Microenterprises play a vital role in economic development and poverty alleviation efforts around the world. In developing economies particularly, microenterprises are promoted as drivers of innovation and competition and are often the main source of livelihood for a vast number of households. This is particularly the case in Nigeria, where approximately 40 million microenterprises are operating, accounting for three quarters of the country’s workforce and half of the country’s economic output. Despite their significance, microenterprises in Nigeria face numerous challenges that limit their economic participation and growth.
Digital technologies provide an opportunity to overcome some of the challenges that Nigerian microenterprises face, providing new avenues to access information, markets, suppliers, business tools and support channels. The country is well placed to realise these benefits, being a continental leader in digitalisation and a proven success story in developing innovative, homegrown digital solutions to meet consumer needs. However, currently, most microenterprises operate completely outside of the digital economy and are unable to benefit from digitalisation trends. Unless this is addressed, further advances in the prominence of the digital economy will lead to further economic marginalisation of Nigerian microenterprises.
This study aims to provide a better understanding of microenterprises in order to identify the country’s digital access and use challenges. This study equally aims to provide an evidence base that can be harnessed to develop policies that will equip and allow microenterprises to integrate into the digital economy, improve their own potential and boost sustainable development in Nigeria. The report draws on a survey of 718 microenterprises across Nigeria funded by the World Bank. The survey has been completed in seven African countries across Western, Eastern and Southern Africa. It provides a detailed account of the extent and manner in which microenterprises engage with digital technologies, as well as the specific barriers and limitations faced in this regard.
The report culminates in targeted policy interventions, which will go a long way in addressing the core demand-side constraints that are holding back microenterprise digitalisation in Nigeria. If implemented, digital innovations could serve as a driving force to boost the Nigerian microenterprise sector and result in substantial economic development gains in the national economy while contributing significantly towards economic inclusion and poverty alleviation efforts.
