Feature/OPED
SMEs: Warning Signs of Business Failure in COVID-19 Era
By Timi Olubiyi, Ph.D.
The high failure rate of start-ups and SMEs in Nigeria, give a bleak picture of the sector’s potential to contribute significantly to job creation, economic growth and poverty reduction.
The big question is why do businesses fail so easily? This could be adjudged to the fact that most of the SMEs especially the micro-businesses are unstructured and operate informally in the country.
Nonetheless, when these businesses are in the failing path, the entrepreneur or SME operator is unaware of it happening, until it is often too late.
The survival of SMEs is even a bigger worry this time because of novel coronavirus (COVID-19) related negative impact, harsh business environment, insecurity among others.
With the pandemic, virtually every aspect of our lives is affected, with a significant adverse impact on trade, investment, business sustainability, and employment generation.
The primary objective of this article is to present the causes and predictors of the failure of these SMEs in the country.
In the context of this article, the term failure means any form of closure, either through bankruptcy, liquidation, prevention of further losses, abandon and re-starting another business, and/or due to personal choice (such as early retirement).
Small businesses in the context of this article is defined based on the number of employees in a business entity. Therefore, small and medium enterprises (SME) is a business employing 1 to 200 persons.
However, micro business is defined as entities employing 1 to 9 persons and small businesses employ 10 to 49 persons. In a similar vein, medium enterprises are businesses employing 50 to 199 persons. All businesses that employ from 200 persons and above are termed as big or large enterprises.
It is imperative to state that business failure is the last stage of an organization’s life cycle. The failure of SMEs or any business organization is an event which can produce substantial losses to creditors, stakeholders, and/or stockholder.
While there is multitude of conditions and reasons that can result into business failure, the key predictor of SMEs’ failure and death of businesses is the business environment.
Nigeria, like most African countries, lack basic infrastructure and action plan for businesses to thrive conveniently and the environment is a harsh one for businesses especially start-ups.
Even though small and medium-sized enterprises (SMEs) have been proven to be a catalyst for economic development in countries all around the world, this is not entirely the situation in Africa, including Nigeria.
Sadly, the prevalence of business failure usually impacts negatively on national development and growth of any nation.
The prevalent business failure in Nigeria could be one of the major setbacks to economic growth and high unemployment rate in the country.
Records reveal that SMEs are the largest employers of labor globally and if this vital sector suffers failure predominant, then the level of unemployment in the country might not abate.
From observation around, especially in Lagos State, the economic nerve center, and SME hub of the country, only a fraction of new businesses survives for the first five years and only one-third of new businesses can survive for 10 years.
According to Bloomberg, 8 out of 10 entrepreneurs who start businesses fail within the first 18 months, which is a whopping 80 percent business failure rate.
In addition, it is estimated that the failure rate of SMEs in Nigeria is as many as 80 percent within the five years of operation, according to findings of Stanbic IBTC.
Experts also corroborate these assertions, saying about 80 percent of Small and Medium Enterprises (SMEs) in Nigeria fail within the first five years of their existence due to lack of experience and other wrong business practices.
The anticipated catalyst to this high rate of business failure in Nigeria is the COVID-19 pandemic with the current realities.
We are likely to witness an extremely high post-pandemic business shut down, job loss, and a persistent decrease in outputs and revenue expectations of SMEs in Nigeria.
However, government can do more by rolling out measures to support this SMEs especially through the COVID-19 disruptions.
With government intervention, high number of business failures can be forestalled because the pandemic is already impacting negatively on distribution and supply chain of businesses.
Nonetheless, even though the environment is a critical factor in the ease of doing business, a harsh and difficult one exists in this country with or without COVID-19.
Government action plan and focus is imperative to develop this sector which is widely accepted as economic growth driver.
Recently, a survey conducted on small business in Lagos State indicated that the failure predictors is in two broad categories, namely internal or managerially controllable causes and external or non-controllable causes.
The internal factors the participants of the survey cited are (1) Financial resources like funding inadequacy, lack of profit, poor accounting practice, cash flow inadequacies, lack of viable investment opportunities, and low or no source of income. (2) Physical resources like the company location, abysmal culture, old equipment, and technology issues. (3) Human resources like managerial inadequacy, poor staffing, poor morale and customer dissatisfaction.
Other factors depend on business leaders’ decisions.
Example of this includes no management structure, no differentiation of ownership and management, no succession plan, unprofitable business model, lack of uniqueness, poor knowledge of the operating sector and its value chain, value dysfunctional, even rapid growth and over-expansion was cited, and not in touch with customer needs, etc.
These factors can easily be forecasted with some level of reliability, and therefore, a company has a good chance of reducing this form of business risk.
The company leadership usually have control over internal factors, what is required is just adequate managerial skills and continuous education to set things right.
However, findings indicated that this important feature is usually missing in the SME operators and business leaders.
The external or non-controllable causes of small business failure as perceived by a sample of small business owners and managers surveyed are as follows: government policies, natural factors infrastructure failures and deficits, stiff competition, rising costs of doing business, social, legal and political changes, even common macroeconomic factors such as business cycles, recessions, insecurity, government debt, inflation, high taxation, exchange rates, high-interest rates, excessive regulations, and/or a lack of interest from the public in the business’s offerings are just a few.
The power (electricity) situation in Nigeria has been a great cause for concern for businesses, investors, and citizens at large and is equally significant in the overall performance of the economy.
These infrastructure gaps and weak macroeconomic factors can be blamed on the depressed economy and prevalent business failure in Nigeria.
Because a depressing economy will impact negatively on firm’s sales, which in turn negatively affect firm’s business continuity.
It is imperative to state that these macroeconomic factors and external causes cannot be controlled or forecasted by entrepreneurs and SME operators.
Consequently, it poses a big risk to businesses unless government intervene decisively and give the needed policy responses. This is the big prayer of all SMEs and entrepreneurs in the country.
The warning signs of failure of SMEs are either one or the multiplicity of internal and external factors mentioned above.
SMEs can also fail if the business lack a contingency plan to react and mitigate any of the challenges in the event of any crisis.
The best way to manage and mitigate business failure due to these factors is to maintain an adequate level of capital.
A company with adequate financial resources can more effectively weather some level of business risk. Even at that, it is important to state that the prevalence of business failure is a vital indicator of the state of economy in any country.
Conclusively, despite the high rate of business failure much is still desired, if 80 percent of new businesses fail, according to Bloomberg, then 20 percent of new businesses can succeed and this percentage can also scale up. But how? Whether you desire to start a new business or you are already running a business, you must understand that success depends on careful strategic planning and sound fiscal management.
SME operators need to critically identify the actual business growth drivers and leverage strongly on them for sustainable business study.
With the COVID-19 pandemic forcing most SME operators to work remotely or even stay at home, this new normal could affect service quality and also cause severe business disruption.
Therefore, entrepreneurs need to understand the current competitive marketspace, customers’ needs and their current buying habits.
For SME operators to stem the tide of the current realities, effective communication with employees and customers is necessary to thrive, this can be achieved with effective use of technology and mobile telephony.
Furthermore, strategy to mitigate the predictors of business failure along with adequate business process review needs to be in place to cope with the operational stress generated by COVID-19.
Additionally, it is key to leverage on technological innovation and adopt a workable risk management strategy. When this strategy is in place, companies can anticipate the risks and respond appropriately to guarantee business sustainability. Good luck!
How may you obtain advice or further information on the article?
Dr. Timi Olubiyi holds a Ph.D. in Entrepreneurship and Small Business Management. He is a prolific investment coach, Chartered Member of the Chartered Institute for Securities & Investment (CISI) and a financial literacy specialist. He can be reached on the twitter handle @drtimiolubiyi and via email: [email protected],for any questions, reactions, and comments.
Feature/OPED
How Nigerians Search is Changing — and Why it Matters for our Businesses
By Olumide Balogun
There was a time when using a search engine felt like cracking a code. You typed two or three carefully chosen keywords, hoped the machine understood, and waited to see what came back. People had to learn the language of machines, shrinking complex needs into stilted phrases.
That era is ending. Today, a person can ask a question the same way they would ask a colleague, and the technology is finally learning to respond in kind. Nowhere is this shift more visible than in Nigeria, where a young, mobile-first population expects tools to keep pace with how they actually think and speak.
This change carries weight far beyond convenience. It is reshaping how Nigerian businesses reach customers and how customers find what they need.
For years, marketing online meant wrestling with rigid keyword lists. A small business owner had to guess every possible phrase a customer might type. If you sold ankara dresses, you tried “ankara dress,” “Nigerian print fabric,” “traditional wear Lagos,” and a dozen variations, hoping you covered the gaps. Anything you missed was a missed customer
The new wave of conversational search makes those lists feel ancient. People now ask layered, specific questions: “Where can I find a sustainable tailor in Yaba who makes office wear?” Older systems would have stumbled on a query like that. Newer ones, powered by artificial intelligence, can read intent and stitch ideas together. They connect a question to a relevant local website that a basic keyword search might never have surfaced.
The shift is starting to show up in concrete tools. Google’s AI Max for Search ads, now a year old, is one of the more visible examples. In plain terms, it lets a business describe what it sells and who it serves in everyday language, and the system figures out which searches to match it to, instead of forcing the owner to write hundreds of keywords by hand. Early adopters report stronger revenue growth than peers, and users say results feel more useful because the technology connects ideas for them, often surfacing local sites that would not have appeared before.
There is a quieter benefit too. When advertising becomes more relevant, it stops feeling like an interruption. An ad that answers a real question is no longer noise; it is information. That changes the texture of the internet. The marketplace gets less cluttered, and people spend less time wading through results that do not fit what they were looking for.
None of this is automatic. The technology only works if it can understand human nuance, and human nuance in Nigeria is not the same as human nuance in California. A search for “owambe outfit” or “small chops for fifty people” demands cultural context, not just linguistic translation. Newer features try to bridge that gap. AI Brief, a part of the same Google toolkit, lets a business owner type plain instructions, like “focus on sustainable traditional wear, keep a premium tone,” and the system follows them. This is steering by intent, not by keyword bingo.
There are gains for businesses with deep catalogues too. A retailer with thousands of items no longer has to match every question to the right page by hand. Tools such as Google’s Final URL Expansion read the search and send the customer straight to the page that fits, in real time. In travel, finance, and healthcare, where compliance matters, the same systems can carry mandatory legal text into every ad automatically. Regulated industries can grow without cutting corners.
These are not abstract wins. They are the difference between a small business being found by a customer in Abuja at 9 p.m. and being lost in a sea of generic results, between a hospital reaching the right patient and a tailor in Surulere being discovered by a bride planning her wedding.
We should not pretend the transition is finished. AI is imperfect. It can misread context, amplify mistakes, and require careful oversight. Regulators, businesses, and users all have a role in shaping how it develops in our market. The broader direction, however, is clear, and it is one Nigeria should engage with rather than resist.
Nigeria is a nation of storytellers and traders. Our markets, physical and digital, have always been about conversation. The technology of search is finally beginning to mirror that. It is becoming less of a vending machine and more of a market stall, where you can ask a question, get a real answer, and discover something you did not know you needed.
That is the bigger story behind any single product launch. It is about how a country full of voices is finding new ways to be heard. For Nigerian businesses willing to adapt, the opportunity has never been clearer.
Feature/OPED
Guide to Employee Training That Reinforces Workplace Safety Standards
Workplace safety is not sustained by policies alone. It is built through consistent training that shapes daily behaviour, decision-making, and accountability across every level of an organisation. When employees understand not only what safety rules exist but why they matter, they are far more likely to follow them and intervene when risks arise. Effective safety-focused training protects workers, strengthens operations, and reduces costly incidents that disrupt productivity and morale.
As industries evolve and workplaces become more complex, employee training must go beyond basic orientation sessions. Reinforcing safety standards requires an ongoing, structured approach that adapts to new risks, changing regulations, and real-world job demands. A thoughtful training strategy helps create a culture where safety is a shared responsibility rather than a checklist item.
Establishing a Foundation of Safety Awareness
The first purpose of workplace safety training is awareness. Employees cannot avoid hazards they do not understand. Comprehensive training introduces common workplace risks, clarifies acceptable behaviour, and sets expectations for personal responsibility. This foundational knowledge empowers employees to recognise unsafe conditions before incidents occur.
Safety awareness training should be tailored to the specific environment in which employees work. Office settings require education on ergonomics, electrical safety, and emergency evacuation procedures, while industrial workplaces demand detailed instruction on machinery risks, protective equipment, and material handling. When training reflects actual job conditions, employees are more engaged and better equipped to apply what they learn.
Clear communication is essential during this stage. Using plain language and real examples helps employees connect training concepts to daily tasks. When safety awareness becomes part of how employees think and talk about their work, it begins to shape behaviour consistently across the organisation.
Integrating Safety Training into Daily Operations
Safety training is most effective when it is integrated into everyday work rather than treated as a one-time event. Ongoing reinforcement ensures that safety standards remain top of mind as tasks, equipment, and responsibilities change. Regular training sessions create opportunities to refresh knowledge, address new risks, and correct unsafe habits before they lead to injury.
Incorporating short safety discussions into team meetings helps normalise these conversations. Supervisors play a critical role by modelling safe behaviour and reinforcing expectations during routine interactions. When employees see safety emphasised alongside productivity goals, it reinforces the message that both are equally important.
Hands-on training also strengthens retention. Demonstrations, practice scenarios, and real-time feedback allow employees to apply safety principles in controlled settings. This experiential approach builds confidence and reduces hesitation when employees encounter hazards in real situations.
Aligning Training with Regulatory Requirements
Workplace safety training must align with applicable regulations and industry standards to ensure legal compliance and worker protection. Laws and regulations change frequently, making it essential for organisations to keep training materials updated. Failure to do so can expose employees to unnecessary risk and organisations to legal consequences.
Training programs should clearly explain relevant safety regulations and how they apply to specific roles. Employees are more likely to comply when rules are presented as practical safeguards rather than abstract mandates. Documenting training completion and maintaining accurate records also demonstrates organisational commitment to compliance.
Many organisations rely on support from compliance training companies to navigate complex regulatory landscapes and design programs that meet both legal and operational needs. These partnerships can help ensure training remains accurate, consistent, and aligned with evolving requirements without overwhelming internal resources.
Encouraging Participation and Accountability
Effective safety training depends on active participation rather than passive attendance. Employees should be encouraged to ask questions, share concerns, and contribute insights based on their experiences. When workers feel heard, they become more invested in maintaining a safe environment.
Creating accountability is equally important. Training should clarify individual responsibilities and outline the consequences of ignoring safety standards. Employees need to understand that safety is not optional or secondary to performance goals. Reinforcement from leadership ensures that unsafe behaviour is addressed consistently and constructively.
Peer accountability also strengthens safety culture. When training emphasises teamwork and shared responsibility, employees are more likely to watch out for one another and intervene when they see risky behaviour. This collective approach reduces reliance on supervision alone and builds resilience across the workforce.
Adapting Training for Long-Term Effectiveness
Workplace safety training must evolve alongside organisational growth and workforce changes. New hires, role transitions, and technological updates introduce risks that require refreshed instruction. Periodic assessments help identify gaps in knowledge and opportunities for improvement.
Data from incident reports, near misses, and employee feedback provides valuable insight into training effectiveness. Adjusting content based on real outcomes ensures that training remains relevant and impactful. Organisations that treat training as a dynamic process are better equipped to respond to emerging risks.
Long-term effectiveness also depends on reinforcement beyond formal sessions. Visual reminders, updated procedures, and accessible reporting tools help sustain awareness. When safety standards are supported through multiple channels, employees receive consistent cues that reinforce training messages daily.
Conclusion
Reinforcing workplace safety standards through employee training requires intention, consistency, and adaptability. Training that builds awareness, integrates into daily operations, aligns with regulations, and encourages accountability creates a safer environment for everyone involved. When employees understand their role in maintaining safety, they are more confident, engaged, and prepared to prevent harm.
A strong training program is not simply a compliance exercise. It is an investment in people and performance. Organisations that prioritise meaningful safety training protect their workforce while fostering trust, stability, and long-term success.
Feature/OPED
Debt is Dragging Nigeria’s Future Down
By Abba Dukawa
A quiet fear is spreading across the hearts of Nigerians—one that grows heavier with every new headline about rising debt. It is no longer just numbers on paper; it feels like a shadow stretching over the nation’s future. The reality is stark and unsettling: nearly 50% of Nigeria’s revenue is now used to service debt. That is not just unsustainable—it is suffocating.
Behind these figures lies a deeper tragedy. Millions of Nigerians are trapped in what experts call “Multidimensional Poverty,” struggling daily for dignity and survival, while a privileged few continue to live in comfort, untouched by the hardship tightening around the nation. The contrast is painful, and the silence around it is even louder.
Since assuming office, Bola Ahmed Tinubu has embarked on an aggressive borrowing path, presenting it as a necessary step to revive the economy, rebuild infrastructure, and stabilise key sectors.
Between 2023 and 2026, billions of dollars have been secured or proposed in foreign loans. On paper, it is a strategy of hope. But in the hearts of many Nigerians, it feels like a gamble with consequences yet to unfold.
The numbers are staggering. A borrowing plan exceeding $21 billion, backed by the National Assembly, alongside additional billions in loans and grants, signals a government determined to keep spending and building. Another $6.9 billion facility follows closely behind. These are not just financial decisions; they are commitments that will echo into generations yet unborn.
And so, the questions refuse to go away. Who will bear this burden? Who will repay these debts when the time comes? Will it not fall on ordinary Nigerians already stretched thin to carry the weight of decisions they never made?
There is a growing fear that the nation may be walking into a future where its people become strangers in their own land, bound by obligations to distant creditors.
Even more troubling is the sense that something is not adding up. The removal of fuel subsidy was meant to free up resources, to create breathing room for meaningful development.
But where are the results? Why does it feel like sacrifice has not translated into relief? The silence surrounding these questions breeds suspicion, and suspicion slowly erodes trust. As of December 31, 2025, Nigeria’s public debt has risen to N159.28 trillion, according to the Debt Management Office.
The numbers keep climbing, but for many citizens, life keeps declining. This disconnect is what hurts the most. Borrowing, in itself, is not the enemy. Nations borrow to grow, to build, to invest in their future. But borrowing without visible progress, without accountability, without compassion for the people, it begins to feel less like strategy and more like a slow descent.
If these borrowed funds are truly building roads, schools, hospitals, and opportunities, then Nigerians deserve to see it, to feel it, to live it. But if they are funding excess, waste, or luxury, then this path is not just dangerous—it is devastating.
Nigeria’s growing loan profile is a double-edged sword. It can either accelerate development or deepen economic challenges. The key issue is not just borrowing, but what the country does with the money. Strong governance, transparency, and investment in productive sectors will determine whether these loans become a foundation for growth or a long-term liability. Because in the end, debt is not just an economic issue. It is a moral one. And if care is not taken, the price Nigeria will pay may not just be financial—it may be the future of its people.
Dukawa writes from Kano and can be reached at [email protected]
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