Economy
Here Today, Gone Tomorrow: 60 Causes of Small Business Failure in Nigeria
By Timi Olubiyi, PhD
Despite the significance of small and medium enterprises (SMEs) to the economy and national development, Africa has a high rate of business failures and short-lived businesses.
In Nigeria SMEs account for 48 per cent of the national gross domestic product (GDP), 96 per cent of businesses, and 84 per cent of employment in the country, according to a PricewaterhouseCoopers (PwC) report.
In contrast, due to the country’s dire economic circumstances, at least 1.9 million SMEs have been lost since 2017, according to the report, yet business closures persist at an alarming rate.
Why do so many businesses fail so quickly, be they structured or unstructured? It can be attributed to many challenges, and this is the focus of this piece.
In the context of this article, the word “failure” refers to any kind of closure, including bankruptcy, liquidation, stopping further losses, giving up and starting a new business, and/or closing by choice (like retiring early or shutting down).
According to the author’s observations, small businesses, especially those with one to nine staff, are prevalent, mostly unstructured, and largely operating informally throughout the country.
Convenience shops and grocery stores, dry cleaning and laundromat services, taxi services, trucking and transportation businesses, beauty salons, local restaurants, and several other small businesses operate with no data sets or registration databases.
For instance, in Lagos State, most of these small businesses are overwhelmingly dominated by people moving in from other states of the country, largely due to the fact that barriers to entry into the business ecosystem are low, and there is no compulsion for registrations or certifications, and the start-up capital is usually low.
The worry is that many of these business operators are inexperienced and pay no attention to business structure, technology, skill sets, accountability, or the importance of business continuity. Therefore, business failures keep getting worse without any known help.
In fact, it is hard to see how the sector can make a big difference or impact in creating jobs, growing the economy, and reducing poverty. Business failure is the last stage of the business life cycle. However, it is so prevalent that it happens within the first five years of a significant number of SMEs in Nigeria and the rate is alarming.
Even though the environment is a key part of how easy it is to do business, it is still harsh and hard in the country, with or without post-COVID-19 consequences. Truly, there are many problems with the economy’s supply chain and infrastructures, such as the price of diesel, problems with the foreign exchange market, and regulations that hurt businesses.
Many of the business failure factors are frequently categorized as “poor management or lack of access,” though the failure predictors are in two broad categories: internal factors (controllable) and external factors (uncontrollable).
Without a systematic outline and identification of the many challenges faced by small businesses, here are the most common business failure factors in the country that operators need to pay attention to low quality or low level of education and qualification of operators and workforce; lack of manpower, loss of seasoned personnel and management due to social mobility and relocation (Japa), resulting in skill shortages within the business and inability to attract and retain new highly qualified personnel; lack of an appropriate corporate governance structure and organogram in the case of the few structured SMEs; Customer dissatisfaction due to a low product or service quality; poor customer experience and declining patronage.
A variety of funding issues are also relevant to business failures, including no or low business capital or profitability, revenue erosion (in some cases referred to as undercapitalization), insufficient cash flow or cash reserve, and excessive reliance on borrowed funds (high leverage).
Poor accounting practice, teeming, and lading can also result in business failures. The absence of adequate marketing channels, poor market knowledge, outdated services and products, and not being in touch with customer needs (for illustration, dealing in Nokia 3310-related accessories or phone sales when the market demand is for Android phones).
Poor and negative customer relations; poor pricing techniques; lack of innovative drive, ignoring product or service innovations and new ideas; ignoring competitors’ pressure and offerings; resource mismanagement; undue family influence and control in the business operations can kill businesses.
Further to this, poor internal communication, lack of free flow of business information, and fraudulent acts by employees, including legal tussles, can also be contributory to the failures.
Others are ineffective and reckless leadership tendencies, a high cost of running the business, huge overhead, and an inability to control expenses, inappropriate response to new external and/or internal challenges, lack of strategic and business planning (competitor analysis, marketing analysis, risk analysis, opportunity and threat analysis). under-estimating or over-estimating risks in the marketplace, among others.
There is also the failure to recognise and capitalise on new market opportunities, intense competition, and adherence to ineffective competitive formulas or strategies. Another is being outwitted by competitors or even former employees; and relying too heavily on one or a few clients’ patronages are also attributable.
Leadership tussles and conflicts within management, business owners, and/or power struggles cannot be ignored. Failure to provide value for money can make customers disgruntled and avoid patronage.
Poor inventory management, and failure to differentiate products and services in a highly competitive environment. and the strong bargaining power of buyers can cause business failure. In the era of globalization, e-commerce, and high adoption of technology, any old equipment, machinery, or technology issues can make a business fail. Low or no online visibility, inadequate technological adoption, or failure to take advantage of new technological advances can also adversely affect businesses.
Largely unforeseen mishaps can happen, failing to learn from this or one’s errors, and the repetition of such errors and poor decision-making can have huge consequences. Overlapping responsibilities in the case of one-man businesses where the owner claims to be an expert in all departments and business functions can make the business fail. Where there is no distinction between ownership and management and there is an excessive concentration of authority, including excessive administrative rule imposition on subordinates and employees, it can ruin a business.
From the government side, unanswered macroeconomic challenges, economic instability, multiple taxation, no ease of doing business, regulatory hurdles and multiple permits, and a harsh economic climate are just some of the negative factors. Poor infrastructure, bad roads, erratic power supply, limited access to government grants and support, and much more, particularly power and the cost of generating alternative power are also some factors.
Further to this, the rising costs of doing business, inflation, irregular policies, the judicial system where disputes linger for several years, and political influence and interest, including corruption, are all part of the factors attributable to business failure.
Even common macroeconomic factors like recessions, insecurity, government debt, exchange rates, and high-interest rates, 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 prevalence of business failure in Nigeria. The turn-around time at the ports, and congestion on the roads, are all imperative causes of business failures in the country and cannot be controlled by entrepreneurs and SME operators.
Consequently, it poses a big risk to businesses unless the government intervenes decisively and gives the needed policy responses. This is the big prayer of all SMEs and entrepreneurs in the country.
Above all, the culture of not seeking expert opinion, advice, and consultation for problem-solving is the overall bane of SME operators or owner-managers.
One or more of the above-mentioned factors are warning indications of business failure. SMEs must pay close attention to these indicators as soon as they appear, in order to avoid a crisis. Maintaining an appropriate structure, adequate capital, and having contingency plans are some of the best strategies to control and reduce business failure that these factors can cause. Further prerequisites for small business success may just be the next article from the author. Good luck!
How may you obtain advice or further information on the article?
Dr Timi Olubiyi is an Entrepreneurship & Business Management expert with a PhD in Business Administration from Babcock University Nigeria. He is also a prolific investment coach, author, seasoned scholar, Chartered Member of the Chartered Institute for Securities & Investment (CISI), and Securities & Exchange Commission (SEC) registered capital market operator. He can be reached on the Twitter handle @drtimiolubiyi and via email: dr***********@***il.com, for any questions, reactions, and comments.
The opinions expressed in this article are that of the author- Dr Timi Olubiyi and do not necessarily reflect the views of others.
By Adedapo Adesanya
The seven-member subgroup of oil producers under the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) is set to extend a series of output quota hikes by 188,000 barrels per day when they meet on Sunday, July 5.
The small group launched the hikes after the US and Israeli forces struck Iran in late February, setting off the latest war in the Middle East.
According to Reuters, the OPEC+ subgroup, including Saudi Arabia, Russia, Iraq, Kuwait, Algeria, Kazakhstan, and Oman, will likely decide to boost their production quotas for August by another 188,000 barrels daily, after last month agreeing a same-size production boost for July, which, unlike the previous hikes, may actually take place.
OPEC+ has been hiking production almost since the war began, but these hikes have remained on paper as production in the Persian Gulf remained paralysed by the hostilities and Iran’s decision to close the Strait of Hormuz.
This decision forced Gulf producers to stock up after shutting in wells. Iraq was especially hard hit by the Hormuz shutdown, with its production dropping from over 4 million barrels daily to less than 2 million barrels daily while the United Arab Emirates (UAE) started shipping record volumes of crude abroad, right after it quit OPEC.
After six decades as a member, the Emirates decided to reduce the group members to 11 after it pulled out, sparking predictions that they would immediately start boosting production, but for now, the country is only boosting exports.
The Iran war has led to a sharp drop in production among key members, with OPEC+ output dropping to 33.13 million barrels per day in May, according to OPEC data, from 42.77 million barrels per day in February.
Still, oil prices have returned to pre-war levels, pressured by weaker Chinese imports, higher exports from non-Middle East producers, a record strategic stock release coordinated by the International Energy Agency (UAE) and the US-Iran memorandum of understanding to end the war that helped ease supply concerns.
Economy
Binance Connectivity in 2026: Why Some Traders Now Rely on Proxy Servers and What to Watch For
Binance is still the world’s largest cryptocurrency exchange by trading volume, but access to it has become one of the more complicated conversations in the digital asset space. Some countries retain full access. Others sit in a grey zone where the platform loads but key features are missing. A few, including Nigeria at various points in the last two years, have moved between “available” and “restricted” on very short notice.
The result is that a growing number of traders, particularly in markets where regulatory action has been sharp and sudden, have begun using proxy servers to manage their connection to the exchange. The practice is more common than most traders will admit publicly. This article walks through why it is happening, the actual mechanics, the risks that come attached, and what to check before setting anything up.
Why Some Regions Restrict Binance Access
Binance operates in more than 100 countries, but the list of jurisdictions with full or partial blocks has been growing rather than shrinking. It is worth understanding that a full block is only one form of restriction.
- International sanctions. Binance is prohibited from serving customers in countries such as Iran, Cuba and North Korea under OFAC rules, with additional UN and EU sanction regimes layered on.
- Regulatory exits. In some markets, Binance either did not obtain or did not pursue local licensing. The United States saw the earliest such move, with Binance withdrawing and being replaced by a separate US-facing platform in 2019.
- Government bans. Some governments have moved quickly and with minimal notice. Nigeria transitioned from active access to a heavily restricted status over the course of a few days in early 2024, following a broader crackdown by authorities on cryptocurrency platforms, a case that traders here remember well.
- Binance Futures. Not available in 44 countries, including all EU member states, the UK, Australia and Canada.
- Staking and lending. Disabled in the UK, Canada, Australia and Japan.
- Fiat deposits. Removed in a number of markets, including the eurozone and Canada.
For Nigerian traders in particular, the ongoing tension between the Central Bank of Nigeria, the Securities and Exchange Commission and international exchanges has produced a shifting landscape. Access that works today is not guaranteed to work next month, and prudent traders have started to prepare for both scenarios.
How Proxy Servers Enter the Conversation
A Binance proxy server sits between your device and the exchange. Instead of your real IP address reaching Binance, the proxy’s IP does. From Binance’s perspective, the connection appears to originate wherever the proxy is located. For traders in restricted regions, this becomes a way to route their connection through a country where the exchange remains accessible.
Geographic access is not the only reason traders use proxies, though it is the most common.
Controlling API Rate Limits
Binance allows 1,200 requests per minute per IP. For traders running bots across multiple pairs simultaneously, that ceiling is reached quickly. Rotating proxies spread requests across different IPs so the bot continues without being throttled.
Running Multiple Accounts
Binance tracks multiple accounts originating from the same IP address. Traders operating several accounts use different proxies for each to keep the accounts from being associated with one another.
Accessing Region-Specific Features
Available tokens, trading pairs and pricing vary across regions. Traders can view and interact with region-specific offerings by routing through the relevant location.
Keeping WebSocket Connections Stable
Real-time price feeds and order book data run over WebSocket connections. Binance may throttle these if requests from a single IP look irregular. Clean residential IPs help hold those streams stable and reduce reconnection loops.
Security and Account Risks Traders Should Watch
Binance Uses Multiple Signals to Detect Location
IP is only one factor. On mobile, Binance also verifies GPS location, SIM card country code and device fingerprint. Mismatches raise flags. A proxy IP that shows the United States while the SIM card is registered in a restricted country is exactly the kind of inconsistency the system is designed to catch.
Mid-Session IP Switching Can Trigger Verification
Changing IPs while already logged in is one of the fastest ways to receive an additional verification prompt or a temporary account freeze. This is why sticky sessions matter — holding a single IP for an extended period rather than rotating aggressively.
Dirty IPs Are a Real Problem
Not every proxy IP is clean. Shared or previously compromised addresses may already have a history of suspicious activity attached, and Binance may have flagged them before you connect. A provider with a well-maintained IP pool reduces this risk substantially.
Funds Can Be Frozen
Binance may freeze accounts quickly if it detects unusual activity or determines that the account is being accessed from a restricted region. Recovery through support can take time, and in some cases access is not restored at all.
Choosing Between Residential, Mobile and Datacenter Proxies
Residential Proxies
Residential proxies use IP addresses assigned to real home internet connections. They appear as normal user traffic and are much harder for Binance to flag. This is the most common recommendation for traders needing consistent access. They are slower than datacenter and more expensive.
Mobile Proxies
Mobile proxies use IPs from real cellular carriers. Because mobile networks share IPs across many users naturally, distinguishing individual traffic is difficult. These are the strongest choice for traders in higher-risk areas who prioritise clean connections. They are also the most expensive option.
Datacenter Proxies
Datacenter proxies are fast and cheap, but Binance has invested heavily in detecting them. They originate from server farms rather than real devices, which makes them straightforward to identify as non-human traffic. They can still work for casual browsing and API data collection, but they are more likely to be blocked for account access in restricted regions.
What to Watch For When Setting Up
Match Your Proxy Location to Your KYC Country
If your account was verified with documents from one country and your proxy routes you through another, the mismatch can trigger review. Choose a proxy address that lines up with the country on your account.
Use Sticky Sessions for Account Access
Proxies that rotate IPs frequently are useful for scraping and bot work, less useful for logins. For anything involving direct account access, use sticky sessions that hold the same IP throughout the session. Quality providers offer sessions up to 24 hours.
Test the Connection Before Trading
Before using real money, confirm that the proxy is not leaking your real IP and is functioning as expected. A basic IP leak test will show what Binance actually sees when you log in. Several free tools online can display your visible IP and location.
Disable GPS on Mobile
If you are using the Binance app on a mobile device, turn off location services for the app. GPS data reveals your true location, and if it does not match the proxy location, Binance’s system will notice.
Pick a Provider With Clean IPs
Avoid free proxies. Their reputations are almost universally poor and their integrity questionable. Paid providers maintain IP pools and replace flagged addresses on an ongoing basis. Look for providers who are transparent about how they source IPs and who offer some form of IP quality filtering.
Final Thoughts
Proxy servers can be useful for traders dealing with Binance connectivity issues, but they are not a guaranteed solution and they come with real risks. The platform’s detection systems are more sophisticated than most users realise, and a poorly configured setup can create more problems than it solves, from repeated verification prompts to account freezes.
If you go this route, the setup matters more than the proxy itself. Having a proxy is not enough. Match the proxy location to your KYC country, use sticky sessions, and choose a provider with clean IPs for stability.
For most traders, residential proxies are the sensible starting point. They are reasonably reliable, sufficiently anonymous, and priced within reach. Traders in higher-risk regions or those needing additional trust signals may consider mobile proxies. Datacenter proxies are best reserved for tasks that do not involve direct account access.
The Nigerian context in particular calls for caution. Regulatory positions can change quickly, and traders who set up their connectivity today should also be prepared for the possibility that the ground shifts again. Backup plans, cold storage discipline, and awareness of the local legal landscape are as important as any proxy configuration.
By Adedapo Adesanya
Luno Nigeria has received Approval in Principle (AIP) from the Securities and Exchange Commission (SEC) through admission into its Accelerated Regulatory Incubation Programme (ARIP), marking a significant milestone in the country’s evolving digital asset regulatory landscape.
The approval follows an extensive engagement process between the company and the regulator and represents a major step in Luno Nigeria’s regulatory journey. As a result, it becomes the first global cryptocurrency exchange to be admitted.
Nigeria has a sordid regulatory minefield when it comes to digital assets; while it encourages new technologies, it has not fully lifted restrictions placed on crypto transactions via official channels.
Admission into ARIP means the cryptocurrency platform has met the commission’s requirements to participate in the programme and is authorised to operate within its defined scope, subject to ongoing compliance obligations and regulatory conditions, thus limiting full utilisation.
Founded in Africa in 2013, Luno has operated in Nigeria since 2015 and was among the first cryptocurrency exchanges to serve the Nigerian market. It was affected by a blanket ban announced by the Central Bank of Nigeria (CBN). The company said the latest approval reinforces its commitment to operating within Nigeria’s emerging regulatory framework for digital assets.
Commenting on the development, the chief executive of Luno Nigeria, Mr Ayotunde Alabi, described the approval as a landmark achievement for the company.
“This is an important milestone for Luno Nigeria and a strong validation of our commitment to building responsibly in one of Africa’s most important cryptocurrency markets. Admission into ARIP gives us a clearer regulatory pathway, strengthens trust with customers and partners, and provides a stronger foundation for the next phase of our growth, particularly as we expand our focus on institutional and B2B opportunities,” Mr Alabi said.
He expressed appreciation to the regulator for its continued engagement throughout the approval process and commended the Luno team for its resilience and commitment in achieving the milestone.
Luno said the regulatory approval comes at a time when it is expanding its business-to-business operations by engaging banks, fintech companies, payment providers, asset managers and corporate institutions seeking digital asset solutions.
According to the company, increasing regulatory clarity has become a key requirement for institutional adoption of digital assets. It noted that admission into ARIP would strengthen its ability to provide compliant digital asset infrastructure, including stablecoin applications, treasury solutions, crypto-as-a-service offerings and secure access to digital assets.
The Accelerated Regulatory Incubation Programme is the SEC’s regulatory sandbox designed to accelerate the onboarding of digital asset and investment service providers, including Virtual Asset Service Providers and tokenised product platforms.
The initiative enables the commission to assess emerging technologies and business models in a controlled environment while ensuring adequate investor protection and market integrity.
Building on the initial licensing rollout in 2024, Luno’s admission into the second batch of the programme underscores Nigeria’s efforts to establish a structured and transparent regulatory framework for the digital asset ecosystem, while strengthening confidence among investors, institutional partners and other market participants.
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