A report by Nigerian data company, Mustard Insights, has revealed that 43.7% of business owners in Nigeria reduced their workforce in the year 2024.
Based on a survey of over 100 business owners, executives, and industry leaders, the report shows how the year’s challenging economic conditions have affected organizations of varying sizes.
As part of strategies to survive the economic hardship, the report titled ‘Nigeria’s Business Survival Report 2024: Strategies for Sustainable Business Growth Amid Economic Turbulence’ also revealed that 65% of businesses increased the prices of their goods and services in the year to stay afloat.
Increase in cost
While the findings of the report are derived from research and the direct input of business leaders, entrepreneurs, and industry stakeholders, Mustard Insights said it also covers a comparative analysis of Q3 results for the last three years (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 reveals a significant increase in costs in the year 2024 compared to 2023 compared to the rise in direct costs from 2022 to 2023.”
- The report revealed that between 2022-2023 y-o-y, 70% of listed companies experienced only less than a 50% increase in direct costs, 20% experienced a 51% to 100% increase in direct costs, and only 10% had above 100% increase in costs, in YTD Q3 2024 compared to the same period in 2023.
- It added that 80% of companies experienced as much as 51% to 100% increase in costs and 20% experienced above 100% increase in direct costs.
- Mustard Insights noted that none of the analyzed companies experienced less than a 50% increase in direct costs in 2024.
Some other key insights derived from the survey include:
- 85.4% of companies reported a substantial increase in business costs due to inflation.
- 41.7% of businesses diversified their product/service offerings.
- 46.6% of businesses failed to meet growth targets, amongst others.
What you should know
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, amongst others.
- As of December 2024, the country’s headline inflation had surged to 34.80% according to data released by the National Bureau of Statistics (NBS).
- The Mustard Insights report noted that these factors contributed to skyrocketing costs of essential commodities such as food, power, and transportation, making survival a daunting task for both 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.
