A momentous gathering of key players in Nigeria’s corporate governance landscape took place in Lagos, marking a significant step in the ‘SME Future-Forward Project’ that aims to revolutionize the corporate governance, ethics, and sustainability of Micro, Small, and Medium Enterprises (MSMEs) which form a staggering 96 percent of the country’s businesses.
The event, funded by the MacArthur Foundation, brought together representatives from the private sector, business membership organizations (BMOs), and government regulatory agencies to deliberate on the draft exposure document concerning the Small and Medium Enterprises’ Corporate Governance Guidelines (SME-CGG) for MSMEs in Nigeria. The main objective was to elicit feedback, recommendations, and insights to institutionalize best corporate governance practices within SME entities.
Naomi Nwokolo, the Executive Director of UN Global Compact Network Nigeria, emphasized the importance of the guidelines in enhancing Nigeria’s business environment, ensuring the longevity and sustainability of MSMEs, and ultimately bolstering business confidence, access to capital, and trade opportunities for compliant entities.
Recognizing the crucial role of SMEs in the Nigerian economy – comprising 96 percent of the marketplace and accounting for 84 percent of national employment – Nwokolo stressed the need to align corporate governance practices with international standards. Such alignment would not only enhance competitiveness but also attract investments and contribute significantly to achieving the Sustainable Development Goals (SDGs).
Soji Apampa, the Executive Director of Integrity Organization, underscored the significance of the SME Future-Forward Project. He highlighted a 2016 OECD study that revealed most corruption is facilitated through intermediaries, including professionals working in small and medium enterprises. Developing these guidelines represents a crucial milestone in addressing such issues and fostering a cultural shift away from corrupt behavior. To drive sustainable change, Apampa emphasized the importance of regulators like the Financial Reporting Council of Nigeria (FRC) in creating systems to monitor compliance, measure the initiative’s success, and incentivize behavior modification among the public.
Shuaibu Adamu Ahmed, the Executive Secretary of the FRC, lauded the SME-CGG 2023 draft, emphasizing its alignment with the broader mandate of the FRC to promote good corporate governance across various sectors of Nigeria’s economy. Ahmed highlighted the FRC’s decade-long journey in developing corporate governance codes for the public, private, and non-profit sectors, culminating in the issuance of the 2018 Code of Corporate Governance.
Ahmed acknowledged the significance of technical sessions, support, consultations, and exposure drafts in ensuring widespread stakeholder acceptance and successful adoption of the guidelines. He further emphasized the pivotal role of MSMEs in contributing to employment, GDP, and Nigeria’s global competitiveness. Thus, Ahmed stressed the need for a robust corporate governance framework specifically designed to support the growth, financing, and overall performance of MSMEs, recognizing its potential to significantly boost the investability of these vital economic agents.
