The Challenges Facing Young Entrepreneurs in Nigeria

Nigeria's vibrant youth population represents a wellspring of innovation and entrepreneurial potential, poised to drive the nation's economic growth and prosperity. However, for many young entrepreneurs, the journey to success is fraught with formidable challenges that test their resilience and determination.

From limited access to finance to crippling infrastructure deficits and complex regulatory hurdles, the obstacles facing Nigeria's burgeoning community of young business owners are multifaceted and daunting. Yet, their unwavering spirit and the support of organizations like the Association of Small Businesses of Nigeria (ASBON) offer hope for a brighter future.

Access to Finance

One of the most significant challenges confronting young entrepreneurs in Nigeria is securing adequate financing to fuel their business aspirations. Financial institutions are often reluctant to engage with micro and small enterprises, citing concerns over collateral and the perceived risk of non-repayment.

"Most financial institutions are averse to dealing with micro and small businesses, often citing concerns over collateral or the perceived risk of non-repayment," explains Dr. Femi Egbesola, National Chairman of ASBON.

This reluctance, coupled with the erosion of working capital due to inflation, creates a perfect storm of financial constraints, stifling the growth and potential of young entrepreneurs' businesses.

Power and Energy

Nigeria's epileptic power supply and the exorbitant cost of alternative energy sources, such as generators and diesel, pose a significant challenge for young entrepreneurs. These factors not only impact business operations but also eat into profitability, leaving many struggling to break even.

"Now, with this removal of subsidy, it's very difficult to run your operations with alternative power sources," notes Dr. Egbesola, highlighting the crippling burden of energy costs on small businesses.

Taxation and Regulatory Hurdle

The labyrinth of complex tax regulations and multiple taxation regimes in Nigeria presents another formidable obstacle for young entrepreneurs. Navigating this maze of bureaucracy and compliance requirements can be a daunting task, draining resources and stifling growth.

"We also tell the government we need to begin to tax the fruit and not the seed," emphasizes Dr. Egbesola, advocating for a more supportive taxation framework that nurtures young businesses rather than stifling their growth.

Access to Foreign Exchange

For young entrepreneurs reliant on imported raw materials or seeking to tap into international markets, access to foreign exchange poses a significant hurdle. With limited access to official channels, many are forced to rely on the black market, driving up input costs and hampering competitiveness.

"When you use the black market to import raw materials, it becomes very difficult because it becomes too expensive for the common man," Dr. Egbesola explains, underscoring the impact of forex challenges on small businesses.

Financial Literacy and Management Skills: Bridging the Gap

Alongside the external challenges, many young entrepreneurs in Nigeria grapple with a lack of financial acumen and effective financial management practices. Navigating the complexities of running a successful business requires a solid foundation of financial literacy and robust management skills.

"While our members are passionate entrepreneurs, many still lack the necessary financial acumen to navigate the complexities of running a business effectively," acknowledges Dr. Egbesola, highlighting the need for comprehensive financial education and capacity-building initiatives.

ASBON: A Beacon of Support for Young Entrepreneurs

Amidst these formidable challenges, ASBON stands as a beacon of support, advocating for policy changes, facilitating access to finance, and providing capacity-building programs to empower young entrepreneurs.

Through its engagement with policymakers, regulators, and international organizations, ASBON champions the cause of small businesses, advocating for tax reforms, business-friendly policies, and access to funding opportunities.

"We consistently submit white papers, engage in private dialogues, and leverage media platforms to drive our point across and advocate for the needs of our members," affirms Dr. Egbesola, underscoring ASBON's unwavering commitment to creating an enabling environment for small businesses to thrive.

Furthermore, ASBON's initiatives to facilitate government intervention loans, partner with commercial banks for reduced interest rates, and collaborate with investors and funding platforms provide crucial access to finance for young entrepreneurs.

Recognizing the importance of capacity building, ASBON also offers training and workshops on financial management, partnering with corporate organizations and government agencies to bridge the financial literacy gap.

The nairaCompare and ASBON Partnership: A Catalyst for Growth

In a groundbreaking move, nairaCompare, Nigeria's premier digital financial marketplace, has forged a strategic partnership with ASBON, further bolstering the support ecosystem for young entrepreneurs. This collaboration brings together nairaCompare's innovative fintech solutions and ASBON's extensive network, offering young entrepreneurs access to tailored financial products, services, and literacy initiatives.

"We are excited to embark on this transformative journey with ASBON and contribute to the success of Nigeria's small business community," says Adekunle Akinluyi, CEO of nairaCompare. "Together, we can unleash the full potential of these enterprises, driving innovation, job creation, and economic prosperity for all Nigerians."

Through this partnership, young entrepreneurs will gain access to a comprehensive suite of financial products, including loans, insurance, and investment opportunities, designed to empower their businesses. Additionally, nairaCompare's financial literacy initiatives will equip them with the knowledge and skills to make informed decisions, enabling effective financial management and long-term sustainability.

nairaCompare: nairaCompare is your premier destination for comprehensive financial comparisons. Our platform empowers users to make informed decisions by offering side-by-side evaluations of loans, savings options, and investments. With a focus on key factors such as interest rates, repayment terms, and tailored features, we ensure that you find the perfect financial solution to suit your unique needs.

Conclusion

The challenges facing young entrepreneurs in Nigeria are formidable, but not insurmountable. By fostering a collaborative ecosystem involving the government, private sector, and organizations like ASBON and nairaCompare, we can create an enabling environment that nurtures and supports the aspirations of Nigeria's youth.

It is imperative that stakeholders prioritize access to finance, address infrastructure deficits, simplify regulatory frameworks, and invest in capacity-building initiatives to equip young entrepreneurs with the tools and resources they need to succeed.

By empowering Nigeria's young entrepreneurs, we not only drive economic growth and job creation but also ignite a ripple effect of positive change, transforming communities and shaping a brighter future for generations to come.