Due to the high cost of business operations and dwindling sales in 2024, 43.7% of businesses in Nigeria were forced to lay off some staff.
Amid these challenges, about 41.7% of businesses had to diversify their services and product offerings to stay relevant and remain in business.
This is according to a report from Mustard Insights, a Nigerian-based research and data firm.
The report, titled Nigeria’s Business Survival Report 2024: Strategies for Sustainable Business Growth Amid Economic Turbulence, gathered insights and responses from over 100 business owners, management teams and industry leaders about the 2024 business year.
Businesses increase prices to stay afloat
The survey also showed that about 65% of businesses were forced to increase the price of goods to stay afloat, Daily Trust reports.
Several difficulties experienced by the businesses were traced to the increase in energy and fuel prices, naira devaluation, and rising operations costs driven by inflation.
Official data from the National Bureau of Statistics (NBS) shows that inflation hit 34.80% by the end of 2024.
The situation forced many of these businesses to hold off on expansion plans and focus on surviving amidst the inflation crisis.
Only about 53.4% of businesses managed to meet growth targets, while others shelved their growth plans for the future. Some reported major losses, and some were forced to shut down.
According to Mustard Insights, about 85% of businesses saw their operations cost surge due to inflation.
The report also reveals that for companies listed on the Nigerian Exchange (NGX) in 2024, all companies analysed saw their direct costs increase by 50% or more. About 20% even had their direct costs increase by over 100% in 2024.
CBN report shows multiple business challenges
As the macroeconomics worsens, a lot of businesses are grappling with multiple unforeseen challenges.
The FX market volatility, naira depreciation and rising inflation are some of the most obvious ones. A recent CBN report identified several other challenges including high and multiple bank charges.
The report titled ‘Business Expectation Survey (BES)’ covered the last couple of months of 2024 especially December 2024.
Experts continue to call on the apex bank to moderate its stance on monetary policies and adopt more accommodating policies in the interest of businesses, but the CBN has insisted on sticking to orthodox methods.
Nigerian businesses sink into more debt
Much of these debts were due to a spike in operating costs driven by inflation, and a rise in loan interests driven by the CBN’s raised interest rates among others.
One of these companies had a 165% growth in its debts, despite what may have been described as a fairly successful year.
