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Survival Challenges for Informal Entrepreneurs in Nigeria
“I contribute daily to my savings group, but I often need to use that money to feed my family, so my savings never really grow,” shares Yiteovie, a self-taught fisherwoman featured in Moniepoint’s 2025 Informal Economy Report. Having left formal education in Senior Secondary School Two, Yiteovie, like many in Bayelsa’s riverine communities, relies on fishing to support her household.
However, when unexpected emergencies arise, how long can Yiteovie’s modest savings sustain her family? The Moniepoint Africa report reveals that nearly 42% of Nigeria’s informal businesses can only endure a single month without any income. Alarmingly, over half of Nigerian startups collapse within their first year, and by year five, 95% have shut down.
Understanding the High Failure Rate of Nigerian Small Businesses
This precarious situation affects a wide spectrum of entrepreneurs-from young e-commerce innovators in Lagos to fashion designers in Aba-who all face constant uncertainty and a high risk of business failure.
Several factors contribute to this trend, including insecurity, inadequate infrastructure, and insufficient market research. Yet, one critical aspect often overlooked is the challenge of acquiring and retaining customers.
The Crucial Role of Customer Acquisition and Retention
Shina Memud, founder of MarTech Africa, one of Nigeria’s premier marketing conferences that convenes over 1,000 professionals annually, emphasizes that mastering customer acquisition, engagement, and loyalty is vital for business longevity.
“Reading the Moniepoint report raises an important question: how can entrepreneurs like Yiteovie expand their reach? What digital tools or platforms can help them attract more customers and avoid being wiped out by unforeseen setbacks?” Memud asks.
As the founder of Yournotify, a marketing automation and growth platform, Memud was motivated to launch MarTech Africa after witnessing many promising small businesses falter due to limited marketing expertise.
MarTech Africa: Empowering Businesses Through Marketing Innovation
Over the past two editions, MarTech Africa has brought together thousands of marketing professionals to learn from industry leaders. At the 2025 summit, experts like Maurice Igugu (CMO, Sterling Bank), Idemudia Dima-Okojie (Marketing Director, Mastercard), and Linda Obi (Founder/CEO, Afrihealth) shared valuable insights tailored to their sectors.
Looking ahead, the 2026 event, scheduled for February 28, will focus on “Growth Loop: Redefining Customer Acquisition, Engagement, and Retention.” This theme highlights the importance of not only attracting new customers but also nurturing ongoing relationships to build brand advocates.
Addressing the Cost Barrier in Customer Acquisition
According to Ingressive Capital, African startups typically allocate between 20% and 40% of their operating budgets to marketing and customer acquisition. This significant expense often forces small businesses to shut down prematurely.
MarTech Africa 3.0 aims to introduce more affordable and effective strategies for reaching target audiences while also emphasizing customer retention. Research shows that improving retention rates by just 5% can increase profits by 25% to 95%, underscoring the financial benefits of focusing on loyal customers.
By equipping entrepreneurs with the right knowledge and tools, initiatives like MarTech Africa hope to reduce the high failure rates and foster sustainable growth across Nigeria’s informal and formal business sectors.
