Inflation-Driven Entrepreneurship in Nigeria: A Shift Towards Necessity
The rise in inflation in Nigeria is pushing many individuals towards entrepreneurship, as revealed by a PiggyVest survey where 31% have made starting a business a priority. Economic challenges are leading to increased debt and necessity-driven entrepreneurship, with women showing higher ownership rates. Despite the hardships, there is a growing focus on financial independence and effective business management solutions.
The significant rise in inflation in Nigeria is compelling many individuals to turn to entrepreneurship as a means of survival. A recent survey conducted by PiggyVest involving over 10,000 Nigerians indicated that 31 percent of respondents are now prioritizing business ventures as a primary focus for their short-term savings. Odunayo Eweniyi emphasized that this shift towards entrepreneurship is driven largely by necessity rather than mere ambition, as citizens grapple with rising costs and shrinking purchasing power.
The PiggyVest report revealed that the drive to start or grow a business ranks as a crucial short-term savings objective for many, with 31 percent of participants identifying it as a key goal. Furthermore, the need to sustain or initiate businesses is forcing approximately one in four Nigerians into debt. Notably, 26 percent of respondents reported owning a business, with a higher prevalence among women compared to men.
As of January 2024, Nigeria’s headline inflation rose to 29.90 percent and further escalated to a record 34.80 percent by the end of the year, which continues to compromise purchasing power and fuel the demand for additional income streams. The pervasive issues, including soaring food prices and currency volatility, have established entrenched inflationary pressures that businesses and consumers struggle to manage.
The entrepreneurial spirit among Nigerians is inescapably linked to adverse economic conditions, as many express that entrepreneurship is often a necessity rather than a choice. One tweet highlighted this sentiment: “Most Nigerians aren’t entrepreneurs by choice. It’s a necessity to supplement income from a job or if no job is available.”
According to PWC, small businesses account for a staggering 96 percent of enterprises in Nigeria and 84 percent of jobs, contributing approximately 46.3 percent to the national GDP. Furthermore, the PiggyVest data indicates that female ownership of businesses exceeds male ownership. Ibiyinka Ibru posited that women often turn to entrepreneurship due to limited workforce participation, particularly as families expand. In many cases, these women are starting micro-businesses not to grow extensively, but to ensure their family’s survival.
Insights from the PiggyVest report are instrumental in shaping their product offerings. The previous year’s findings indicated a surge in relocation savings, prompting PiggyVest to customize its savings products accordingly. As economic priorities evolve, Eweniyi observed an increase in savings geared towards business startups and financial independence. This trend has led to enhanced SafeLock interest rates and the introduction of PiggyVest Business, aimed at improving users’ financial management for their business endeavors.
In conclusion, the ongoing inflation crisis in Nigeria is driving a significant number of citizens towards entrepreneurship out of necessity rather than choice. With more individuals prioritizing business ventures for financial stability, especially among women entrepreneurs, the economic landscape of Nigeria is witnessing profound shifts. The findings from PiggyVest underscore the need for adaptive solutions that respond to changing economic conditions and support the burgeoning entrepreneurial spirit within the nation.
Original Source: businessday.ng
