Nigerian SMEs Trapped in Survival Mode: A Stark Reality Check
A recent report by Moniepoint, a leading African fintech company, reveals a concerning reality for Nigeria’s small and medium-sized enterprises (SMEs). According to their 2025 Informal Economy Report, a staggering 38% of Nigerian SMEs generate less than ₦10,000 ($6.78) in daily profit. This crucial data underscores that many of these businesses, often hailed as the engine of economic growth, are currently stuck in a cycle of mere survival rather than achieving sustainable scaling and expansion.
Unpacking the Informal Economy’s Profit Challenge
The Moniepoint study, which leveraged extensive transaction data from 5 million businesses on its platform combined with physical surveys across the country, offers deep insights into the informal economy. It found that while most informal businesses record daily revenues between ₦20,000 ($13.56) and ₦50,000 ($33.89), their actual profit margins tell a different story. Beyond the 38% earning less than ₦10,000 daily, a broader 70% of SMEs make less than ₦50,000 ($33.89) in daily profit, with the median profit typically ranging between ₦10,000 ($6.78) and ₦20,000 ($13.56). This squeeze on profitability is particularly critical as Micro, Small, and Medium-sized Enterprises (MSMEs) are the backbone of Nigeria’s economy, contributing approximately 65% of the GDP and providing over 80% of all employment opportunities. Rising operational costs continue to erode their earnings, making sustained profitability an uphill battle for countless entrepreneurs.
The pervasive “survival mode” highlighted by these figures calls for urgent attention. For Nigeria to unlock the full potential of its MSME sector and drive broader economic prosperity, fostering an environment where these vital businesses can build resilience through savings buffers and overcome operational challenges is paramount. Addressing these core issues is essential for transforming the informal economy from a state of survival into a thriving ecosystem of growth and innovation.
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