Rising commercial rents and escalating occupancy costs are forcing a growing number of Micro, Small and Medium-sized Enterprises (MSMEs) to shut down physical offices and retail outlets in favour of online and home-based operations, as entrepreneurs struggle to stay afloat amid Nigeria’s harsh business environment.
Across major commercial centres in Lagos, Ogun, Abuja, and Port Harcourt, businesses are increasingly abandoning traditional office spaces as soaring rents, electricity tariffs, logistics costs, multiple tenancy charges, and weak consumer spending continue to erode profitability.
For many entrepreneurs, maintaining a physical office has become a financial burden they can no longer sustain, making digital platforms and remote work more viable options.
An entrepreneur and founder of a Lagos-based branding and digital marketing firm, Adenike Johnson, said the decision to close her office was driven by the sharp increase in rent.
“I had to give up my office after the landlord demanded almost double the previous rent. Most of our meetings now hold virtually. Our clients are comfortable with video calls, and we have significantly reduced our overhead,” she said.
Similarly, Chinedu Okafor, who runs an online fashion accessories business, said he converted his physical shop in Lekki into a warehouse after realising that most of his sales now come through digital platforms.
“Paying millions annually just to maintain a showroom no longer makes economic sense when over 80 per cent of our sales come through Instagram and WhatsApp,” he said.
Mrs Yemisi Ashaolu, another entrepreneur, said she relocated her business to her apartment because of the persistent increase in commercial rents.
“We haven’t closed our business; we are now online and taking customers’ orders. We’ve simply closed our office because landlords continue to increase rents at every opportunity,” she said.
For Mrs Chioma Okoli, who operated from Lagos’ Yaba business district, the rising cost of electricity, service charges, and rent made it impossible to continue running a physical office.
“I can’t continue to cope with outrageous electricity bills, maintenance fees, and constant rent increases at both my home and business premises. Most of our profits were going into operating expenses, so I moved the business back home,” she said.
A cosmetic and perfume dealer in Abule Egba, Funsho Akinajo, said soaring electricity tariffs, service charges, and local government taxes had made physical business operations increasingly difficult.
“We spend more on electricity, maintenance fees, service charges, and council taxes. Most of our profits are ploughed back into the business. Relocating to my house was the only way to reduce operating costs,” she said.
Esther Ajibade also said rising rents and transport costs forced her to shut her physical store and move sales to social media platforms.
“The cost of maintaining a shop became unbearable. Today, we sell through Instagram, WhatsApp, TikTok, and e-commerce platforms, where we have built a loyal customer base,” she said.
The growing migration to virtual operations comes as businesses continue to grapple with inflation, exchange rate volatility, rising energy costs, and declining consumer purchasing power.
