By Jude Dike, PhD
The government wants more taxpayers. The economy needs more successful businesses. But who is counting the businesses that never grow because the cost of surviving has become the cost of doing business?
There is a Nigerian economic miracle hiding in plain sight. It does not have a presidential convoy. It does not ring the opening bell at the stock exchange. It does not command billion-naira inauguration ceremonies or generate the kind of headlines reserved for oil discoveries, foreign investment announcements and billion-dollar infrastructure projects.
It opens before sunrise. It sells tomatoes in a market in Kano. It repairs phones in Computer Village, Lagos. It processes cassava in a rural community in Enugu. It makes clothes in Aba, delivers food in Abuja, welds gates in Kaduna and runs a pharmacy in Port Harcourt.
It is Nigeria’s small-business economy.
And it may be one of the country’s most systematically underestimated economic assets.
Millions of Nigerians are attempting to build businesses in an environment where electricity can become a second rent, credit can become a luxury, transport can swallow a profit margin and the wrong encounter with a public official can turn an ordinary working day into an expensive negotiation.
These entrepreneurs are called the backbone of the economy whenever a government speech requires a sympathetic sentence.
But when policy is designed, they are too often treated as an afterthought: people to register, people to tax, people to regulate, people to encourage to become formal.
Here is the question nobody is asking loudly enough: What is the economic cost of making it so difficult for a small Nigerian business to become a big Nigerian business?
Not the cost of starting one. Not the number registered. Not the number invited to a government empowerment programme.
Because a country cannot industrialise if its entrepreneurs spend their best years trying to survive rather than trying to scale.
And a government cannot tax prosperity into existence by making the production of prosperity more expensive.
THE NUMBERS THAT SHOULD KEEP THE FINANCE MINISTRY AWAKE
Consider the financing problem.
In December 2025, the World Bank approved a $500 million financing package for Nigeria’s Fostering Inclusive Finance for MSMEs project, designed to expand access to finance for micro, small and medium-sized enterprises.
The World Bank’s announcement described MSMEs as accounting for most Nigerian businesses, nearly half of GDP and a large share of employment. Yet fewer than one in 20 MSMEs had access to bank credit. Loans were often costly and short-term, while collateral requirements excluded otherwise viable businesses.
Read that again.
A sector responsible for a substantial share of the country’s economic activity has extremely limited access to the financial system it needs to expand.
This is not merely a banking problem. It is an industrial-policy problem. A manufacturer cannot purchase modern equipment without suitable financing. A food processor cannot reliably increase output without working capital. A small technology company cannot hire skilled workers if every expansion decision must be funded from the owner’s personal savings.
And a business that cannot borrow on reasonable terms cannot easily move from one shop to three, from three employees to 30, or from serving one neighbourhood to exporting across borders.
The result is an economy full of entrepreneurs but short of enterprises capable of employing people at scale. Nigeria does not lack ambition. It lacks a sufficiently accessible financial architecture for turning ambition into productive capacity.
THE ENTREPRENEUR PAYS A TAX NOBODY HAS BUDGETED FOR
Now consider the cost of keeping the lights on. For a small Nigerian business, electricity is not simply an input. It can determine whether the business is profitable at all. A barber must power clippers. A tailor must run sewing machines. A cold-room operator must protect inventory. A welder must power equipment. A food seller may need refrigeration to prevent stock from spoiling.
When reliable electricity is unavailable, the entrepreneur must find an alternative: a generator, fuel, repairs, batteries, an inverter or solar equipment.
That is capital that could have purchased more stock, employed another worker, improved product quality or financed a second location.
The same logic applies to transport. When moving goods becomes more expensive, the business must absorb the cost, raise prices or accept lower margins. When borrowing costs are high, the entrepreneur delays expansion. When rules are unpredictable, the business keeps less money available for productive investment and more for emergencies.
These costs do not always appear on a government tax receipt. But they behave like taxes.
They reduce the amount of money left after production. They raise the minimum price a business must charge. They discourage investment. And they make it harder for smaller firms to compete with larger businesses that can spread their costs across more customers.
Let us call this what it is: the survival tax.
It is not one official levy. It is the accumulated burden of the obstacles that make productive activity more expensive than it needs to be.
Unlike a conventional tax, it does not necessarily finance a public service. It may simply disappear into fuel purchases, equipment breakdowns, financing charges, delays and lost sales.
And unlike a statutory tax, it can be difficult to measure. That does not make it economically insignificant. It makes measuring it a public-policy priority.
WHEN GOVERNMENT MEETS THE MARKET WOMAN
Nigeria’s debate about taxation has reached an important moment. The government needs revenue to finance infrastructure, security, healthcare, education and other public services. A functioning state cannot operate on declarations of national potential.
But the way a government raises revenue matters almost as much as the amount it collects.
In January 2026, Nigeria’s Ministry of Finance announced a presumptive-tax framework intended to simplify the treatment of eligible informal-sector businesses. The framework exempts nano and small businesses with annual turnover of ₦12 million or less from tax and provides for a 1 per cent turnover tax for other eligible informal businesses, alongside provisions intended to eliminate cash-based collections and informal roadside enforcement.
The framework also aims to support the transition of informal enterprises into the formal economy.
That is a potentially important reform.
Yet the test is not whether the policy reads well in a press release. The test is what happens when it meets the trader, the artisan, the roadside mechanic and the family-owned workshop.
Does the entrepreneur understand the rules? Is the same business being approached by multiple authorities for overlapping payments? Can the owner verify that a levy is lawful? Is there a simple way to challenge an assessment? Can the business comply without hiring an accountant it cannot afford?
And does formalisation unlock something valuable in return?
A business owner will have little reason to trust a system that demands records, payments and registration but offers no meaningful improvement in access to finance, reliable infrastructure, legal protection or public services.
The point is not that small businesses should never pay tax. The point is that tax administration should help productive businesses enter the formal economy, not make informality their safest survival strategy.
A fair tax system widens the productive base over time. A predatory or confusing one can undermine it. Nigeria needs to know which system it is building.
THE TRAP: MILLIONS OF BUSINESSES, TOO FEW GROWING COMPANIES
Here is the deeper economic problem.
A country can have an enormous number of businesses and still fail to develop enough productive firms. The number of people selling goods or providing services tells us something about economic activity. It does not, by itself, tell us how many businesses are increasing productivity, introducing new technology, creating stable jobs or competing internationally.
A person selling goods from a roadside stall is working. That work deserves dignity and protection. But if that person wants to transform the stall into a distribution company employing 50 people, the country should make that transition possible.
Nigeria must stop measuring entrepreneurship mainly by how many people start businesses and begin measuring how many businesses successfully grow.
How many firms survive five years?
How many graduate from microenterprise to small business, and from small business to medium-sized enterprise? How many create formal jobs? How many invest in machinery, digital systems and worker training? How many enter regional and international supply chains? How many can obtain affordable credit without pledging assets their owners do not possess?
These are the questions that reveal whether entrepreneurship is becoming an engine of development or merely a mechanism for surviving unemployment.
A country that celebrates self-employment while millions of businesses remain unable to expand may be mistaking economic resilience for economic success.
Nigerians are resourceful enough to create livelihoods in extraordinarily difficult circumstances. The state’s responsibility is to make those livelihoods more productive, secure and capable of growing.
THE RADICAL PROPOSAL: A NATIONAL SURVIVAL-TAX AUDIT
Here is my proposal. Nigeria should establish a National Small-Business Cost Audit, independently conducted and published every year alongside the federal budget.
Its purpose would be to measure what it actually costs a representative Nigerian business to operate, comply with regulations and expand.
The audit should examine at least six areas:
* Power: the cost of grid electricity, alternative power, fuel, maintenance and outages.
* Finance: interest rates, collateral requirements, loan rejection, fees and access to working capital.
* Tax and levies: the number of payments demanded, the legal basis for each payment, compliance costs and disputes with tax authorities.
* Logistics: transport, storage, market access, delays and damage to goods.
* Regulation: the time and money required to register, obtain permits, meet standards and resolve administrative problems.
* Growth: the proportion of firms surviving, investing, hiring, exporting and graduating into larger business categories.
The exercise should not rely exclusively on questionnaires circulated among large firms in Abuja or Lagos. It should sample businesses across states, sectors and sizes, including women-owned enterprises, rural businesses, informal traders and young entrepreneurs.
The methodology, sample size, limitations and findings must be public. An independent panel of statisticians, economists, business associations and civil-society representatives should scrutinise the results.
The goal is to identify which costs are unavoidable, which are excessive and which exist because government policy has failed.
Then comes the difficult part.
Every major new regulation affecting small businesses should include a published assessment of its compliance costs and expected effects on business formation, survival, employment and investment.
Where a regulation imposes disproportionate costs on small firms, government should redesign it, simplify compliance or provide a proportionate transition period. The state should have to explain the burden it creates not merely the revenue or administrative benefit it expects.
That is a fundamental change in the relationship between government and enterprise.
STOP GIVING OUT LOANS WITHOUT FIXING THE SYSTEM
Nigeria’s $500 million MSME financing initiative is an opportunity, but credit alone cannot solve every problem.
A business that borrows money to buy equipment still needs electricity to run it. A farmer who obtains working capital still needs storage, transport and buyers. A manufacturer who receives a loan still needs predictable regulations and access to markets.
Giving credit to a business trapped in an uncompetitive operating environment can leave the owner with debt rather than growth. The government should therefore link financing programmes to a broader productivity compact.
First, expand credit guarantees through transparent, independently evaluated mechanisms that encourage banks to lend to viable smaller businesses without requiring impossible collateral.
Second, publish the performance of participating lenders: how many firms receive credit, how many are women-owned, what the financing costs, how many jobs are created and how many borrowers remain viable.
Third, use public procurement to create genuine opportunities for qualified Nigerian small businesses. Government agencies should publish contract opportunities, simplify bidding requirements proportionately and report payment delays.
A small company should not have to wait months for payment after delivering goods or services to the government. Public procurement that destroys a supplier’s cash flow is not industrial policy. It is an unpaid loan extracted from the private sector.
Fourth, invest in shared infrastructure: industrial clusters with reliable power, storage facilities, testing laboratories, logistics hubs and digital services. These can lower costs for many businesses simultaneously.
Fifth, establish a single, verifiable digital system for eligible business levies and regulatory payments, with official receipts, clear appeal mechanisms and strict accountability for unlawful collections.
Digitalisation alone will not eliminate abuse. But it can reduce opportunities for opaque demands and make compliance easier to verify.
The principle is straightforward: public support should be tied to measurable improvements in productive capacity, not to the number of cheques distributed or ceremonies conducted.
A REVOLUTION IN HOW NIGERIA MEASURES ECONOMIC SUCCESS
Nigeria should set a national target for increasing the number of small firms that survive, grow and employ workers productively.
The target should be based on a credible baseline rather than an invented headline number. It should include annual milestones and independent evaluation.
Federal and state governments should compete on results. Which state has reduced the time and cost required to establish a compliant business? Which has improved access to reliable power for commercial clusters? Which has reduced unlawful levies? Which has helped more firms secure finance and create durable jobs?
Publish the rankings. Publish the methodology. Publish the failures.
And where a programme fails to deliver, stop funding it merely because it carries a familiar name.
The national conversation must also move beyond counting the money allocated to entrepreneurship programmes. We should count the businesses that became more productive because of them.
We should count the workers hired, the goods manufactured, the exports earned, the financing costs reduced and the firms that survived an economic shock without collapsing.
This is how an economy moves from celebrating hustle to building prosperity.
THE AFRICAN QUESTION
Nigeria is not alone. Across Africa, the challenge is to convert a vast landscape of informal work and small enterprises into more productive firms without destroying the livelihoods on which millions of households depend.
Formalisation must be a bridge, not a trap.
It should provide a pathway to credit, insurance, enforceable contracts, training, social protection and wider markets. It should not merely bring more people into a system of fees and obligations they cannot understand or afford.
African governments also need to recognise that small businesses are not all the same. A street trader, a digital start-up, a smallholder farmer and a manufacturer face different constraints and need different policy responses.
The right question is not how to make every business identical.
It is how to create conditions in which viable enterprises can become more productive, hire more people and participate in the wider economy.
That is the real promise of an African single market and deeper regional trade: not simply moving more goods across borders, but enabling African businesses to grow beyond the limits of their immediate neighbourhoods.
THE RECEIPTS, PLEASE
In The Missing Ledger Behind Nigeria’s Fuel Subsidy Removal, we asked what happened to the savings and who bore the burden of reform.
In Nigeria Is Not Poor. Why Are Nigerians Poor?, we confronted the distance between national resources and household prosperity.
In Dangote IPO: The Day Nigerians Could Start Owning the Machine Making Their Wealth, we explored the question of who owns productive assets.
In The Nigerian Economy Is Running on Borrowed Money. And Nobody Wants to Talk About Who Is Paying for It, we examined the obligations passed to the future. And in The Child Bride Economy Nobody Is Counting, we considered the human potential lost when the conditions for a productive future are denied to a child.
This column brings those questions to the Nigerian business owner. Who pays for an economy in which the entrepreneur must finance public-service failures privately?
Who pays when a viable business cannot obtain credit?
Who pays when an enterprise remains too small to create jobs because its owner is fighting to keep the lights on? Who pays when a trader is expected to become formal but receives none of the benefits that formalisation is supposed to unlock?
The answer is the business owner, the worker, the consumer and, eventually, the country. The owner pays through lower profits. The worker pays through fewer jobs and weaker earnings. The consumer pays through higher prices. The government pays through a narrower base of productive, taxable enterprises.
And the country pays through industrialisation postponed.
THE FINAL QUESTION
Nigeria has spent years debating how to extract more value from oil, how to finance public expenditure and how to attract investors with the capacity to build enormous industrial projects.
Those debates matter. But national development cannot depend exclusively on a few large companies, however impressive their investments may be.
A resilient economy needs thousands of businesses capable of producing goods, providing services, employing workers, paying taxes and expanding into new markets.
It needs entrepreneurs who can take a calculated risk without gambling their family’s entire future.
It needs a government that understands the difference between collecting revenue from economic activity and creating the conditions that allow economic activity to multiply.
Most of all, it needs to stop treating the small business as a permanent symbol of Nigerian resilience and start treating it as an enterprise with the right to grow.
The market woman should not have to remain a market woman because the system has made expansion impossible. The mechanic should not have to remain a one-man operation because formal credit is beyond reach. The manufacturer should not have to spend more energy navigating administrative obstacles than improving the product.
There is nothing romantic about an economy in which millions of people work extraordinarily hard merely to remain where they are.
Resilience is admirable. But resilience should be the bridge to prosperity, not the excuse for tolerating the conditions that make prosperity so difficult.
Nigeria does not merely need more entrepreneurs. It needs an economy in which entrepreneurs can become employers, employers can become manufacturers, and manufacturers can become globally competitive companies.
That transformation will not happen because government tells people to work harder. It will happen when policy makes productive work more rewarding, business expansion more attainable and economic rules more predictable.
The ultimate measure of Nigeria’s economic reforms is not how much money the government raises from its citizens. It is how much more capable those citizens become of creating wealth. Because the most important business Nigeria must build is not another government programme.
It is an economy where a small business has a fair chance of becoming a big one. And until we start counting the businesses that never get that chance, we will continue to mistake the survival of Nigerians for the success of Nigeria.
That is the bill nobody is presenting. And it is time the country demanded the receipts.
About the Columnist
Dr. Jude Dike is a Nigerian-Canadian economist, public policy analyst, and best-selling author. As the columnist behind What Nobody Is Saying he brings a distinctive blend of academic expertise, government experience, international development insight, and public-policy analysis to the national conversation.
With a PhD in Economics and a master’s degree in Oil and Gas Economics from the United Kingdom, the columnist has built a versatile career spanning academia, government, international development, and policy advisory. His professional experience includes serving as a college professor, World Bank consultant, senior legislative aide, senior government adviser, political strategist and public policy analyst.
Drawing on this broad experience, What Nobody Is Saying offers incisive, independent commentary on Nigeria’s economy, politics, governance, public policy, energy sector, and the forces shaping the country’s future. Styled in the tradition of serious, analytical newspaper commentary, the syndicated column seeks to examine the issues beneath the headlines, challenge conventional thinking, and give voice to perspectives that often go unspoken.
As a Nigerian-Canadian with extensive international exposure and deep knowledge of Nigeria’s political economy, Dr. Dike brings a uniquely cross-cultural perspective to the country’s most consequential debates, asking not merely what is happening, but what nobody is saying about why it is happening and where it may lead.
