Federal Govt’s N3bn MSME Waver Sparks 2000% Jump In New Business Registrations

Nigeria’s small business ecosystem is witnessing an unprecedented surge and undergoing one of its most dramatic shifts in recent history, as a N3 billion registration fee waiver has driven daily filings at the Corporate Affairs Commission (CAC) from a few hundred to nearly 10,000 applications, a staggering  2,000 per cent increase that signals a structural shift in the country’s enterprise landscape.

The initiative, executed in partnership with the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), is being rolled out in phases and aims to formalise up to one million micro, small and medium enterprises (MSMEs) nationwide. The first tranche covers 250,000 free business name registrations. Beyond fee relief, the programme represents a deliberate federal strategy to bring Nigeria’s vast informal sector into the formal economy, widen the tax net through growth, and strengthen the country’s productive capacity.

At the heart of this surge is a deliberate policy trade-off: the government is foregoing short-term revenue to achieve wider formalisation, stronger compliance, and sustainable long-term economic growth.

Officials at both CAC and SMEDAN say the true payoff lies in scale, enhanced data visibility, and long-term productivity gains. Registrar-General of CAC, Hussaini Magaji, told LEADERSHIP Weekend that the Commission deliberately sacrificed short-term revenue to secure deeper structural benefits for the nation’s MSME ecosystem.

“This intervention is designed to remove the barriers that keep too many small businesses informal. By waiving business name registration fees for MSMEs, we are helping entrepreneurs take the first step toward growth, legitimacy, and access to finance. It is an investment in the MSME ecosystem, with the Commission foregoing approximately N3 billion in registration fees,’’ Magaji said.

Magaji clarified that the initial 250,000 free registrations represent just the first phase of a broader formalisation effort. Additional batches will roll out sequentially until the one-million target is reached, highlighting that the programme is a sustained, strategic intervention rather than a one-off concession

The response to the waiver has been rapid and unprecedented. According to data obtained by LEADERSHIP Sunday, new registrations have already exceeded 2.5 million businesses, a figure recorded in two months in 2024, underscoring the remarkable pace at which informal enterprises are formalising.

LEADERSHIP Weekend gathered that to handle the surge, CAC has deployed

Artificial Intelligence-powered systems to process applications, while managing around 5,000 daily inquiries via email, call centres, and digital platforms

Nigeria’s business revolution, Magaji said, is unfolding not in factory clusters or trading hubs, but within digital portals. The sheer volume and complexity of applications have rendered manual and semi-manual processes obsolete.

“The adoption of artificial intelligence is no longer optional,” he said. “Processing 10,000 registrations daily would be impossible without AI-enabled systems. Manual processes would have collapsed under this volume. AI is essential.”

Officials said digitisation has streamlined the process, cut turnaround times, and boosted confidence, critical factors for first-time entrepreneurs and micro or nano enterprises.

The current surge in registrations is moving along two complementary tracks. One is market-driven, with entrepreneurs voluntarily formalising to meet tax requirements, access banking services, and participate fully in the economy. The other is policy-driven, led by the CAC–SMEDAN free registration programme, which removes cost barriers for MSMEs nationwide.

Crucially, officials stressed that the daily average of 10,000 registrations is not limited to beneficiaries of the free scheme alone, but reflects a broader response to tax reforms, digitisation and growing awareness of the benefits of formality.

SMEDAN told LEADERSHIP Sunday that roughly 60,000 MSMEs have already benefited from the free-registration programme, with participants represented across all 36 states and the Federal Capital Territory (FCT).

For SMEDAN, the story of business registration is no longer just about regulatory compliance; it is now a pathway to real economic opportunity.

The director-general, Charles Odii, said registration has become a gateway for entrepreneurs to access grants, training, financing, and other tangible support.

“Formalisation is the gateway to support,” Odii said. “Once businesses are registered and onboarded into our database, they can access after-care grants, training, market opportunities and financing. Registration is the foundation for sustainable MSME growth.”

He explained that the initiative is designed to correct the structural weakness created by Nigeria’s large informal sector, which has historically excluded millions of businesses from government support and formal financial services.

Odii also clarified that the 250,000 free business name registrations represent only the first phase of the programme.

According to him, once the initial batch is exhausted, another will follow immediately, with the process continuing in phases until the one-million MSME registration target is fully attained.

Odii added that MSMEs already captured in SMEDAN’s database but lacking CAC registration would automatically qualify for the free-registration initiative, eliminating bureaucratic bottlenecks.

He noted that entrepreneurs unfamiliar with digital platforms are not excluded, as physical onboarding support is available through SMEDAN state offices and business clinics nationwide. Where businesses encounter challenges uploading mandatory documents such as National Identification Numbers (NINs), the agency provides hands-on assistance to ensure no eligible enterprise is left behind.

From the regulator’s side, officials at the CAC told LEADERSHIP Sunday that platform harmonisation between CAC and SMEDAN has significantly reduced processing time and friction for first-time registrants, particularly nano and micro enterprises. They added that the phased rollout structure allows successive batches to be deployed efficiently until the one-million target is met.

Policy and financial inclusion experts said the surge in registered MSMEs is already improving data visibility and enterprise profiling, making it easier for banks, fintechs and development finance institutions to design products for businesses previously invisible to the formal system.

Abuja-based public policy analyst Okon Joshua described the waiver as a targeted intervention against a major structural friction.

According to him, the removal of registration fees addresses a long-standing barrier that kept large segments of economic activity outside formal systems, noting that formalisation enhances enterprise visibility within regulatory, financial and investment frameworks.

Joshua said once firms are formally recognised, they become legible to policymakers and financiers, enabling more accurate policy design, improved capital allocation and stronger institutional linkages.

From a development perspective, MSME specialist Dr Fredrick Ijere told LEADERSHIP Sunday on the sidelines of the SMEs products exhibition in Abuja that the programme strengthens evidence-based policymaking by improving the quality and coverage of enterprise-level data.

He explained that accurate profiling allows public interventions to shift from broad, inefficient support mechanisms to targeted instruments such as grants, skills development and tailored financing, helping small firms move from subsistence operations to scalable business models.

In the financial sector, financial inclusion expert Douglas Michael said formal registration remains foundational for credit intermediation across banking and fintech ecosystems.

He said verifiable business identities are central to risk assessment and loan structuring, noting that formalisation reduces information asymmetries and lowers the cost of lending to small enterprises.

SMEs instructor, Dr Davies Okpara, said the surge in registrations illustrates how well-designed reforms can translate into tangible outcomes.

“This is how reform becomes real. Policy, technology and incentives are converging to bring millions of businesses into the formal economy,” he said, adding that the alignment strengthens the ecosystem for financing, compliance and sustainable business growth.

Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has consistently framed the reforms as pro-growth rather than punitive.

“The reforms are not about squeezing small businesses,” Oyedele told MSMEs during a recent SMEDAN MSME Town Hall meeting in Abuja.

“They are about creating a fair system where entrepreneurs can grow, enjoy incentives, and participate fully in the economy without being overwhelmed by taxes,” Oyedele had said.

The Town Hall provided a platform for entrepreneurs to raise concerns, ask questions and gain clarity, helping to dismantle long-standing fears around registration and taxation.

For entrepreneurs, the impact is already tangible. Fiyelumo Oboro, a 37-year-old businessman from Bayelsa, said registration transformed his prospects.

“Banks wouldn’t touch my business because it wasn’t formal,” he said. “Now, I have a registered name, a bank account, and even a website. I am meeting new customers,” Oboro said.

In Abuja, salon owner Mary Obi reflected on her transition into the formal economy.

“I used to think running a small business meant staying invisible. Now, I feel part of something bigger—a national economy that actually works for people like me,” she said.

With ₦3 billion invested, AI-enabled processing, SMEDAN-led sensitisation and a phased rollout targeting one million free business name registrations, Nigeria’s MSME revolution is unfolding one registration at a time—signalling a structural shift in the country’s economic trajectory.

Analysts expect MSME registrations to remain elevated as awareness deepens and incentives persist, reinforcing the federal government’s strategy of expanding the tax base through growth rather than coercion.