Emmanuel OchayiInflation and Its Impact on Founders
A new report by Flourish Ventures highlights that 66% of Nigerian startup founders cite inflation as their biggest challenge. With Nigeria’s inflation rate climbing to 33.88% in October 2024—up from 32.70% in September—entrepreneurs are struggling to sustain their ventures amidst surging costs.
“I often tell my founders to focus on what they can control,” said Iyin Aboyeji, founding partner at Future Africa. “But with inflation affecting every aspect of their business, the pressure is immense.”
Join our WhatsApp ChannelThe report, titled “Passion and Perseverance: Voices from the African Founder Journey,” surveyed 169 founders across 13 African nations to understand their stressors and coping strategies. Apart from Nigeria, founders in Egypt and Kenya also feel the heat, with inflation rates at 26.5% and 2.7%, respectively.
Beyond Inflation: Broader Stressors for Entrepreneurs
While inflation is a major issue, it isn’t the only hurdle. According to the report, 59% of founders listed fundraising as their biggest source of stress, followed by currency devaluation (44%), macroeconomic instability (40%), and company management (32%).
Female founders face an additional layer of challenges. “Loneliness, work-life balance, and fear of failure disproportionately affect women entrepreneurs,” the report noted.
Despite these challenges, Africa’s startup ecosystem is thriving, with founders showcasing remarkable resilience. “The potential for success in this environment is immense, but so is the pressure,” the report emphasised.
The Psychological Toll of Inflation and Other Stressors
The mental health impact of inflation and other pressures is stark. Data shows that 76% of founders who consider their startups thriving report high stress levels. Additionally, 49% experience exhaustion, and 46% suffer from anxiety.
“Founders rarely speak about their mental health struggles,” the report noted, adding that only 14% feel comfortable discussing these issues. Most remain silent due to fears of judgment and a perceived lack of empathy from investors.
READ ALSO: Nigerians Cry Over Exploitation Amid Inflation, Soaring Food Prices
However, those with strong support networks report 13% higher well-being than those with weaker networks, underscoring the importance of personal connections.
Coping Strategies: How Founders Manage Stress
Founders are finding ways to cope. Exercise (59%), relationships (49%), sleep (45%), and healthy eating (42%) are the top strategies entrepreneurs use to maintain their well-being.
Flourish Ventures’ findings suggest that fostering open communication about mental health and creating supportive ecosystems could mitigate the challenges posed by inflation and other stressors.
As Nigeria’s inflation continues to rise, these conversations could become pivotal in shaping a more sustainable entrepreneurial environment.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
