Nigeria’s rising inflation is driving citizens towards entrepreneurship, with a survey revealing that 31% are prioritizing business ventures to combat economic hardship. The inflation rate hit a record high in 2024, prompting about 26% of Nigerians to engage in business ownership, particularly women. This necessity for entrepreneurship is reshaping saving goals and financial products, as many seek alternative income sources to cope with financial strain.
The ongoing rise in inflation in Nigeria is driving a notable change in economic behavior, prompting many citizens to pursue entrepreneurship as a survival strategy. According to a recent PiggyVest Finance Roundtable, which surveyed over 10,000 Nigerians, 31 percent are now focusing on business ventures as their primary short-term savings objective, largely out of necessity rather than mere ambition. As highlighted by Odunayo Eweniyi, this trend underscores the pressing reality of diminished purchasing power caused by escalating costs.
Data from the survey illustrates that among respondents, starting or expanding a business ranks as the second most important short-term savings goal, also indicating that nearly 25 percent of Nigerians are incurring debt to sustain or initiate their enterprises. The report further reveals that approximately 26 percent of Nigerians own businesses, with a higher rate of ownership observed among women.
The inflationary situation became acute in 2024, with Nigeria’s headline inflation rate escalating to 29.90 percent in January and peaking at a staggering 34.80 percent by year’s end, exacerbating the necessity for individuals to explore multiple income avenues. Rising food prices, a depreciating naira, and excess liquidity have compounded these economic challenges, placing significant strain on both consumers and businesses.
Conversations among Nigerians on platforms such as X (formerly Twitter) reflect a consensus that many embark on entrepreneurial ventures out of economic necessity rather than choice. One user articulated, “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.”
According to PwC, small businesses account for 96 percent of all businesses and create 84 percent of employment, contributing around 46.3 percent to Nigeria’s GDP. The ownership dynamics indicate that women are more likely to own businesses than men, a trend attributed to their exclusion from traditional workforce opportunities, particularly due to family commitments.
Ibiyinka Ibru remarked on this phenomenon, stating, “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. 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 noted that findings from the report are instrumental in guiding PiggyVest’s product development. For instance, heightened interest in relocation savings (‘Japa’) led PiggyVest to adjust its savings offerings. As priorities shift under economic pressures, she stated, “Today, people are saving more for starting businesses and financial freedom.” This shift prompted the rise of SafeLock interest rates and the introduction of PiggyVest Business, a new platform aimed at assisting users with business finance management. Eweniyi emphasized, “People are focusing more on getting the best returns for their money.”
In conclusion, Nigeria’s escalating inflation has compelled many citizens to embrace entrepreneurship as a means of survival rather than ambition. The shift towards starting or growing businesses is evident in the growing number of entrepreneurs and the associated debt incurred for sustenance. Women, in particular, are actively engaging in business ownership, largely as a response to the exclusion from traditional job markets. As economic conditions evolve, so do the financial priorities of the populace, highlighting the necessity of adapting to the changing landscape for personal and financial growth.
Original Source: businessday.ng
