…hits 0.47 in 2025
…business formation improved modestly
Nigeria’s entrepreneurship sector has shown a sign of improvement in 2025, with the State of Entrepreneurship Index rising marginally to 0.47, marking the first increase since the index’s inception in 2021, according to a new report by the Fate Institute.
The report, which sampled 10,882 entrepreneurs across the country, shows that the index rose to 0.47 out of 1.0 in 2025, up from 0.46 in 2024.
“This is a small step, but for us it is symbolic because it is important that this is the first time that the index has increased since we started measuring entrepreneurship development across Nigeria since 2001,” said Oyebola Agunloye, lead, research, The Fate Institute, during the launch of the report.
“The report shows that entrepreneurs themselves have become more optimistic, they have become more open to technology, as we will see in the other slides, and they have become more willing to introduce new products and services.”
“But the business environment around them is still not evolving fast enough, and constraints like lack of access to finance, policy instability and also limited support structures continue to slow down progress for entrepreneurs. This slide talks about the state-level entrepreneurial index rankings.”
The report stated that three of the five pillars performance indicators – perception of opportunities, innovation & digital technology adoption and business performance – improved slightly, while enabling business environment and skills acquisition remained weak.
According to the report, despite the persistent structural and institutional challenges, entrepreneurs continue to display optimism and growing technological adoption to cut down on costs.
At the sub-national level, entrepreneurs in Kogi, Kwara and Bauchi emerged as top performers, driven by improved business performance, innovation and enabling conditions. Lagos, Jigawa and Taraba also ranked high, reflecting stronger adaptation to reforms and better access to support systems.
Entrepreneurs in Gombe, Imo and Kaduna lagged significantly, the report attributed it to being constrained by weak infrastructure, poor access to finance and limited entrepreneurial support.
On job creation, entrepreneurs in the country created 14,269 jobs, mostly at the micro scale in 2025, with one in four hiring a new full-time employee and one in five adding a part-time worker.
However, the sector lost 16,571 jobs, resulting in a net figure of about 2,300 jobs. “This pattern shows a sector marked by resilience but also fragility.”
The report noted that business formation improved modestly in 2025, signalling a recovery in entrepreneurship activity after two years of slowdown.
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“About 26.7 percent of respondents reported starting a new business, up from 24 percent in 2024, though still below the pre-2023 average of 30 percent,” the report said.
Youth-led businesses recorded improvements in 2025, with 65.8percent reporting growth, an increase from 62.3 percent in 2024, the report said.
According to the report, the performance of the youth-led businesses reflects improved access to finance and stronger technology adoption.
“The improvement suggests that entrepreneurs are gradually adapting to Nigeria’s reform landscape, striving to survive and scale,” it added.
The report shows that 69 percent of female-led businesses grew this year, even outperforming male firms. Women are also winning in technology adoption, as over 72 percent of female-led businesses use technology for their daily operations.
However, only 26 percent were able to access finance through formal institutions, which is proof that women are innovating, growing and adopting technology, but without the formal financing that we deserve.
