Tinubunomics Takes Toll: 7 Million Businesses Shut Down in Nigeria

Tinubunomics Takes Toll: 7 Million Businesses Shut Down in Nigeria

Nigeria's economic crisis has led to the closure of approximately 7.2 million businesses between 2023 and 2024 under the President Bola Tinubu-led government, exacerbating concerns about the country's financial stability. This alarming rate of business closures comes amid rising inflation, high operational costs, and increasing economic uncertainty.

According to Dr. Segun Omisakin, Chief Economist and Director of Research at the Nigerian Economic Research Group (NESG), the country recorded an estimated N94 trillion loss due to multinational divestments and business closures. Omisakin highlighted that unfavorable economic conditions led to the shutdown of about 30% of Micro, Small, and Medium Enterprises (MSMEs) in Nigeria.

Entrepreneurs and business owners in Nigeria have faced escalating fuel prices, transportation costs, and an overall inflation crisis, making it difficult for many enterprises to stay afloat. Stakeholders have called on the government to implement urgent policy interventions to stabilize the economy and support struggling businesses.

The NESG report further emphasized the need for improved economic policies, investment incentives, and infrastructure development to revive the private sector and restore investor confidence. Nigeria's business landscape remains fragile, and without strategic reforms, the trend of business closures and capital flight may persist, further deepening the country's economic challenges.

In a related development, the National Bureau of Statistics (NBS) reported that tax revenue from local companies in Nigeria declined by 36.4 percent within three months. The NBS' latest Company Income Tax report shows that tax revenue reduced to N651.6 billion in the third quarter of 2023 from N1.02 trillion in the previous quarter.

The World Bank's latest Nigeria Development Update report revealed that rising inflation and sluggish growth in Africa's biggest economy increased the number of poor people to 104 million in 2023 from 89.8 million at the start of the year. Despite the reforms implemented by the Tinubu administration, foreign investments into Nigeria dropped to $654.7 million, the lowest level since the statistics bureau started collating the data in 2013.