Stakeholders in the Nigeria corporate governance ecosystem recently converged on Lagos for consultation on the draft exposure document on small and medium enterprises’ corporate governance guidelines (SME-CGG) for Micro, Small and Medium Enterprises (MSMEs) in Nigeria.
The event marked another step in the ‘SME Future-Forward Project’, funded by the MacArthur Foundation, aimed at improving corporate governance, ethics, and sustainability of Micro, Small and Medium Enterprises (MSMEs), which constitute 96 percent of businesses in Nigeria.
The one-day event brought together various stakeholders, including representatives from the private sector, business membership organisations (BMOs), and government regulatory agencies, to discuss the purpose of the guidelines, receive feedback and recommendations on
the draft document, and plan a way forward on institutionalising corporate governance best practices in SME entities.
“The objective is to improve Nigeria’s business environment, ensure the longevity and sustainability of MSMEs, and boost business confidence, access to capital, and trade opportunities for compliant entities,” Naomi Nwokolo, executive director, UN Global Compact Network Nigeria, in her welcome address, highlighted the objective of the stakeholder consultation meeting.
Recognising the critical role of SMEs in the economy as they constitute 96 percent of the Nigerian marketplace and account for 84 percent of national employment, Nwokolo emphasised the need to align corporate governance practices with international standards to enhance competitiveness, attract investment, and contribute to the achievement of the Sustainable Development Goals (SDGs).
Soji Apampa, executive director, Integrity Organisation, provided an overview of the SME Future-Forward Project. Citing a 2016 OECD study, Apampa shared that most corruption is facilitated through intermediaries, including professionals who work at small and medium enterprises and between actors along all stages of the value and supply chains.
He remarked that presently the Nigerian public value ‘survival’ over ‘integrity’. He stated that developing the guidelines was a critical milestone in addressing these issues and fostering cultural change towards corrupt behaviour. However, he stated that to drive sustainable change, Regulators such as the FRC to create systems that would help monitor compliance to measure the initiative’s success and incentivise behaviour modification among the public.
Shuaibu Adamu Ahmed, executive secretary, Financial Reporting Council of Nigeria (FRC), in his keynote address commended the drafted Small and Medium Enterprise Corporate Governance guidelines 2023, clarifying how it fit into the broader mandate of the FRC to promote good corporate governance across sectors in Nigeria’s economy.
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Ahmed acknowledged the efforts made by the FRC to enhance public awareness of corporate values and ethical practices within various entities. He highlighted the council’s decade-long journey in developing codes of corporate governance for the public, private, and non-profit sectors, which culminated in the issuance of the 2018 Code of Corporate Governance.
Ahmed stressed the importance of technical sessions, support, consultations, and exposure drafts to ensure widespread stakeholder acceptance and successful adoption of the newly issued guidelines.
Ahmed further acknowledged the vital role of Micro, Small, and Medium Enterprises (MSMEs) as crucial agents of economic prosperity for Nigeria. He emphasized their significant contribution to employment, GDP, and the nation’s global competitiveness.
Recognising the pivotal role they play in the economy, Ahmed stressed the need to provide a robust corporate governance framework specifically designed to support the growth, financing, and overall performance of MSMEs. He reiterated that the successful implementation of such a framework through the SME-CGG 2023 would have a profound impact on the ‘investability’ of MSMEs.
