Youth-led start-ups top Nigeria’s business index in 2024

Youth-led businesses for the first time in four years, had the highest share of total businesses surveyed, with a share of 44.4 percent in 2024, according to a new report by FATE Foundation.

The report stated that several young Nigerians are venturing into business relative to 2023, making youth-led start-ups perform better in terms of access to finance, job creation and skills acquisition, despite a challenging business environment.

“Compared with other age groups, youth entrepreneurs had the highest share of technology adoption (72 percent), which was also linked to business growth of 71.4 percent of youth-led businesses that adopted technology reported growth, while 82.4 percent of youth-led businesses that experienced growth had adopted technology.”

Nigeria’s young entrepreneurs are a formidable force in the country’s entrepreneurial ecosystem, displaying a high level of ambition, adaptability and tech-savviness, according to experts.

In 2024, many youth-led enterprises such as Venture Growth Pioneer by Maya Famodu; Digital Marketing Leader by Tiwalola Olanubi Jnr; Business Strategist & Consultant by Florence Chikezie; Education Innovator by Gossy Ukanwoke; and HealthTech Trailblazer by Chika Madubuko, among others led the path, the report said.

On state levels, Anambra and Ebonyi led the rankings with a score of 0.77, which is remarkably above the average index of 0.46.

The two states performed significantly well in areas such as business birth rates, the share of registered businesses and the share of female and youth-led businesses that experienced growth and accessed finance.

In the same vein, Kogi, Kwara and Oyo States were ranked third, fourth and fifth, respectively.

However, among the top five states in 2023 (Kano, Kogi, Kaduna, Borno and Bayelsa), only Kogi retained its spot as one of the top five states in 2024.

The survey also revealed that at the bottom of the rankings are Niger, Cross River and Zamfara States having least of the scores.

Overall, relative to last year, 20 states recorded a decline, while 15 states improved their rankings. Two states, Plateau and Zamfara maintained the same spots in 2024.

Besides, the 2024 survey reveals that Nigeria’s Entrepreneurial Index stands at 0.46, down from 0.52 in 2023, reflecting lower business growth rates, fewer jobs created, lower levels of skills adoption among entrepreneurs, and the persistence of challenges such as local currency depreciation, high inflation, insecurity and poor power supply.

The survey also observed a decline in the business birth rate from 30 percent in 2023 to 24 percent, evidencing a slowdown in new business creation.

Nevertheless, it noted some green shoots, particularly among female and youth-led businesses.

According to Amaka Nwaokolo, the director of the Fate Institute, “Female-led businesses have shown a notable increase in both market participation and growth. At the same time, youth entrepreneurs have become a driving force, leading technology adoption at an impressive rate of 72 percent.

“These trends underscore the potential of inclusive policies and technology-driven interventions to foster sustainable growth.”

The 2024 State of Entrepreneurship report surveyed 10,535 businesses across Nigeria’s 36 states and the Federal Capital Territory (FCT). It painted a detailed picture of the challenges and opportunities in the MSME sector, which accounts for over 40 percent of Nigeria’s GDP and employs millions of citizens.

Adding to the conversation, Taiwo Oyedele, chairman of the presidential committee on Fiscal Policy and Tax Reforms, noted the government’s efforts on tax harmonisation to alleviate the burden on MSMEs.

“Nigeria’s tax system is one of the most complex globally, with over 60 different taxes levied by federal, state, and local governments,” Oyedele said. “This multiplicity of taxes discourages investment and stifles growth.”

The FATE Institute is the research, policy and advocacy arm of FATE Foundation which leads innovative thinking and creates platforms to enable idea exchange and problem-solving strategies to foster sustainable entrepreneurship in Nigeria.

Since its inception in 2015, the FATE Institute has published 14 thought leadership reports on Nigeria’s Micro, Small and Medium Enterprises (MSMEs) and entrepreneurs; hosted an annual Policy Dialogue on Entrepreneurship; and in 2021 launched a quarterly Policy Workshop series.