The fuel subsidy removal policy of President Bola Tinubu’s government, which took off in June 2023, negatively affected 90 per cent of businesses in Nigeria.
This is according to a recent report by Fate Foundation, titled “State of Entrepreneurship,” which surveyed over 10,000 businesses across the 36 states of the country and the FCT.
According to the report, smaller businesses were affected more than big businesses, and the policy resulted in high operating costs and lower profits due to weak demand and the loss of customers.
The report further stated: “Entrepreneurs in the South East were the most affected, while those in the South South were the least affected, relative to other regions. The impact of the policy was even for both male and female entrepreneurs.”
The report also revealed that around 89 per cent of businesses in the country were negatively affected by the naira scarcity experienced in the first quarter of 2023, with the agricultural sector being the most affected.
It further explained that the impact of the naira scarcity on farmers led to the contraction of the agricultural sector’s output by 0.9 per cent in the GDP report for Q1. The decline was the first in over three decades.
Regarding Nigerian entrepreneurs’ outlook towards business opportunities, around 86 per cent reported being optimistic about the future. However, the figure is less than the 93 per cent who affirmed their positive outlook in 2022.
According to the report, service sector businesses accounted for the country’s major share of businesses.
“While 35 per cent of businesses offer services, 22 per cent sell goods, and another 42 per cent trade in both goods and services. At the sectoral level, 18.8 per cent of total businesses operate in the wholesale and retail trade sector,” the report stated.
