Entrepreneurship, Innovation, and Sustainable Economic Growth in Nigeria: Evidence and Strategic Directions from 2014-2024

Abstract

This paper investigated how entrepreneurial activity within Nigeria’s micro, small and medium enterprise (MSME) sector contributes to job creation, income growth and structural poverty reduction over the period 2014–2024. Drawing on national datasets from the National Bureau of Statistics and SMEDAN, programme evaluations (YouWiN, N-Power and GEEP) and relevant empirical studies, the analysis is grounded in Schumpeterian innovation theory, the Resource-Based View and Institutional Theory to explain how firm capabilities and the enabling environment shape inclusive development outcomes. The evidence indicates that MSMEs account for 46.3% of GDP and 87.9% of formal employment in Nigeria, and that entrepreneurial engagement is positively associated with poverty reduction (r = 0.62, p < 0.01). Notwithstanding these contributions, the sector is constrained by a structural financing gap estimated at US$32.2 billion, with only 4% of firms accessing formal bank credit. Although initiatives such as GEEP and the Development Bank of Nigeria have improved liquidity, persistent institutional fragmentation, limited regulatory coherence and weak monitoring and evaluation systems continue to impede scale and the durability of poverty-reduction gains. While digital and AI-enabled tools are strengthening enterprise capabilities, uneven infrastructure and access risks reproducing existing inequalities. The paper concludes that short-term grants like TraderMoni, farmermoni, conditional cash transfers and other governmental interventions, though important for relief, are insufficient for structural transformation; sustained poverty reduction requires ecosystem-oriented policy that integrates blended finance and fintech partnerships, targeted gender and youth inclusion, and regulatory simplification and evidence-based monitoring and feedback systems.