Lagos: The Centre for Enterprise Governance (CEG) has emphasized the importance for Micro, Small and Medium Enterprises (MSMEs) in Nigeria to adopt basic governance structures in order to remain compliant, competitive, and financially viable amidst the implementation of the country’s new tax reforms.
According to News Agency of Nigeria, CEG Founder Dr. Adeyinka Hassan highlighted in an interview in Lagos the serious risks MSMEs face in a compliance-driven business environment without basic governance structures. He stated that governance is no longer optional for small businesses as Nigeria progresses towards systematic accountability and formalization.
CEG’s strategic plan identifies governance as the cornerstone for enterprise resilience, access to finance, and socioeconomic value creation. Hassan explained that as tax reforms expand compliance expectations and enforcement capacity, MSMEs lacking governance structures encounter existential risks, whereas those with governance are better equipped to adapt and grow.
The governance expert pinpointed recurring weaknesses among MSMEs, including informal decision-making, weak financial management, poor record keeping, lack of internal controls, and limited understanding of tax and regulatory obligations. These deficiencies often lead to incorrect tax filings, disallowed expenses, penalties, interest charges, and disruptive audits.
Hassan noted that many MSMEs mistakenly view governance as an issue for large corporations, a mindset he described as risky in the current operating environment. Without governance, small businesses risk losing credibility, access to funding, and partnership opportunities essential for growth.
He outlined basic governance structures every MSME should implement, such as clear roles and authority, basic financial controls, proper documentation, compliance ownership, and periodic advisory support. These measures help MSMEs respond confidently to tax reforms, ensure accurate filings, avoid disputes, and demonstrate credibility to regulators and financiers.
The new tax reforms present opportunities for well-governed MSMEs, enhancing access to finance, eligibility for government and donor programs, stronger partnerships, and long-term sustainability. Hassan explained that banks, investors, and public agencies prioritize transparency, accountability, and compliance discipline. CEG’s governance and credit-readiness clinics are designed to assist MSMEs in meeting these expectations.
Hassan advised MSMEs to prioritize formalizing records, separating personal and business finances, establishing compliance routines, and seeking structured governance education in the new year. Governance can be strengthened without significant cost through shared infrastructure, collective training, mentorship, and standardized tools.
The governance expert cautioned MSMEs against treating compliance as an annual exercise, neglecting documentation until enforcement arises, or operating without advisory support. He emphasized that governance is the operating system of sustainable enterprise, converting compliance into a competitive advantage.
CEG remains committed to supporting MSMEs through governance education, partnerships, and structured membership to bolster resilience, credibility, and long-term success.