As the oil sources continue to become depleted and global oil prices continue to drop, there are concerns that the current pattern of growth and development in Nigeria, a country that is heavily dependent on natural resources such as oil as drivers of economic growth, is neither inclusive nor sustainable. In order to shift its focus from the natural resource dependency dynamic, create employment and most importantly, stimulate sustainable economic growth; there is an urgent need for the Nigerian economy to begin harnessing and cultivate their underutilized resources and industries such as the fashion industry. In economics, entrepreneurship is considered as one of the key drivers of economic growth and development. However, the existing empirical and theoretical evidence show the institutional asymmetry and lack of alignment between formal and the informal institutions hinders the social and economic development of productive entrepreneurship. This study aims at exploring the role of institutions in promoting entrepreneurship in the Nigerian fashion industry by identifying the uncertainties and obstacles that existing and emerging entrepreneurs face while trying to start or run a viable business within the Nigerian fashion industry and then analysing how the existing institutions can be used to foster entrepreneurship in the industry. The findings show that there is high potential and diversity in the entrepreneurs’ experiences within the Nigerian fashion industry, which is in line with neoclassical economists that argue that the main challenge in developing countries is not the lack of skills, technology or knowledge, but rather, the lack of proper institutions. The overview of the current status of institutions within the Nigerian fashion industry identifies various regulatory, financial, social, cultural and educational institutions which are both encouraging and discouraging entrepreneurship in the industry, which is in line with the institutional theory. Thus, this study recommends an alignment in the formal and informal institutions in the economy as a way of solving the existing institutional asymmetries that are causing the poor performance of entrepreneurship in the country.