Employee Fraud Hits Nigerian MSMEs Hard, Costs Billions Annually

Dayo Thomas

A new report by the Centre for the Promotion of Private Enterprise (CPPE) reveals a disturbing trend: employee fraud is costing Nigeria’s Micro, Small, and Medium Enterprises (MSMEs) a staggering ₦5-10 trillion every year. This massive loss is a significant blow to the sector, which contributes roughly half of Nigeria’s GDP.

The CPPE points to weak internal governance structures, poor segregation of duties, and inadequate bookkeeping as major culprits. Sectors like retail, hospitality, agribusiness, and logistics are particularly vulnerable.

Experts recommend strengthening internal controls, adopting digital payment systems, and improving hiring practices. “Digitalization is key to reducing fraud,” says CPPE. By going digital, MSMEs can enhance transaction traceability and reduce opportunities for diversion and concealment of funds.

As Nigerian MSMEs navigate these challenging times, staying vigilant and implementing effective anti-fraud strategies is crucial.