Small business owners across Nigeria are constantly seeking ways to maximize their capital amidst soaring inflation, which notably reached over 23 percent in April 2025.
For these entrepreneurs, every Naira saved on crucial operational costs—be it rent, utilities, or licensing fees—directly translates into vital funds that can be reinvested into growth, inventory, marketing, or staff development.
We’ve identified seven strategic locations across Nigeria that offer an ideal blend of lower living expenses and supportive environments small business owners.
These states boast essential costs—including food, housing, and power—that remain comfortably below the national average.
Beyond mere affordability, they feature business-friendly policies, such as streamlined registration processes, access to low-cost market spaces, and a ready base of local customers eager to support homegrown ventures.
Whether you’re launching a digital service, establishing a retail outlet, or nurturing an agricultural start-up, these regions present unique opportunities to foster sustainable growth without breaking the bank.
1. Ondo State: Where Costs are Calm
Ondo stands out with Nigeria’s lowest headline inflation rate at just 13.4 percent.
This translates to remarkably stable residential rents and food prices, making monthly living expenses exceptionally modest.
The state government actively supports entrepreneurs through an efficient online portal for business registration and offers subsidized market stalls and workspaces in key towns like Akure and Okitipupa.
This setup significantly reduces initial capital requirements, making Ondo an attractive entry point for new ventures.
2. Cross River State: Tapping into Creative & Tourism Hubs
Boasting a 17.1 percent headline inflation, Cross River maintains stable prices for core commodities. Its capital, Calabar, is quickly emerging as a hub for creative and tourism sectors, creating niche markets for boutique retailers and service providers.
The state offers some of the most affordable business permits in the southern region.
Additionally, its burgeoning agro-processing centers provide accessible equipment leasing options, particularly beneficial for farmers and food manufacturers aiming to add value to their produce.
3. Kwara State: Ideal for Micro-Enterprise Growth
Kwara’s inflation rate of 17.3 percent ensures that both living and operational costs remain comfortably below the national average.
In Ilorin, entrepreneurs can secure small shops or workshops at nearly 30 percent less than in comparable Nigerian cities.
The state’s SME Development Agency actively promotes local businesses by waiving initial licensing fees for micro-enterprises and offering access to zero-interest loans, positioning Kwara as an excellent location for artisans, tailors, cobblers, and light manufacturing businesses.
4. Osun State: Nurturing Growth with Targeted Support
With an inflation rate of approximately 17.8 percent, Osun State combines low food and transport expenses with strategic grants for small businesses.
In urban centers like Osogbo and Ile-Ife, modest apartments and retail spaces are available for about 20 percent less than the national urban average.
The Osun Youth Empowerment Scheme provides crucial matching grants and practical training, particularly for budding entrepreneurs in agriculture, fashion, and digital services.
5. Ekiti State: An Agribusiness Hotbed
At around 18.2 percent inflation, Ekiti keeps staple food prices in check while nurturing an agribusiness ecosystem. Small-scale farmers and food processors benefit immensely from duty-free importation of essential milling and packaging equipment.
Furthermore, industrial land leases in Ado-Ekiti are subsidized, and the state’s Agro-Business Development Agency offers mentorship and co-working spaces specifically tailored for food production and value-addition startups.
6. Delta State: Beyond Oil, Affordable Opportunities Abound
Outside its major oil-producing centers, Delta State averages an 18.3 percent inflation rate, offering significantly lower rents and utilities in towns like Ughelli and Asaba.
The state’s “Made in Delta” program actively promotes local crafts, processed foods, and light manufactured goods nationwide.
Its SME center also provides cost-effective co-working spaces and facilitates group purchasing agreements for raw materials, easing the burden on local businesses.
7. Oyo State: Urban Affordability with Growth Potential
Closing our list, Oyo State records an 18.7 percent inflation rate.
Its capital, Ibadan, stands out as one of Nigeria’s most affordable major cities for both housing and daily commuting.
Retail spaces on key commercial corridors can be rented for considerably less than in economic powerhouses like Lagos or Abuja.
The Oyo Investment Programme further supports small and medium-sized enterprises (SMEs) with matching grants and low-interest microloans, significantly easing the financial strain on startups in retail, hospitality, and creative industries.
By strategically choosing any of these seven states, Nigerian entrepreneurs can leverage lower living expenses and reduced business overheads.
This crucial saving frees up vital capital for inventory, marketing initiatives, or staff development, effectively transforming tight budgets into powerful engines for sustainable growth and lasting success.
