Many Roads

The Desk — Finance, Policy & the View from the Street By Kemi Adeosun

What Nidacity’s founding survey is asking about how Nigeria’s entrepreneurs begin — and why the question was overdue.

Have you ever had this conversation? Someone comes to you — a relation, a neighbour, someone whose face you trust — and they tell you they want to start a business. The idea sounds plausible. The amount they need is not ridiculous; it is not the kind of sum that should give you pause. And then comes the line that closes the deal: “I promise you — if you do this for me, I will never ask you for anything else in my life.”

It sounds like a reasonable arrangement. It sounds, in the moment, like an act of genuine support — like you are doing something useful, something that matters. So you give the money.

And you have never seen it since.

If that story is yours, you are not alone. If it happened to you more than once, you are certainly not alone. And if, somewhere in the background of your reluctance to lend, or your wariness of anyone who opens with “I just need a little capital to get started,” there is the memory of that money — then you understand, at a personal level, something that Nigeria’s economic data has never quite been designed to capture.

That gap — between what the statistics record and what the founding stories actually contain — is why Nidacity built the Many Roads survey. Because before we can talk sensibly about where Nigeria’s entrepreneurs are going, we need to be honest about where they came from. And how they actually started.

The Country With Too Many Startups

Nigeria has one of the highest rates of entrepreneurial activity in the world. That fact appears regularly in development reports, usually as evidence of dynamism, of hustle culture, of a people who refuse to wait for someone else to create opportunity. And it is true, in its way. But it is also, in another way, a polite way of describing something more complicated and more painful.

Much of what we call entrepreneurship in Nigeria is not entrepreneurship in the sense that business schools teach it. It is not the Schumpeterian story of creative destruction — of the individual who sees a gap in the market and builds deliberately to fill it. A significant portion is what economists call necessity entrepreneurship. Not “I chose this.” But: “There was nothing else.”

Nigeria does not have too few entrepreneurs. It may have too many — in the specific sense that a system which pushes people into business as a last resort is not creating an entrepreneurial culture. It is generating an enormous number of businesses that were never designed to grow.

The distinction matters more than it might appear. An entrepreneur of opportunity has, by definition, identified something worth building and made a conscious decision to build it. An entrepreneur of necessity has identified that the alternative is worse. Both can produce viable businesses. But the founding conditions — the motivation, the preparation, the quality of the idea — are structurally different. And those founding conditions tend to persist.

Why We Are Asking Now

The Many Roads survey asks about something that formal economic data has consistently overlooked: how growing up Nigerian shapes our relationship with income, risk, and the fundamental question of whether to build for yourself or work for someone else. We want to understand the inflection points. Was it nature, or was it Nigeria?

Did the oil-price cycles that governed our parents’ sense of security shape what we believed was possible? Did watching a father lose a job in a downturn, or watching an uncle thrive in a sector that was suddenly hot, calcify certain beliefs about the reliability of employment? Did the structural instability of the formal economy push talented people into businesses they would not otherwise have chosen — and if so, what kind of businesses did those conditions produce?

These are not abstract questions. Businesses started from necessity — because the founder had lost a formal job, or had never been able to find one, or was simply out of alternatives — tend to show a different profile from those started from a clear sense of market opportunity. Not uniformly worse: some of the most resilient businesses in any survey begin in desperation and are hardened by it. But, in aggregate, the necessity businesses are more likely to have started undercapitalised, more likely to have burned through their initial funding without establishing a sustainable revenue model, and more likely to have stalled at the point where growth requires the kind of structured external capital that their founding story made almost impossible to access.

The reason is not difficult to understand. If you start a business because you need income, your horizon is immediate. You are not optimising for growth; you are optimising for survival. The decisions that survival demands — take any revenue now, avoid the costs that would unlock scale, keep the overheads low enough that the business can persist even when it is not truly thriving — are exactly the decisions that prevent businesses from ever becoming something larger than a livelihood.

There is nothing wrong with a business that is a livelihood. But a country whose entrepreneurs account for roughly 45 percent of GDP and 80 percent of employment cannot afford for most of those businesses to have been designed only to survive.

Understanding how we got here requires going back to the founding moment. The conversation I described at the start of this piece — the promise, the small sum, the money that never returned — is not just a private tragedy. It is repeated so often, across so many families and friendships, that it represents a structural feature of how capital moves, and fails to move, in this economy. We are funding our entrepreneurs through social networks that were not designed to carry commercial risk. When those networks fracture, as they inevitably do, the loss falls on the people in the network, not on any institution built to absorb it.

What the Results May Yet Tell Us

Here is what I expect the data to confirm, and what I think will surprise us.

I expect it to confirm that the necessity-versus-opportunity divide tracks closely with access to stable formal employment in the founder’s household of origin. The child who grew up in a home where a salary arrived reliably every month — where the word “job” connoted security rather than temporary relief — is more likely to have started a business from deliberate choice. The founder whose earliest memory of money is its absence, its irregularity, its dependence on someone else’s goodwill or a government payment schedule that was never quite reliable: that founder is more likely to have entered business as a defensive manoeuvre. Both can build something real. But the second founder enters with a different relationship to risk, to debt, to patience — and those relationships shape what the business becomes.

What may surprise us is the diaspora signal. Nigerians outside Nigeria are building businesses too — at rates that exceed those of most other migrant communities in the countries where they settle. The prevailing assumption is that diaspora entrepreneurs have escaped the necessity trap: they have income from employment, they have access to institutional credit, they are building from choice rather than compulsion. The Many Roads data, when it arrives, may complicate that picture. The Nigerian disposition toward entrepreneurship — the instinct to build a parallel income stream, to distrust singular dependence on a single employer, to treat employment as one leg of a structure that needs at least two — does not dissolve on exit, it travels.

That would mean Nigerian entrepreneurial behaviour is less a cultural asset than a rational adaptation — intelligently acquired, imperfectly transmitted, and far more fragile than the headline startup statistics suggest.

A fresh theory of change

 It would also mean that the policy problem is different from the one we usually debate. The question is not how to encourage more Nigerians to start businesses. We have done that, rather too effectively, by building an economy where the alternative is often worse. The question is how to create the conditions  that give people the genuine choice between building something and joining something.

 If the  entrepreneur of opportunity, gets better she will create jobs  and a value chain that will engage the entrepreneur of necessity. Both thus become more powerful economic actors than the one who built because there was nothing else distorting the market for those with real intent.

Many Roads will not solve that problem. But it will give us the clearest picture we have yet had of its shape. And the shape of a problem is where the solution begins.

The data will take time to fully interpret. The stories, already, are telling us things we needed to hear.

—

Kemi Adeosun is a former Minister of Finance of the Federal Republic of Nigeria and former Commissioner for Finance of Ogun State. She is the founder of Nidacity.com. She writes from Lagos.