Their role is both significant and indispensable. Yet, despite this considerable contribution, many continue to operate below their full potential, constrained not by ambition or capability, but by structural barriers that limit their ability to scale.

This tension between potential and constraint was at the heart of discussions I participated in last month in London, at the “Leveraging Youth Development, Innovation and Entrepreneurship” event on the sidelines of President Tinubu’s UK–Nigeria State Visit.

Convened in partnership with Nigeria’s Ministry of Youth Development, the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), and the UK Department for Business and Trade, the gathering brought together policymakers, investors, and operators from both countries.

The message was clear: Nigeria’s SMEs and youth-led businesses represent one of the country’s most powerful levers for economic transformation, but unlocking that potential will require more deliberate and coordinated support.

As things stand, SMEs in Nigeria continue to face a set of well-defined and persistent constraints. Access to financing is still uneven, particularly for businesses without the collateral or operating history traditional institutions require.

Market access remains fragmented, making it difficult for many to reach customers beyond their immediate environment.

Infrastructure challenges, from inconsistent power supply to limited logistics networks, continue to drive up the cost of doing business, while uneven access to digital tools leaves many operating without the systems needed to scale effectively.

There is, however, a strong and concentrated effort to address these issues. SMEDAN is increasingly focused on providing practical support, connecting businesses to mentorship, improving access to funding, and working to close some of these structural gaps.

In parallel, the Ministry of Youth Development is investing in long-term capacity building through initiatives like the Nigerian Youth Academy, which has already enrolled over 400,000 young people across digital and physical platforms.

This domestic effort is also being reinforced by growing international engagement, particularly from the United Kingdom.

As a global financial hub, the UK plays a huge role as a supporting partner by bringing depth in capital markets, regulatory clarity, and access to global networks that Nigerian businesses can leverage as they scale.

This corridor has clearly been successful, with London now hosting more Africa-headquartered companies on its Stock Exchange than New York, and UK investors accounting for a significant share of capital inflows into Nigeria, supporting an ecosystem that has produced 75% of Africa’s unicorns.

Importantly, this engagement is evolving beyond capital into more structured forms of collaboration. Initiatives such as the UK–Nigeria Tech Hub continue to build talent and support founders, while digital access programmes are expanding connectivity and enabling participation in the digital economy.

The planned UK-supported startup sandbox in Nigeria is particularly noteworthy, as it reflects a shift toward creating environments where innovation can be tested and scaled within a supportive regulatory framework.

However, while the alignment between local and international governments and their agencies is encouraging and clearly underscores and validates the strength and potential of Nigerian startups, it cannot carry the full weight of what is required.

Government initiatives and international partnerships can lay the groundwork, but sustained growth will depend on how actively the private sector builds on that foundation.

What is needed is a broader, ecosystem-wide commitment by the private sector to build the structures and services that enable growth, particularly for SMEs. Without this, many SMEs will remain constrained, isolated, and unable to compete at scale.

For example, take financial services, particularly cross-border payments, which is an area where progress has been made, but not yet at the pace required. For many SMEs, the ability to move money efficiently across borders remains a significant constraint.

Traditional banking systems are often not designed with smaller businesses in mind, requiring extensive documentation, limiting access to foreign exchange, and introducing delays that can stretch transactions over several days or even weeks.

In response, fintech providers like Verto, are building more tailored alternatives, solutions that remain secure and compliant, while simplifying onboarding for SMEs and enabling access to faster, more cost-effective payment rails.

Reducing this friction is critical, as it allows businesses to operate more efficiently and engage more confidently in international trade.

The same approach needs to be applied more broadly. Access to funding cannot continue to depend on collateral-heavy models that exclude otherwise viable businesses; more practical indicators like cash flow and transaction history need to be taken seriously.

At the same time, technology should work for SMEs, not overwhelm them, tools need to be simple, affordable, and built around how these businesses actually operate day to day.

Market access also has to become more deliberate, with clearer and more reliable routes into supply chains, export markets, and procurement opportunities, rather than leaving businesses to navigate these paths alone.

Alongside this, addressing everyday infrastructure constraints, whether through shared logistics, embedded services, or practical partnerships, can significantly reduce the operational burden that slows growth.

At the end of the day, supporting SMEs is not an act of charity; it is a mutually beneficial business opportunity with wide-reaching economic outcomes.

These businesses are already creating value at scale, driving employment, expanding markets, and building solutions to real challenges. The opportunity now is to ensure the environment around them evolves just as deliberately, to ensure sustained growth and scale.

This was driven by a strengthened fiscal position and an enhanced foreign exchange market.

Revealed in the World Bank’s Nigeria Development Update, titled “Building Momentum for Inclusive Growth,” on Monday, the report noted that Nigeria’s growth surged to 4.6% year-on-year, bringing the nation’s growth for 2024 to 3.4%, the highest since 2014.

The fiscal deficit reduced from 5.4% of GDP in 2023 to 3.0% of GDP in 2024, a result of a significant rise in national revenue, which increased from N16.8 trillion in 2023 to N31.9 trillion in 2024.

Despite these positive developments, the report pointed out that inflation remains high but is expected to decrease to an average of 22.1% in 2025, driven by ongoing reforms.

Taimur Samad, acting World Bank country director for Nigeria, commented on the progress:

“Nigeria has made impressive strides in restoring macroeconomic stability. With improvements in the fiscal position, Nigeria now has a historic opportunity to enhance development spending, focusing more on human capital, social protection, and infrastructure. The allocation of public resources can begin to shift away from past unsustainable practices and instead address Nigeria’s large development needs, with the government playing a crucial role in providing basic public services and enabling private sector-led growth.”

The report emphasizes the importance of rebalancing the country’s focus towards sectors and firms that are most productive, generate positive spillovers, and create job opportunities to help achieve the government’s goal of a $1 trillion economy by 2030.

Although the report highlighted the finance and ICT sectors among the most productive, it also noted the limited job opportunities challenging the sector.

Calls for addressing the infrastructure deficit in electricity and transportation were made, in order to foster healthy competition, and improve access to finance through a private-sector-led, public-sector-facilitated growth strategy to sustain progress.

Going by the World Bank’s prediction, the country’s economy will record about 0.4 percentage points higher than the 2.9 per cent it is expected to have closed last year.

The projection is slightly behind that of sub-Saharan Africa (SSA), which is to expand by 3.8 per cent but far modestly above the estimated global average (2.3 per cent).

In its Global Economic Prospect (GEP), the World Bank remains bullish on Nigeria, with the economy expected to firm further to 3.7 per cent next year, over one percentage mark-up over global output growth.

The latest projections for 2024 and 2025 are way above June forecasts, which were three and 3.1 per cent respectively, re-validating the global bank’s rising confidence in the prospect of the economy since downstream oil and foreign exchange reforms that started the mid-last year.

The bank said the macro-fiscal reforms that started in June are gradually bearing fruits, saying per capita income will reach its pre-pandemic level in 2025. Growth, it noted, would be driven mainly by agriculture, construction, services and trade.

On inflation, the report records that Nigeria’s economy will “gradually ease as the effects of last year’s exchange rate reforms and removal of fuel subsidies fade” with the structural reforms expected to boost fiscal revenue.

“Growth in SSA is expected to accelerate to 3.8 per cent in 2024 and firm further to 4.1 per cent in 2025 as inflationary pressures fade and financial conditions ease. The projections for regional growth in 2024 and 2025 are little changed from June forecasts, but these aggregates mask a mix of upgrades and downgrades at the country level.

“While growth in the largest economies in SSA is expected to lag the rest of the region, non-resource-rich economies are forecasted to maintain a growth rate above the regional average. Excluding the three largest SSA economies, growth in the region is expected to accelerate from 3.9 per cent in 2023 to 5 per cent in 2024 and a further 5.3 per cent in 2025,” the report said about Africa.

The report said this year would mark the slowest growth in 30 years but that the global economy is in a better stead than it was a year ago.

It cautioned that the mounting geopolitical tensions could create fresh near-term hazards for the world economy if adequate measures are not taken.

“Without a major course correction, the 2020s will go down as a decade of wasted opportunity. Near-term growth will remain weak, leaving many developing countries – especially the poorest – stuck in a trap: with paralyzing levels of debt and tenuous access to food for nearly one out of every three people.

That would obstruct progress on many global priorities. Opportunities still exist to turn the tide.

This report offers a clear way forward: it spells out the transformation that can be achieved if governments act now to accelerate investment and strengthen fiscal policy frameworks,” said Indermit Gill, World Bank Group’s Chief Economist and Senior Vice President. (The Guardian).