A recent report, titled the “State of Entrepreneurship” and published by the Fate Foundation, has shed light on the substantial negative impact of President Bola Tinubu’s fuel subsidy removal on businesses in Nigeria.
Surveying over 10,000 businesses across all 36 states and the FCT, the report indicates that a staggering 90% of businesses experienced adverse effects due to the policy change.
Smaller enterprises bore the brunt more significantly than their larger counterparts, facing challenges such as increased operating costs, diminished profits due to weakened demands, and a loss of customers.
The report highlights that the South-eastern businesses were the most severely impacted by the subsidy removal, while those in the South-south felt the least relative effects compared to other regions.
The repercussions were evenly distributed among male and female entrepreneurs.
The removal of fuel subsidies was not the sole factor affecting businesses, as the report also unveiled that approximately 89% of businesses in Nigeria suffered due to the scarcity of the national currency earlier in the year, particularly in the lead-up to the general elections.
The agricultural sector bore the brunt of the naira scarcity, leading to a contraction of 0.9% in the sector’s GDP report for Q1—a noteworthy decline, marking the first in over three decades.
Despite these challenges, the report indicates that around 86% of Nigerian entrepreneurs maintain an optimistic outlook towards future business opportunities.
However, this figure is slightly lower than the 93% who expressed a positive outlook in 2022.
Examining the sectoral distribution of businesses, the report reveals that the service sector dominates, constituting 35% of businesses. Goods-oriented businesses account for 22%, while 42% engage in both goods and services.
At the sectoral level, 18.8% of total businesses operate within the wholesale and retail trade sector.
Source: Nairametrics