Nigeria’s micro, small, and medium enterprises are reportedly losing between N5 trillion and N10 trillion each year due to employee fraud and workplace corruption.
The Centre for the Promotion of Private Enterprise disclosed this in a statement shared with Nairametrics on Sunday.
The policy think-tank described the trend as one of the most serious hidden threats to the country’s entrepreneurial economy.
The CPPE noted that occupational fraud has quietly become a major drain on business sustainability, profitability, and overall economic growth.
The organisation cautioned that employee corruption is no longer just a managerial issue but a strategic economic risk that requires coordinated action from business owners, regulators, and policymakers.
According to CPPE’s analysis, internal fraud and employee-related corruption are responsible for trillions of naira in yearly losses across Nigeria’s MSME sector.
“Employee corruption and occupational fraud constitute one of the largest hidden drains on Nigeria’s entrepreneurial economy, with annual losses ranging from N5–N10 trillion,” the CPPE said.
The group also pointed out that these practices weaken government revenue by reducing tax collections.
Much of the fraud goes unreported, meaning the actual economic impact could exceed current estimates.
“For Nigeria’s MSME sector to realise its full potential as an engine of growth, fraud prevention, governance strengthening, and digital transparency must become central pillars of enterprise policy and business practice,” CPPE added.
“While occupational fraud affects all MSME segments, risk exposure is highest in sectors characterised by cash intensity, weak documentation, inventory handling, and dispersed supervision,” the statement noted.
The findings illustrate how widespread occupational fraud has become, quietly undermining the foundation of Nigeria’s private sector.
The policy centre explained that certain operational features make some MSMEs more vulnerable than others.
Sectors that handle large amounts of cash, depend on inventory management, or have weak documentation and dispersed supervision face the greatest risk.
Retail trade, small-scale manufacturing, distribution businesses, hospitality, and field-based services are particularly exposed due to frequent cash handling and limited internal controls.
Common fraud methods include revenue diversion, payroll manipulation, procurement inflation, inventory theft, ghost workers, and unauthorized discounts or write-offs. The CPPE stressed that understanding these patterns is essential to crafting effective prevention strategies.
Global studies on occupational fraud, especially long-running international workplace-fraud surveys, generally estimate that companies lose 5 to 10 percent of annual revenue to employee-related fraud.
Nairametrics recently reported that Nigeria ranked 142nd in the 2025 Corruption Perception Index (CPI) released by Transparency International (TI).
The ranking underscores the country’s long-standing challenges in combating systemic corruption, despite repeated efforts by successive governments.
Over time, Nigeria has created anti-corruption agencies and introduced reforms, but progress has remained inconsistent.
