How high inflation is fuelling entrepreneurship in Nigeria

The relentless surge in inflation in Nigeria is forcing a shift in economic behaviour, pushing citizens towards entrepreneurship as a means of survival.

A recent PiggyVest Finance Roundtable, based on a comprehensive survey of over 10,000 Nigerians, revealed that a significant 31 percent are now prioritising business ventures as their primary short-term savings goal.

This necessity-driven trend, discussed by Odunayo Eweniyi, highlights the stark reality that many are compelled to become entrepreneurs, not out of ambition alone, but as a direct response to the crippling effects of rising costs and diminished purchasing power.

Piggyvest surveyed more than ten thousand Nigerians from diverse age groups, genders, and income levels to explore the impact of inflation on Nigerians’ income, saving and spending behaviours, business and plans, and debt management.

The report showed that starting or growing a business is the second-ranked short-term savings goal at 31 percent of the poll, and that sustaining or starting a business is also responsible for driving nearly 1 in 4 Nigerians into debt.

According to the report, 26 percent of Nigerians report owning a business, with women having a higher likelihood of ownership than men.

Read also:IWD 2025: 90% of Nigerian women consider entrepreneurship for financial stability

In 2024, Nigeria’s headline inflation accelerated to 29.90 percent in January, to a 28-year high of 34.80 percent by the end of the year, further eroding Nigerians’ purchasing power, increasing the need for multiple income streams.

The challenges are monumental. Spiralling food prices, a volatile naira, and excess liquidity have entrenched inflationary pressures, leaving businesses and consumers gasping for relief.

In a recent conversation on X formerly Twitter on the driving force of entrepreneurial spirit in Nigeria, many Nigerians alluded to it to poor economic conditions.

“Most Nigerians aren’t entrepreneurs by choice. It’s a necessity to supplement income from a job or if no job is available, to make some money. We are hustling, not proper entrepreneurship,” a Nigerian tweeted.

According to PWC, small businesses make up 96 percent of businesses and 84 percent of employment, while also contributing about 46.3% to the national GDP.

Of the total SMEs, data by Piggyvest reveals that women have a higher likelihood of ownership than men.”

“I think one of the reasons women are more likely to own businesses than men is because of exclusion from the workforce due to flexibility,” Ibiyinka Ibru commented on these data points. “That drop-off happens when women start families. In terms of micro-businesses, most of these women are not starting these businesses to scale but to survive and feed their families.”

Eweniyi said that insights from the report are also used to shape Piggy Vests’ product development. “Last year findings showed a spike in relocation savings (‘Japa’). In response, PiggyVest adjusted its target savings products to help users meet their travel goals.”

But as economic conditions shift, so do people’s priorities. “Today, people are saving more for starting businesses and financial freedom,” she said. This shift has led to an increase in SafeLock interest rates and the launch of PiggyVest Business, a platform designed to help users manage their business finances more efficiently. “People are focusing more on getting the best returns for their money,” she added.