A litre of petrol now costs over ₦1,100. A modest shop on Lagos Island can take up to 500,000 naira in monthly rent. Running a single generator for one week can swallow around 20,000 naira in fuel. For thousands of small business owners across Nigeria, these figures are not distant economic indicators. They are daily survival costs. Long before a customer makes a purchase, entrepreneurs are already spending heavily just to stay operational. In many cases, keeping the lights on now costs more than paying salaries or restocking shelves.

Fuel and power, everyday struggle

Energy remains one of the biggest pressures on small businesses. With power outages still common, many shops, salons, and workshops rely almost entirely on generators. Petrol prices hovering around ₦1,100 per litre mean that daily operating costs continue to climb. Businesses that run generators for several hours a day can spend significant portions of their earnings on fuel alone. Rising transport costs are also reshaping logistics. A BusinessDay report in 2024 showed that distribution expenses rose by more than 60 percent within a year, affecting retailers, food vendors, and service providers alike.

Rent, logistics, and the impact of forex

Securing business space has become increasingly difficult. In major cities such as Lagos, Abuja, and Port Harcourt, rent can consume as much as 40 percent of revenue. Landlords often demand multiple months of advance payment, limiting working capital and slowing expansion plans. At the same time, poor road infrastructure continues to drive up logistics costs. A report by the Federal Roads Maintenance Agency indicates that large sections of Nigeria’s road network remain in poor or critical condition, leading to delivery delays and higher vehicle maintenance expenses.

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Foreign exchange volatility adds further uncertainty. Many small businesses depend on imported inputs such as packaging materials, spare parts, or machinery. Fluctuations between official and parallel market rates make planning difficult. The Manufacturers Association of Nigeria noted in 2025 that forex instability contributed to losses running into trillions of naira for import-dependent firms.

Taxes, insecurity, and the fight to stay afloat

Beyond operational costs, entrepreneurs face multiple taxes and levies at the federal, state, and local levels. These include value-added tax, business permits, signage fees, and various informal charges. A 2024 survey by a global consultancy identified tax burden as a major constraint for micro and small enterprises. Insecurity also continues to shape business decisions. Theft, vandalism, and attacks along transport routes have pushed many owners to invest in private security or limit operating hours, reducing potential revenue.

Holding on in an uncertain economy

For many small business owners, planning has become shorter and more cautious. Expansion decisions are delayed, staff strength is adjusted, and inventory cycles are tighter than they were a few years ago. Some entrepreneurs are switching to smaller spaces, reducing operating hours, or turning to digital platforms to cut logistics and rent costs. Others are exploring cooperative buying arrangements to manage rising input prices.

Despite the pressures, small businesses remain central to Nigeria’s economic life. They provide employment, support local supply chains, and keep neighbourhood economies active. 

Cynthia Nwanonyiri