Nigeria’s deepening unemployment crisis is forcing millions of citizens into what appears, on the surface, to be an entrepreneurship boom. But new market insights reveal a more troubling reality, most of these ventures are not built for growth, they are businesses of survival.
As formal jobs shrink, Nigerians are increasingly turning to nano businesses and accidental enterprises simply to stay afloat. While the numbers suggest a dramatic shift towards entrepreneurship, the underlying business models prioritise daily income over sustainable wealth creation.
A new report by MoniePoint Inc highlights the scale of this shift. According to the data, 24 per cent of micro savings in Nigeria are now being channelled into starting or expanding businesses, signalling a growing appetite for self-employment amid economic hardship. At the grassroots level, ₦24 of every ₦100 saved is targeted at business activity.
Yet survival pressures dominate household finances. Rents now consume 16.5 per cent of total savings, in some cases exceeding workers’ annual salaries. Leisure spending during the festive season, popularly known as Detty December accounts for 11 per cent, outpacing savings for education, which stands at 10 per cent.
The report, which largely reflects low-income earners saving between ₦200,000 and ₦500,000, exposes a quiet but significant crisis. Despite their limited resources, poorer Nigerians are still attempting to invest in education and business, a signal of resilience often overlooked by policymakers.
Health and education, long recognised as key tools for reducing income inequality, remain underfunded. Health-related savings rank outside the top five, accounting for just nine per cent, a worrying trend in a country where healthcare and education are largely paid out of pocket.
This imbalance risks deepening inequality. While low-income families remain trapped by rent, energy costs and survival expenses, wealthier Nigerians continue to send their children abroad. Central Bank of Nigeria (CBN) data show that $1.4 billion was spent on foreign education in the first half of 2025, a 20 per cent increase from the same period in 2024. From 2020 to mid-2024, Nigerians spent $11.1 billion on overseas education.
The gap is widening. As children from affluent homes return to dominate high-value opportunities, those from poorer backgrounds are left behind not due to lack of ability, but limited access to quality education and basic support.
Meanwhile, operating conditions for small businesses continue to deteriorate. Electricity, once a social service, is now an expensive economic commodity. Higher tariff bands remain largely inaccessible to low-income earners, while off-grid energy solutions have become prohibitively expensive due to naira depreciation. In some cases, the cost of solar panels, batteries and inverters has risen by up to 200 per cent.
Although the government has introduced tax waivers for small businesses, experts argue that risk reduction not tax relief is the urgent priority. Regulatory pressure, inflation and weak infrastructure continue to suffocate growth.
The Informal Economy Report 2025 paints a stark picture: half of informal businesses generate less than ₦20,000 daily, while 70 per cent earn below ₦50,000. Profit margins are thin, with median daily profits between ₦10,000 and ₦20,000.
As artificial intelligence reshapes labour markets, the outlook is even more uncertain. An EY report reveals that 72 per cent of Nigerian businesses are already exploring AI to restructure their workforce, threatening entry-level roles and informal employment. IMF Managing Director Kristalina Georgieva has warned that AI could significantly disrupt job markets, including in emerging economies like Nigeria.
With the informal sector accounting for over 90 per cent of employment since 2022, Nigeria risks entrenching a cycle where millions work harder without escaping poverty.
One exception is the digital economy. Content creation and influencer marketing, valued at $5.3 billion, are gaining traction. About 54 per cent of young Nigerians follow at least one influencer, and Nigeria now boasts an estimated 37 million TikTok users, many monetising the platform as a side hustle.
Still, for most Nigerians, entrepreneurship is no longer a choice, it is a last resort.
