By Erewunmi Peace

Nigeria’s micro, small and medium enterprises (MSMEs) are losing between ₦5 trillion and ₦10 trillion annually to employee fraud and occupational corruption, according to the Centre for the Promotion of Private Enterprise (CPPE).

The disclosure was made by the Chief Executive Officer of CPPE, Dr. Muda Yusuf, who described employee fraud as a major but often overlooked threat to business sustainability in Nigeria.

A Hidden Drain on Small Businesses

According to CPPE, the estimate is based on global workplace fraud studies which suggest that organizations typically lose between 5% and 10% of their annual revenue to internal fraud.

The economic think tank noted that common forms of employee-related fraud affecting MSMEs include:

• Theft of cash and inventory
• Diversion of sales proceeds
• Payroll fraud
• Collusion with suppliers
• Manipulation of financial records

Dr. Yusuf emphasized that these losses significantly weaken profitability, reduce investor confidence, and contribute to the high failure rate of small businesses across the country.

Impact on Nigeria’s Economy

MSMEs play a critical role in Nigeria’s economy, contributing significantly to employment generation and economic growth.

However, CPPE warned that unchecked internal corruption could continue to undermine the sector’s potential.

The organization called on business owners to strengthen internal controls, improve financial oversight, and adopt better governance practices to reduce vulnerability to fraud.

Call for Stronger Oversight
CPPE urged stakeholders, including business associations and regulatory bodies, to promote awareness and capacity-building initiatives that will help small businesses implement fraud-prevention strategies.

Industry observers say tackling employee fraud could significantly improve the survival rate and profitability of Nigerian MSMEs.

More reactions are expected from business leaders and policymakers in the coming days.