NECA unveils Africa’s first ESG guide for MSMEs ahead of 2030 deadline

… backs Tinubu’s reforms

The Nigerian Employers’ Consultative Association (NECA) has endorsed the Federal Government’s ongoing economic reforms while calling for more inclusive implementation.

This was as it launched what it described as Africa’s first Environmental, Social and Governance (ESG) Implementation Guide for Micro, Small and Medium Enterprises (MSMEs) to prepare Nigerian businesses for mandatory sustainability reporting expected by 2030.

Speaking at NECA’s 5th Nigeria Employers’ Summit in Abuja on Tuesday, Adewale-Smatt Oyerinde, Director-General of NECA, said although the administration’s reforms have imposed significant short-term costs on businesses and households, they remain necessary to restore long-term economic stability.

He stressed, however, that the government must continuously review, reassess and refine the reforms in collaboration with the organised private sector to ensure they produce the intended outcomes.

“Government needs the collaboration and support of organised businesses to drive these reforms effectively.

“At the same time, there must be consistent review, reassessment and replanning whenever it becomes clear that expected outcomes are not being achieved,” Oyerinde said.

He noted that the summit was convened to review the impact of reforms introduced over the past year, identify opportunities for businesses and social enterprises, and explore how ESG principles can strengthen enterprise competitiveness and promote inclusive national development.

Oyerinde maintained that sustainable businesses are the foundation of employment creation and government revenue, stressing that business survival must precede job creation.

“There must first be a business before there can be workers.

“It takes sustainable businesses to create jobs. If businesses are not sustainable, they cannot create employment, nor can government generate adequate company tax revenues,” he said.

According to him, while workers deserve decent wages and improved welfare, businesses must first remain profitable enough to sustain operations and continue creating employment opportunities.

He said NECA would continue engaging government to strike the right balance between business sustainability and workers’ welfare.

The NECA Director-General disclosed that recommendations from the summit would be presented to key government officials, including the ministers of finance, industry, trade and investment, as well as other agencies driving the administration’s reform agenda.

He said government representatives who participated in the summit demonstrated openness to dialogue and constructive engagement with the private sector.

“Our recommendations are not antagonistic or frivolous. They simply provide different pathways to achieving the same economic objectives the government seeks,” he said.

Among the recommendations discussed were making reforms more inclusive, improving implementation of the new tax laws, avoiding retroactive application of tax policies and establishing clear timelines for Nigeria’s industrial policy.

A major highlight of the summit was the unveiling of the NECA ESG Implementation Guide for MSMEs, which the association described as the first of its kind in Africa.

Femi Jaiyeola, chairman of the NECA ESG Advisory Board, said the initiative marked a significant milestone in preparing Nigerian businesses for an increasingly sustainability-driven global economy.

He explained that the guide provides MSMEs with a practical, step-by-step roadmap for understanding and implementing ESG principles while unlocking new opportunities for growth.

“ESG has gone beyond being a mere tick-box exercise to satisfy regulatory requirements. It now presents enormous opportunities for MSMEs and for Nigeria as a whole,” Jaiyeola said.

He warned that ESG reporting is expected to become mandatory in Nigeria by 2030, making early preparation imperative for businesses seeking to remain competitive.

“The message for MSMEs is very clear. By 2030, ESG reporting is expected to become mandatory in Nigeria. Therefore, the time to prepare is now,” he added.

According to him, the implementation guide will enable businesses to adopt ESG progressively while improving access to finance, strengthening competitiveness, enhancing corporate reputation and building long-term resilience.

Oyerinde noted that global investors increasingly evaluate companies based not only on profitability but also on their environmental stewardship, social responsibility and governance standards.

“The era of profit maximisation alone is gone. Investors now want to know how businesses interact with their environment, what social impact they make and the governance structures they have before committing capital,” he said.

Jaiyeola added that businesses seeking to expand internationally or attract investment must now integrate ESG into their operations, as financial institutions and regulators increasingly consider sustainability performance when making funding decisions.

He noted that because MSMEs account for the overwhelming majority of businesses in Nigeria, their successful adoption of ESG principles is critical to the country’s long-term economic competitiveness.

Jaiyeola disclosed that NECA, with support from the International Labour Organization (ILO), carried out a comprehensive assessment of ESG adoption in Nigeria, culminating in the launch of a national report in December 2025.

The assessment concluded that MSMEs, being the backbone of Nigeria’s economy, must be fully integrated into the country’s ESG framework.

“What we are launching today is, to the best of our knowledge, the first ESG Implementation Guide specifically designed for MSMEs, not only in Nigeria but across Africa, with the support of the ILO,” he said.

He described the guide as a practical tool that would help entrepreneurs understand ESG concepts, implement sustainability practices and position themselves for long-term growth.

Jaiyeola also announced that six members of the NECA team are currently undergoing specialised ESG training at the International Training Centre of the ILO in Turin, Italy.

Upon completion, they will train MSMEs across Nigeria’s six geopolitical zones as part of a nationwide capacity-building programme.

Oyerinde described the removal of the petrol subsidy as painful but necessary, arguing that previous administrations had sustained an unsustainable economic model through excessive borrowing and monetary expansion.

“The subsidy removal came late. We should have removed it years earlier,” he said.

He acknowledged that higher energy costs have increased production expenses and reduced consumers’ purchasing power, making it more difficult for businesses to sell their products despite continued production.

“The cost of doing business has gone up. At the same time, people’s disposable income has reduced. Businesses can produce, but consumers now have less money to buy what is produced,” he explained.

Despite the challenges, Oyerinde identified the liberalisation of Nigeria’s foreign exchange market as one of the administration’s most successful reforms.

He criticised the previous multiple exchange-rate regime for encouraging arbitrage and rent-seeking rather than productive investment.

“Previously, people with connections could buy foreign exchange at official rates and immediately resell at much higher rates without creating any value. A unified foreign exchange window has eliminated much of that distortion,” he said.

He also commended reforms in the aviation sector, citing the ongoing modernisation of Nigeria’s airports as evidence of efforts to improve critical infrastructure.

While admitting that Nigerians are still bearing the pains of the reforms, Oyerinde argued that the country has begun correcting long-standing structural distortions.

Quoting a popular saying, he remarked that “if you find yourself in a hole, the first thing to do is stop digging.”

“We may not yet feel all the progress because we are still filling the hole. But I believe this administration has stopped digging Nigeria deeper into economic problems. Our hope is that we reach ground level quickly and then begin to see sustained economic growth,” he said.