Analyst says Simplified IFRS, Regulatory Reforms Key to Unlocking SME Growth

A United States-based financial analyst, Tunde Magbadelo, has urged the Nigerian government to adopt simplified International Financial Reporting Standards (IFRS) and implement coordinated regulatory reforms to ease the compliance burden on small and medium-sized enterprises (SMEs).

Magbadelo, a Chartered Accountant and Managing Partner at MyAnchor Consulting, said Nigeria’s existing regulatory framework places disproportionate pressure on SMEs, discouraging formalisation and limiting their growth prospects.

“Nigerian SMEs are over-regulated and under-supported,” he told our correspondent. “The financial reporting obligations, though well-intentioned, are often too complex for small firms — especially those without in-house expertise. What we need is proportional accountability, not excessive bureaucracy.”

With over a decade of cross-continental experience advising private firms and nonprofits, Magbadelo currently oversees multi-divisional budgeting and financial planning at The Electric Motor Repair Company in Maryland, U.S. He holds an MSc in Finance Analytics from American University in Washington, D.C.

He noted that while frameworks such as IFRS for SMEs already exist globally, Nigeria must localise and enforce them more deliberately. He also advocated for the deployment of digital compliance platforms that centralise tax filing, business registration, and financial disclosures.

“Adopting a graduated compliance model would allow small firms to grow into full IFRS obligations, rather than be overwhelmed from the start,” he said.

Magbadelo further identified several challenges confronting SMEs in the financial reporting space, including limited access to affordable credit for system upgrades, high implementation costs of internal controls, persistent cash flow constraints, and a lack of understanding about the long-term benefits of financial system investments.

“These financial constraints trap SMEs in a cycle of underdevelopment,” he said. “Without proper financial systems, they struggle to access formal credit, which then stunts their ability to scale and professionalise.”

To address these issues, he recommended the establishment of one-stop shops for business registration, tax enrolment, and regulatory compliance, as well as the rollout of digital platforms tailored for simplified reporting. He also called for tiered compliance requirements based on enterprise size and operational complexity.

Citing data from the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Magbadelo noted that while the country is home to over 39 million micro, small, and medium enterprises, only a fraction are formally registered or maintain audited financial records which is a critical requirement for accessing loans and investor capital.

“If we want SMEs to drive economic diversification and job creation, then financial systems must stop being gatekeepers and start being enablers,” he said.