Many small businesses earn N223,250 in monthly revenue, a new study from the National Bureau of Statistics and the Financial Access Initiative research center of New York University has revealed.
Nigerian businesses make less money than businesses in the other nations, claims the report. It claimed that less than N223,250 in monthly income (PPP USD 1,547) was earned by half of the businesses it surveyed.
This is about half (46 per cent) of the firms surveyed reported, holding a loan of some kind, most of which were from informal sources, including suppliers, friends, and family.
The report, titled, ‘Nigeria small firm diaries’, was supported by the Mastercard Center for Inclusive Growth, the Bill & Melinda Gates Foundation, and the Argidius Foundation was a global research project that provided insight into the financial lives of small businesses in seven countries across Latin America, Sub-Saharan Africa, and Asia.
The study in Nigeria collected data from 161 small businesses in urban, suburban, or semi-rural areas surrounding three locations: Enugu, Kaduna, and Lagos, between August 2021 and August 2022, and was focused on three industries—light manufacturing, agri-processing, and services.
Commenting on the study, the Statistician General, NBS, Adeyemi Adeniran, said, “As the premier agency for the collection, publication, and dissemination of official statistics on Nigeria, NBS was proud to collaborate with the international research team for the Small Firm Diaries project.
“This study is unique in Nigeria—it is the first large-scale project to gather high-frequency data from businesses of this size—and will allow policymakers to better understand and address the challenges facing these businesses.”
The study disclosed that Nigerian small firms experience volatile earnings as both revenue and expenses fluctuate from month to month. It noted that many Nigerian firms have high rates of bank account ownership.
It said, “Compared with other countries in the study, Nigerian firms have high rates of bank account ownership: 97 per cent of small firm owners in Nigeria have bank accounts for business—more than in Kenya (79 per cent), Colombia (70 per cent), or Indonesia (65 per cent).