The number of small-scale industrialists in Nigeria has experienced a significant decline over the past two years as businesses grapple with economic challenges. According to the 2023 Social Statistics Report by the National Bureau of Statistics (NBS), the number of small-scale industrialists decreased by 45 per cent, from 246,200 in 2020 to 170,098 in 2022. This downturn poses a major challenge to Nigeria’s goal of becoming a one trillion-dollar economy, given the crucial role small-scale industries play in driving economic growth.
In 2020, Nigeria had 246,200 small-scale industrialists. This number fell to 213,402 in 2021, and further to 170,098 in 2022. The NBS report does not specify reasons for this sharp decline, but several factors are likely involved: economic instability, policy and regulatory challenges, limited access to finance, infrastructure deficiencies, and the impact of the COVID-19 pandemic. There is also a possibility that some SMEs have either downsized to micro-businesses or, less likely, expanded into large-scale industries.
The decline in small-scale industrialists has far-reaching implications for Nigeria’s economy. Small-scale industries are vital for employment, GDP contribution, and fostering innovation and entrepreneurship. A 45 per cent reduction in this sector could lead to higher unemployment, less economic diversification, and reduced economic resilience. This situation underscores the need for targeted support to small businesses, which are essential for economic growth and job creation.
The education sector consistently recorded the highest number of small-scale industrialists, despite a downward trend. In 2020, the sector had 56,321 small-scale industrialists, which decreased to 49,749 in 2021, and further dropped to 39,876 in 2022. This 29 per cent decrease suggests significant challenges, likely due to reduced funding, policy shifts, and the COVID-19 pandemic.
The real estate sector saw a substantial reduction, with 19,956 small-scale industrialists in 2020 dropping to 12,720 in 2021, and then to 8,313 in 2022. The sector experienced a 58 per cent decline, reflecting broader economic challenges and possible impacts of policy changes or market conditions.
The agriculture sector experienced a relatively moderate decline, from 39,109 small-scale industrialists in 2020 to 36,431 in 2021, and slightly declining to 36,348 in 2022. This 7 per cent decline suggests resilience, possibly due to government support and promotion of agricultural activities.
The ICT sector saw a pronounced decline, with the number of small-scale industrialists decreasing from 33,842 in 2020 to 28,816 in 2021, and further dropping to 23,101 in 2022. The sector faced a 32 per cent reduction, likely influenced by technological and market shifts.
The manufacturing sector showed significant vulnerability, with numbers decreasing from 27,723 in 2020 to 20,736 in 2021, and further to 17,450 in 2022. The sector experienced a 37 per cent decrease, possibly due to supply chain disruptions, economic policies, and increased production costs.
The mining sector faced a modest decline, from 24,852 small-scale industrialists in 2020 to 22,721 in 2021, and slightly declining to 22,522 in 2022. The 9 per cent decline indicates some stability, likely due to increased extraction activities and investments, despite regulatory changes and fluctuating commodity prices.
The wholesale and retail trade sector saw a significant reduction, with 44,397 small-scale industrialists in 2020 decreasing to 42,229 in 2021, and then sharply dropping to 22,488 in 2022. The sector experienced a 49 per cent decrease, reflecting severe impacts of economic conditions on consumer behavior and business operations, possibly due to reduced consumer spending, market competition, and economic uncertainties.
The 45 per cent decline in the number of small-scale industrialists in Nigeria over the past two years highlights the significant economic challenges facing the country. Addressing these challenges requires targeted interventions to support small businesses, which are crucial for fostering economic growth, employment, and innovation.
