Inflation is top nightmare for Nigerian startup founders — Report

A report by Flourish Ventures has revealed that 66 percent of Nigerian founders have listed the country’s growing inflation rate as their highest stressor.

The report, “Passion and Perseverance; Voices from the African Founder Journey,” received responses from 169 founders in 13 African countries and aims to kickstart conversations about founders’ well-being.

Nigeria’s inflation rate, 33.88 percent in October from 32.70 percent reported in September 2024, has greatly impacted the ease of doing business in the country, affecting the business of these founders. Apart from Nigeria, 57 percent of founders in Egypt and 17 percent of founders in Kenya also echo the inflationary pressures on their startups.

Egypt’s inflation rate stood at 26.5 percent as of October, while Kenya’s was down to 2.7 percent from 3.6 percent in September.

“The external stressors—factors largely outside our control—are big contributors to stress and burnout for most entrepreneurs. As an investor, I try to help my founders focus on what they can control and let go of what they cannot,” said Iyin Aboyeji, founding partner at Future Africa.

For female founders, their stressors have extended beyond typical business challenges. The report noted that, “Loneliness, work-life balance, and fear of failure emerge as disproportionately significant stressors for female founders.”

Africa is home to a burgeoning startup community with a rapidly growing number of early-stage founders, investors, accelerators, and other stakeholders from across the venture capital ecosystem.

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According to the report, founder motivation and drive are high, and the potential for success is immense, however, so is the pressure.

“Navigating the fast-paced startup environment can be gruelling as founders face high stress, challenging macroeconomic conditions, and long hours,” it read.

The report further revealed that 59 percent of founders disclosed raising funds as their biggest stress factor, while 44 percent revealed that inflation and currency devaluation are theirs.

Forty percent of founders cited other macroeconomic challenges, with 32 percent naming company management. Co-founder relationship stresses 21 percent of African founders while 16 percent claim theirs is investors relationship.

Further data gathered on founders’ well-being asserts that even high performers feel intense pressure, with 76 percent of founders who say their startups are thriving reporting an impact on their well-being.

“While 46 percent of founders claim to suffer from anxiety, 49 percent of founders report high stress and exhaustion,” the report noted.

Notably, many founders turn to exercise (59 percent), relationships (49 percent), sleep (45 percent), and healthy eating (42 percent) as coping strategies.

Flourish Ventures revealed that founders with strong personal support networks experienced 13 percent higher well-being compared to those with weaker networks.

However, despite the benefits of open communication, only 14 percent of founders feel comfortable discussing their mental well-being struggles, and their hesitance is driven primarily by fears of judgment and a lack of empathy from investors.