The Micro, Small and Medium Scale Enterprises (MSMSEs) — long hailed as the backbone of Nigeria’s economy — are collapsing under policy choices that have dramatically raised costs and squeezed demand. Despite President Bola Ahmed Tinubu’s repeated assurances under the Renewed Hope Agenda that empowering small businesses is central to national recovery, recent reforms and macroeconomic shifts have left millions of entrepreneurs fighting for survival.
A DAILY Trust investigation lays bare the growing crisis. MSMSEs, which number over 40 million and are said to account for nearly 90 per cent of the economy’s business units, now face a punishing mix of higher taxes, regulatory burdens, runaway inflation, crippling energy costs and near-impossible access to affordable JM credit. The cumulative effect is not just declining profits — it is shuttered workshops, scaled‑down trade and lost livelihoods.
Two policy changes have been especially damaging. The removal of fuel subsidies has sent petrol prices from about N187 per litre in 2023 to roughly N1,400 in 2026, sharply increasing transportation and production expenses. Electricity tariffs have also climbed while supply remains erratic, forcing many businesses to rely on expensive diesel generators. The result: frozen‑food sellers watch stock rot during prolonged outages; welders and tailors burn through cash on fuel to power machinery; barbers and laundry operators adopt low‑margin, makeshift alternatives; and market traders in Kano and Lagos are buying and selling in smaller quantities just to stay afloat.
The timing could not be worse. Millions of Nigerians pushed into informal entrepreneurship by unemployment, low pension payouts and a weak formal sector are now seeing their only safety net fray. High inflation has eroded household purchasing power: consumers pare spending back to food, fuel and healthcare, cutting discretionary purchases that sustain local shops, craftsmen and service providers. For neighbourhood manufacturers and retailers, demand has fallen even as input costs rise — an unsustainable squeeze that limits their ability to pay wages, service loans or invest in growth.
The gap between the administration’s stated priorities and the lived reality of entrepreneurs points to a troubling policy disconnect. If the Renewed Hope Agenda is to mean anything for ordinary Nigerians, it must translate into targeted, practical measures that restore MSMSEs’ viability and preserve jobs across the country.
Lessons are available from economies that have deliberately nurtured their small‑business sectors. China, India and South Korea have used coordinated policy instruments — low‑interest finance, tax relief, technology upgrades, export linkages and institutional support — to convert micro and small enterprises into engines of industrial growth and employment. Nigeria can adapt these approaches to its context by combining immediate relief with medium‑term investments in energy, finance and procurement.
Immediate and practical steps that the federal government and other stakeholders should take include:
• Central Bank of Nigeria: establish a dedicated MSME intervention fund offering single‑digit interest loans and credit guarantees to shield small enterprises from prohibitive commercial rates.
• Fiscal reform: harmonise and streamline state and local levies into a single, predictable annual payment; grant immediate tax holidays or simplified tax regimens for microenterprises.
• Energy policy: remove import duties and reduce tariffs on solar panels, batteries and inverters; introduce subsidies or financing schemes for off‑grid and renewable solutions to cut reliance on expensive petrol and diesel.
• Public procurement: mandate that government agencies source at least 40 per cent of goods and services from local MSMSEs, creating a stable demand base and encouraging local production.
• Regulatory and capacity support: expand business development services, digitalisation grants, and local SME hubs that provide training, market access and linkages to export value chains.
These measures will not only relieve short‑term distress but lay the foundations for resilient, job‑creating enterprises that can compete domestically and internationally.
The current moment represents a test of policy coherence: will the Tinubu administration translate rhetoric into the concrete support MSMSEs urgently require, or will millions of smallholders be left to bear the full cost of economic adjustment? The answer will determine whether Nigeria’s vaunted entrepreneurs remain the country’s greatest hope — or become another casualty of reform.
