Nigeria's Foreign Exchange Crisis has Women-owned Businesses Struggling

By Atinuke | Aug 12, 2022

According to World Bank annual ratings, in 2018, Nigeria ranked 131 of 190 economies in the ease of doing business. The yearly rankings are based on how a country’s regulatory environment is conducive to business operations. In Nigeria, the regulatory environment is hostile and unstable. Entrepreneurs must constantly innovate their way out of oppressive, unreasonable legislation and requirements to see their businesses grow or survive. Coupled with the naira’s rapidly dwindling value, operating as a small or medium-scale enterprise (SME) in Nigeria is an uphill battle. 

Nigeria’s small businesses are locked in a battle against a foreign exchange crisis that is forcing them to adapt or die trying. These businesses, mostly privately owned,  significantly contributes to economic growth through job creation, revenue generation, economic diversification, etc.

Nigeria has 39.6 million Nano, Micro, Small, and Medium Enterprises (NMSMEs), who currently account for 96.9 percent of businesses in the country, provide 87.9 percent of employment and contribute 46.31 percent of the national GDP, according to the National Bureau of Statistics (NBS).

An estimated 40 per cent of Nigeria’s small businesses are owned and operated by women, so in these trying times, Document Women spoke to four young women entrepreneurs about how the current state of the Nigerian economy is affecting their business operations.

21-year-old Feyi is a law student and the owner of Stylebox Luxury Enterprise, an online store that offers retail & personal shopping services for high street, contemporary and luxury fashion and, sometimes, non-fashion items like gadgets & electronics per customers’ request. 

Feyi says the driving force behind her business is to make money.

If I’m not working, I’ll be broke. There’re bills to pay and goals to achieve, so I cannot afford to be broke. I have a lot of goals, and the thought that with each sale, I’m a step closer motivates me. There are people I look up to, and I see how I can be better if I put in the work. Another thing that keeps me going is that I love what I do. I enjoy shopping— online or not.

Feyi typically has to deal with foreign currency in her business, and she says the exchange rates are “extremely discouraging”. 

“I usually have to buy at the black market rate, which is very high. $1 was about N400, £1 was 600 when I started a year ago. Now they are N650 and N830, respectively. What does this mean? If you bought something worth £100 last year, it cost you N60,000, but now it’ll cost N83,000. as a result, I always have to adjust my prices. For personal shopping, I’m not really affected. If anything, I make extra cash. the client has to pay for their items at the current rate, and I make a bit more from it since I deal with percentages. The unstable rates affect shipping costs too. Shipping companies increase their prices to accommodate the new rate, and even when it falls, they never reduce it. It affects local dispatch companies. They always have to increase their rates because of unstable fuel prices and scarcity. They sometimes buy at black market rates, which is unfavourable to everyone.


Outside the Naira's free fall at exchange rate trading windows, fuel scarcity, corruption, high cost of living and institutional bottlenecks, the general instability and uncertainty characteristic of the Nigerian existence pose additional problems for people running businesses. 

Operating a business out of Nigeria has hindered me from doing many things I want. I want to open a store in Lagos but have many fears. The cost of fuel or diesel, because there’s almost no electricity, the ridiculous prices customs officials give, especially on large shipments, the fluctuation in rates, customs wanting you to “settle” them, the list is endless. Thinking about these things just discourages me,” Feyi added. It’s tiring. It’s almost like they’re actively trying to frustrate business owners. There’s virtually no way around these problems. You just have to adjust to whatever new problem comes your way. ”


Tobi, 21, is a mass communication student at the University of Lagos and the owner and chef of Foodbanta, an online store that majors in cakes, small chops and other delicious treats. 

In the face of repeated strikes at federal universities, some undergraduates turn to business, a manifestation of a system in dire need of fixing. 

Tobi had always loved cooking and drawing inspiration from her mother; she learned to bake in 2018. However, the skill sat on the back burner because of school. Then, in 2020, ASUU went on a 9-month strike. Coupled with the COVID-19 pandemic, many young Nigerians were home for most of 2020. During this time, Tobi was bored and broke and remembered she’d learnt a skill. 

I brought out my cake recipe book and started trying the recipes, and I couldn’t believe I had been sleeping on a source of income right from my all-time passion! I made a cake for a friend in my estate, and he asked me to make cake parfait for his customers. He told me they kept coming back for more, and there was a day I had to bake up to 20 loaf cakes for him, and I figured everyone else had to taste this.”

Tobi says the economy’s effects on her business mostly trickle down to her customers. 

“I have no choice but to pass it down to my customers because I can’t be running at a loss; I’m in business to make money.”

The main problems she faces in operating her business are the high delivery costs and customers’ inability to afford her prices because, unfortunately, they have to increase as production costs rise.

Yemi, the owner of Nemi’s Jewelry, started her business to provide quality and affordable jewellery pieces. When asked how the state of the Nigerian economy affects business operations, Yemi says the unstable and high exchange rate prevents her from offering better prices to her customers

“The prices of goods keep rising. It’s very hard to save for my current goals as my money keeps losing value, and my goals seem to be getting further out of reach.” 

Yemi’s current solution? “I try to buy in bulk to save money in the long run. I save my money in dollars, and most importantly, I try to plan ahead and buy things even before I plan to use them.”


Ọmọtórera is a 21-year-old designer, digital creator and finance graduate from the University of Lagos and the founder of Oyiza, a contemporary womenswear brand. 

“I started Oyiza because I wanted to build a Nigerian-owned brand that could cater to a global audience. My designs are influenced by so many things but majorly by my people — my customers' colourful auras and joy when they get their orders keep me grounded.”

Tórera says sourcing for materials is not what it used to be and that the rising cost of living is a hindrance.

I had worked in fashion for about three years before I launched my brand. Fabric sourcing back then was so different from what I am facing currently. Over time, I’ve watched the prices of things double whilst quality keeps dropping. As a brand owner, you do not want people to buy from you and not get their money’s worth, so I decided to start importing some of my fabrics for better quality. The exchange rate has made this so difficult to keep up with. Also, the cost of living is affecting the cost of labour, and you really can’t blame anybody; it’s important to me that my workers are well compensated.”

The foreign exchange crisis spans the entire chain of production. Torera notes the price hikes for equipment such as sewing machines and fabrics.

Things as routine as receiving payment from international customers have been such a big issue for me, and most of my customers are not Nigerian-based. There’s the local logistics issue too. There are many sides to it, and I hope I’m able to expand across borders soon. As someone that likes structure, there is simply no ease of doing business here for me," Torera added. 

In March, Nigeria's Central Bank had placed spending limits on customers' bank cards, currently pegged at $20 per transaction. All banks informed their customers they were reducing the limit from $100 to either $20 or $50 a month, meaning its customers would be unable to use their naira debit cards to pay for any transactions more than $20 or $50 in a month. In turn, this mounted pressure at the black market, as Nigerians scramble to secure foreign currency to fund their business or tuition. 

Micro, small and medium scale enterprises (MSMEs) are regarded as the core of the economy, seeing that they provide platforms with which the economy can grow and develop.

The Bottom line; there’s not much Nigerian business owners can do to mitigate the effects of a rapidly dwindling economy, operating in a regulatory environment actively trying to kill them in an economy powered by a failing currency.