Employee Fraud Costs Nigeria N10 Trillion Annually

Dr. Muda Yusuf, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), disclosed that employee fraud costs Nigeria approximately N10 trillion annually, particularly affecting the micro, small, and medium enterprises (MSME) sector.

This loss, attributed to employee corrupt practices, undermines profits, suppresses investment, and ultimately weakens job creation, thereby impacting government revenue and economic growth. Yusuf emphasized that MSMEs are crucial to Nigeria's economy, contributing roughly 50% of the nation's output.

However, challenges such as inflation, weak purchasing power, high operational costs, and infrastructure deficits hinder their growth. The prevalence of employee fraud, often less visible yet deeply corrosive, is exacerbated by poor internal controls and a heavy reliance on cash transactions, which limits audit capabilities and recovery rates.

With profit margins often below 15%, MSMEs face significant revenue losses, leading to business closures and high failure rates, with studies indicating that 80% of small businesses fail within five years. Yusuf advocates for enhanced governance and digital transparency as essential strategies for combating fraud in the MSME sector.