. Improvement in education and healthcare has further contributed to the growth of entrepreneurs in Nigeria. 

Nigerian Entrepreneurs Proved Resilience To Covid-19 Pandemic

When the world was hit by the Covid-19 pandemic, the Nigerian entrepreneurs proved to be resilient and dynamic. By adopting the new policy changes that occurred during the long down, the young entrepreneurs proved their dynamic nature. Coping mechanisms by these entrepreneurs during the pandemic included support from the government, family and friends, technology and further, new products and services were designed to meet the needs of the new normal.

These coping mechanisms are different from the actual support that is provided by the government in other countries. For instance, in India, Lottery Sambad provided financial support to the people and the Teer Result is seen with great enthusiasm for the same reason.  Also, the revenue sources were diversified by the young entrepreneurs to remain sustainable in a difficult time. Technology played a key role in the survival of the businesses in the country. 

Data Overview Of Nigerian Entrepreneurs 

Even though a gender gap exists in the entrepreneurial space, the gap has been reducing in Nigeria. Even though men still dominate the space, women are also trying their best to create their names in the Nigerian entrepreneurial market. Currently, in Nigeria, 57% of the entrepreneurs are men and 43% are women. In Nigerian states like Abia, Edo, Bauchi and Lagos, the number of women entrepreneurs were comparatively more. The highest number of female-led entrepreneurs was in Lagos. 

The data by the FATE foundation also revealed that early-stage businesses were mostly launched by young entrepreneurs. 48% of the Nigerian entrepreneurs are currently working as full-time entrepreneurs. Most of the businesses that are currently operating in Nigeria are less than 10 years old. Most of the start-ups that are, 71% that are run by the entrepreneurs operate on a micro-scale with 0-9 employees. 23% of the companies are small scale, 3% are medium-scale and only 1% of the total companies are operating at a large scale. Out of all the businesses that are running in Nigeria, 56% are registered while 44% are not registered and therefore, it can be safely said that a certain amount of informality exists in the start-up ecosystem of the country. 

Sector Of Operation

Most of the Nigerian companies (22.9%) are engaged in retail, fashion and FMCG. This is followed by agriculture, fishing and forestry. Other popular categories include hospitality and hotels, advertising and marketing, entertainment and events, digital, media and communication, healthcare and art and design. The least popular sector in the business is that of government, recruitment, law enforcement and security, law, NGOs, mining, oil and metals. 

The Education Profile Of Nigerian Entrepreneurs

45% of the Nigerian entrepreneurs have at least Bachelor’s degrees. 16% of the entrepreneurs have secondary education and 15% have a Higher National Diploma. In addition to that, the majority of the young entrepreneurs have done some sort of training for starting their start-up journey and the most common form of training in business management. In addition to that, another popular training amongst the entrepreneurial group is financial records, business expansion and managing talent. 

What Are The Indicators Of Entrepreneurship 

There are five major indicators of entrepreneurship in Nigeria: business performance, perception of opportunities, digital adoption, skills acquisitions and enabling environment. The business measure indicator measures the growth in revenue and employees and the share of businesses that recovered and were forced to shut down due to Covid-19.

The current entrepreneurial index score in Nigeria is 0.69 which is considered strong. The highest index score belonged to skills adoptions, followed by digital adoption and perception of opportunities. 

The reason behind the highest score in skill adoption and digital adoption was due to the fact the young entrepreneurs are looking for new skills and training to grow their businesses and these young people are using both technology and innovation to execute their business.