2025 Nigerian SME Industry Report

Overview of the Report

Nigeria’s Small and Medium-sized Enterprises (SMEs) constitute the bedrock of the nation’s economy, contributing substantially to both Gross Domestic Product (GDP) and employment. Nevertheless, this pivotal sector has hitherto lacked systematic, data-driven analysis. The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) indicates that the country possesses in excess of 41 million SMEs. These are categorised by employment figures and asset valuation, encompassing micro-enterprises (fewer than 10 employees, assets below ₦5 million) through to medium enterprises (50-199 employees, assets valued between ₦50 million and ₦500 million). This sector contributes almost 50% to Nigeria’s GDP and represents approximately 80% of national employment, thereby highlighting its instrumental function in fostering inclusive growth and catalysing innovation across various sectors. Although the aggregate number of MSMEs decreased to 39.7 million in 2021 from circa 41 million in 2017, and the business formation rate declined to 24% in 2023 from 32% in 2022, indicative of a challenging economic environment, the sector persists as a dominant economic force. As of 2023, it accounted for 96% of all businesses nationwide and contributed 84% of total employment.

This comprehensive industry report delivers an in-depth examination of the SME landscape from both global and national standpoints. It synthesises rigorous analysis, detailed segmentation, and strategic insights, thereby furnishing decision-makers with a holistic comprehension of the sector’s architecture, attendant challenges, and inherent growth potential.

The report includes:

• A global benchmarking of SME markets, comparing regional distributions and segmentation patterns;
• A detailed overview of Nigeria’s SME sector, including GDP contribution, size distribution, sectoral classification, and ownership structures;
• Comprehensive mapping of key risks, from regulatory uncertainties to structural financing gaps;
• A dedicated section on access to finance, profiling lending institutions, funding gaps, interest rate structures, and financial product mismatches;
• A critical assessment of Nigeria’s regulatory environment, covering institutional stakeholders, tax regimes, and government policies;
• Forward-looking insights, offering a strategic outlook on the future of SMEs in Nigeria and outlining actionable recommendations for stakeholders.