National President of the Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, has disclosed that Nigeria lost about 20 per cent of its businesses in 2025, warning that their continued survival is being threatened by an increasingly hostile and harsh operating environment.

With Nigeria estimated to have about 40 million micro, small and medium enterprises (MSMEs), he said, roughly eight million businesses were forced to shut down last year, a situation he described as extremely worrisome.

Sharing with The Guardian the association’s 2025 report on MSMEs, Egbesola said this development should be a major concern to a serious government because small and medium-sized businesses remain critical to employment creation, poverty reduction and economic stability.

“Our data from 2025 showed that Nigeria lost 20 per cent of its businesses last year. Ordinarily, this should give any serious government great concern because these businesses create jobs. When they fold up, it means people are also losing their jobs, which in turn increases poverty and insecurity because people will look for any way to survive,” he said.

According to him, despite the tax reforms rolled out by the Federal Government earlier this year, MSMEs and small-scale industries have yet to experience meaningful improvements in their operating environment or a significant easing of doing business.

He said rather than seeing a streamlining of existing taxes, businesses were being confronted with “skyrocketing levies” particularly from state and local governments, which he identified as the worst culprits.

“Every single week, both governments are coming up with outrageous new taxes, fees and levies, demanding immediate payment. No single harmonisation or plans to even harmonise them; this is becoming an unbearable burden to businesses and livelihoods,” Egbesola said.

He said the activities of state and local governments at the subnational level were frustrating businesses to the point where the cost of moving goods across states has become prohibitive.

He noted that a single truck carrying goods is subject to almost 100 different fees and levies when moving from one state to another, describing the practice as a major factor driving up the cost of goods and services. Dispatch motorcycles, he added, are not spared either, as their owners are forced to pay almost 50 different taxes and levies.
 
“The state and local governments at the subnational level are frustrating small businesses so much. A single truck pays almost 100 different fees before it can move from one state to another. This is killing businesses and making goods and services extremely expensive,” he stressed.

Egbesola called for the deployment of technology to harmonise taxes and levies payable to the federal, state and local governments, arguing that such a system would provide businesses with clarity and reduce multiple taxation.

He said an efficient technology-driven tax collection system should enable business owners to know exactly what taxes and levies they are required to pay, the appropriate government authority to pay and the procedure for making such payments.

“We would have expected that the government should be able to employ technology in such a way that all the taxes payable to the local, state and federal governments are harmonised together and are then technologically distributed across state lines.

“An average business owner should be able to know what taxes and levies to pay, who to pay, and how to pay them, and until we get to this point, we will continue chasing our shadows,” he said.

He also expressed concern over what he described as the steady increase in fees being imposed by ministries, departments and agencies (MDAs), saying government agencies established primarily for regulatory purposes are increasingly operating as revenue-generating bodies.

“It is painful that MDAs in Nigeria are steadily increasing their fees and charging for all manner of things. Agencies that are supposed to be regulatory are all now revenue-generating; this is a disgrace,” he said.

He further argued that the proliferation of taxes, levies and regulatory fees was undermining the broader objective of the Federal Government’s ongoing reforms.

According to him, the government cannot claim to be promoting ease of doing business while policies and charges introduced at different levels of government continue to create additional obstacles for enterprises.

“We are paying lip service to the ease of doing business by claiming to solve one problem but creating many more; we cannot continue like this,” he stressed.

Egbesola further expressed dismay that the operating environment had become so difficult that, in some cases, it was becoming more profitable and less expensive for businesses to shut down than to remain operational.

He urged the government to tackle the issues of multiple taxation, excessive levies, and rising regulatory charges “headlong and with sincerity,” warning that continued business closures would have wider consequences for employment, poverty, and insecurity.

He said governments at all levels must urgently move beyond policy declarations and implement practical measures that reduce the cost of doing business, particularly for MSMEs and small-scale industries that have limited capacity to absorb additional costs.

Egbesola maintained that harmonising taxes and levies, reducing unnecessary charges and deploying technology for transparent collection would not only ease the burden on businesses but also make the tax system more efficient and predictable.

He urged the government to recognise that keeping businesses alive should be treated as an urgent economic priority, given their role in creating jobs and sustaining livelihoods across the country.