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Over 3m businesses lost to fraud, others

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By Abdulwasiu Usman

Insecurity and poor business environments adds to SMEs' woes.

Charles Odii, the Director-General of Nigeria Small and Medium Enterprise Development Agency (SMEDAN), disclosed that the nation has suffered a significant loss of more than three million businesses due to multifaceted challenges such as insecurity, fraud, global competitiveness, and poor business environments. He mentioned this during a visit to Ola Olukoyede, the Chairman of the Economic and Financial Crimes Commission, in Abuja. Odii stated that the reason for his team’s presence at the Commission was centered around fostering trust and strengthening the current collaborative bond with the EFCC.

During his address, he clarified that the purpose of this visit is to establish a solid foundation of trust with the commission, which stands as a guardian for a staggering 40 million businesses. These businesses are concerned over the potential detrimental impact of the EFCC on small-scale enterprises. To further elaborate, he emphasized the importance of perceiving the EFCC as a collaborative force, working in tandem with businesses to achieve economic prosperity and overall progress. Speaking, Olukoyede made an assurance that the EFCC would establish a collaborative alliance alongside SMEDAN and other instrumental agencies key for fostering economic growth.

Imposing PND on businesses would have effects on economy.

For a nation’s economy to flourish, it is imperative to strategically position small and medium-sized businesses in their appropriate sectors, offer them backing, and establish a conducive atmosphere for their growth. These measures are precisely the ones we intend to implement through our collaboration with EFCC, Odii said. He emphasized that the practice of enforcing Post No Debit, commonly known as PND, on both personal and corporate accounts has come to an end. Also, the Commission’s aim is to distinguish between unlawfully obtained funds and legitimate income in order to foster economic development within the nation.

The indiscriminate imposition of PND on the accounts of individuals or organizations is now a thing of the past. In the event that illicit funds are discovered in any account, the most advisable course of action is to isolate them from lawful funds. According to him, imposing PND on businesses would have negative consequences for their employees, impede their productivity, and ultimately have an impact on the economy. However, he cautioned that any business established with the intention of damaging the economy would face severe consequences from the EFCC in accordance with the law.

About 7.8m small businesses under ASBON have halt operation.

According to his statement, the primary target will be businesses established with the intention of destabilizing our economy. A rigorous enforcement of the law will be directed towards them, while also addressing those who may inadvertently become involved in illicit activities such as money laundering. The aim is to effectively distinguish illicit gains from lawful funds and take appropriate action, he emphasized. A recent report by SMEDAN revealed that the country has experienced a decline of approximately two million in the number of MSMEs from 2017 to 2021.

Despite being acknowledged as the catalysts of economic advancement and significant contributors to job creation, economic growth, and international trade expansion, MSMEs are currently facing an unexpected turn of events. Surprisingly, nearly 10% of the 40 million Micro, Small, and Medium Enterprises (MSME) in the nation have been forced to close their operations since the elimination of subsidies. In the wake of mounting economic difficulties, about 7.8 million small businesses under the Association of Small Business Owners of Nigeria (ASBON) have experienced a halt in their operations over the past two years.

Small businesses are barely enduring the present economic situation.

Operations of numerous Small and medium Scale enterprises in Nigeria, particularly in the north-eastern region, is being significantly hindered by insecurity. Additionally, small businesses are barely enduring the adverse effects of the present economic situation. Many enterprises, especially those of micro, small, and medium sizes, are finding the Nigerian business environment to be exceedingly difficult. The soaring inflation rates witnessed in recent times have also contributed to the distressing situation for numerous small businesses, leading to their arduous battle for survival—an alarming circumstance that causes concern.

Related Link

SMEDAN: Website

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2 months ago

Over 3m businesses lost to fraud, others. – Insecurity and poor business environments adds to SMEs’ woes. – Express your point of view.

2 months ago

Fraud cost almost 3 million enterprises, among other things. SMEs’ problems are exacerbated by insecurity and unfavorable business environments. Our loss of this substantial sum of money to fraud is regrettable. Our approach to this deception must be comprehensive. It is imperative to hold the offenders accountable.

2 months ago

Over 3m businesses lost to fraud, others. Establishing a secure and favorable business climate should be a top priority for the government and other pertinent parties. We can empower SMEs and advance Nigeria’s economic progress by tackling these issues.

Adeoye Adegoke
2 months ago

I totally understand the concern about the impact of fraud, insecurity, and poor business environments on SMEs. It’s a serious issue that affects not only individual businesses but also the overall economic growth of a country.
When businesses fall victim to fraud, it can lead to devastating financial losses and erode trust in the business community. This can have a ripple effect, as other businesses may become hesitant to engage in transactions or partnerships, ultimately hindering economic growth.
Insecurity, whether it’s physical or cyber-related, poses significant challenges for SMEs. It not only threatens the safety of business owners and employees but also disrupts operations and hampers business growth. It’s essential for governments and law enforcement agencies to prioritize the security of businesses and provide adequate support and protection.
Moreover, poor business environments, characterized by excessive bureaucracy, corruption, and lack of infrastructure, can create additional obstacles for SMEs. These challenges make it harder for businesses to thrive, innovate, and compete. Governments should focus on creating a conducive business environment by streamlining regulations, reducing red tape, and investing in infrastructure development.
Addressing these issues requires a collaborative effort between governments, businesses, and other stakeholders. By implementing effective policies, providing support and resources, and fostering a culture of transparency and accountability, we can create an environment where SMEs can flourish and contribute to sustainable economic growth.