A report by Nigerian data company Mustard Insights has revealed that 44 percent of business owners in Nigeria reduced their workforce in 2024.
According to the report, the findings, based on a survey of over 100 business owners, executives, and industry leaders, offer a comprehensive look at how the year’s challenging economic conditions affected organisations of varying sizes.
“The year 2024 was no doubt a challenging one for businesses operating in Nigeria. The country’s economy faced significant disruptions following the removal of fuel subsidies, the devaluation of the naira, and a surge in inflation, among others.
“These factors contributed to skyrocketing costs of essential commodities such as food, power, and transportation, making survival a daunting task for individuals and businesses. Many companies had to put their expansion plans on hold, while some were forced to shut down, divest, or report major losses,” the report said.
The report, titled Nigeria’s Business Survival Report 2024: Strategies for Sustainable Business Growth Amid Economic Turbulence, first provided a broad macroeconomic overview and a schematic visualisation of the combination of factors responsible for the country’s cost of living crisis.
It also offers a comprehensive analysis of how businesses performed between 2023 and 2024, detailing how the economic downturn affected revenue, direct costs, and job retention, among others while also providing industry sentiment and projected outlook from business owners and top executives.
Additionally, it presents insights into the strategic responses companies adopted to navigate the tough market conditions.
The report disclosed that 85.4 per cent of companies reported a substantial increase in business costs due to inflation, while 65 per cent of businesses increased the prices of their goods/services.
It stated that 41.7 per cent of businesses diversified their product/service offerings and 46.6 per cent of businesses failed to meet growth targets, amongst others.
While the findings in the report are derived from extensive research and the direct input of business leaders, entrepreneurs, and industry stakeholders, it also covers an in-depth comparative analysis of Q3 results for the last three-year period (2022, 2023, and 2024) to assess comparative changes in revenue, direct costs, total expenses, and salaries of a sample of Nigeria’s top-listed companies on the NGX-30.
An excerpt of the report reads, “Similar to survey insights where raw material cost was identified as the highest cost element (input costs), analysis of NGX companies revealed a significant increase in costs in the year 2024 compared to 2023, compared to the rise in direct costs from 2022 to 2023.
“While between 2022-2023 y-o-y, 70 per cent of listed companies experienced only less than a 50 per cent increase in direct costs, 20 per cent experienced a 51 per cent to 100 per cent increase in direct costs, and only 10 per cent had above 100 per cent increase in costs, in YTD Q3 2024 compared to the same period in 2023, 80 per cent of companies experienced as much as 51 per cent to 100 per cent increase in costs and 20 per cent experienced above 100 per cent increase in direct costs.
“None of the analysed companies experienced less than a 50 per cent increase in direct costs in 2024.”
The data company explained that by evaluating the strategies employed by these larger entities, it provides a benchmark for businesses seeking sustainable growth in a volatile economy.
The report also revealed content analysis culled out of news reports isolating the key obstacles the largest companies in the nation encountered, including economic, regulatory, and operational difficulties, as well as the strategies they employed to navigate these challenges amidst both local and global pressures.
“By providing data-driven insights and actionable recommendations, Nigeria’s Business Survival Report 2024 serves as an invaluable resource for businesses looking to adapt, grow, and thrive despite economic uncertainty,” Mustard Insights said.
