4 hours ago
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The Centre for the Promotion of Private Enterprise, CPPE, has raised concerns over rising cases of employee corruption and occupational fraud within Nigeria’s Micro, Small, and Medium Enterprises, MSMEs.
According to the CPPE, the trend may be costing the sector between N5 trillion and N10 trillion annually.
In a statement signed by its Chief Executive Director, Dr. Muda Yusuf, the economic think tank described MSMEs as the backbone of Nigeria’s economic resilience, noting that they account for the overwhelming majority of businesses, sustain millions of livelihoods, and contribute about 50 percent to the country’s non-oil Gross Domestic Product.
The CPPE said that while MSMEs continue to grapple with visible challenges such as inflation, weak purchasing power, high operating costs, infrastructure deficits, and limited access to finance, a more subtle but deeply damaging threat persists, employee corruption and occupational fraud.
According to the statement, such practices manifest in various forms, including theft of cash and inventory, diversion of sales proceeds, payroll manipulation, procurement kickbacks, customer diversion, collusion with suppliers or clients, abuse of expense reimbursements, and falsification of financial records.
“Employee corruption and occupational fraud constitute one of the largest hidden drains on Nigeria’s entrepreneurial economy, with annual losses ranging from N5 to N10 trillion,” Yusuf stated.
Citing global workplace fraud surveys, the CPPE noted that organizations worldwide typically lose between five and 10 percent of their annual revenues to employee-related fraud. It added that small businesses suffer disproportionately higher losses due to weak internal control systems, heavy reliance on cash transactions, limited audit capacity, lower detection and recovery rates, and a high level of informality.
Applying conservative estimates to Nigeria’s MSME economy, which contributes roughly half of national output, the CPPE said the potential financial losses from employee fraud represent a massive hidden tax on entrepreneurs, eroding profits, weakening investment capacity, and constraining job creation.
To address the challenge, the CPPE urged MSME operators to prioritize digitalization as a key anti-fraud strategy.
It advised business owners to adopt digital payment channels and basic accounting software to improve transaction traceability and reduce opportunities for diversion and concealment of funds.
“Digitalization is one of the most powerful low-cost anti-fraud tools available to MSMEs,” the statement noted.
The CPPE stressed that tackling employee corruption should not be seen merely as an internal management issue but as a strategic economic priority critical to national development.
It added that for Nigeria’s MSME sector to fully realize its potential as an engine of growth, fraud prevention, stronger corporate governance, and digital transparency must become central pillars of enterprise policy and business practice.
N10 trillion lost yearly to employee fraud in Nigeria’s MSME sector – CPPE
