Businesses in Nigeria are quietly being strangled under the weight of strict regulation and steep compliance costs, which are increasingly squeezing avenues for investment and growth.
The toll is especially heavy on small and medium-sized enterprises, which spend more time on permits and levies than on expansion.
Leye Kupoluyi, president of the Lagos Chamber of Commerce and Industry, said manufacturers continue to face excessive regulatory burdens arising from multiple registrations.
“This duplication increases compliance costs, delays market entry, and constrains business expansion,” he said Wednesday at an address on the State of the Economy.
A recent MAN study found that manufacturers pay over 60 different taxes and levies, making local production increasingly expensive and less competitive.
Oluchi Odimuko, assistant director of sectoral and regulatory affairs at the Manufacturers Association of Nigeria (MAN), at the 2026 BusinessDay’s Manufacturing event, explained that manufacturers are often forced to pay for multiple compliance systems, including duplicate tax stamp requirements imposed by different agencies pursuing similar objectives.
The new tax reforms promised some relief, cutting down taxation by over 90 percent to nine, Odimuko said. However, since its implementation in January, it has largely underdelivered as states have stalled in enforcement, she added.
Yvonne Afolabi, an economist and principal consultant at Techpoint Finance Consults, stressed that excessive regulation increases the cost and complexity of doing business, forcing companies to spend more on compliance than on investment, innovation, or expansion.
“As businesses grow more slowly, they create fewer jobs, earn lower profits, and attract less investment. This reduces the overall tax base, leading to lower government revenue from taxes such as Company Income Tax, VAT and PAYE, despite higher regulatory requirements.” Afolabi explained.
However, the government is now moving to simplify the rulebook and cut red tape to lower the cost of doing business and ease pressure on the private sector.
Taiwo Oyedele, minister of finance and coordinating minister of the economy, recently highlighted the need to reduce regulatory barriers, saying reforms must go beyond taxation to create an environment where businesses can invest, expand and create jobs.
Speaking at the 14th BusinessDay CEO Forum held in Lagos recently, Oyedele said the government’s revenue mobilisation strategy was not about increasing tax rates but improving compliance, simplifying processes and reducing the cost of doing business.
“Our revenue mobilisation agenda is not about raising tax rates to punish success. It’s about widening the tax net, simplifying compliance and leveraging technology.”
He added that Nigeria’s tax reforms were designed to address concerns around multiple taxation and high compliance costs.
“Our landmark tax reforms are designed to eliminate multiple taxation and drastically reduce compliance costs.”
The importance of improving business efficiency is reflected in the size of Nigeria’s corporate tax base. Value Added Tax (VAT) collections rose from N2.5 trillion in 2022 to N8.6 trillion in 2025, according to Intelpoint data, while Company Income Tax (CIT) collections reached N9.21 trillion in 2025.
Manufacturers have repeatedly raised concerns about overlapping regulations, arguing that multiple agencies supervising the same businesses increase production costs and create uncertainty for investors.
The Manufacturers Association of Nigeria (MAN) has previously highlighted the impact of multiple regulators on factories, including duplicated inspections and conflicting directives.
Oyedele said the government was working to simplify the regulatory environment and remove bureaucratic obstacles affecting businesses.
“We are actively working to simplify our regulatory environment… and remove the bureaucratic bottlenecks that eat up your time and consume your resources.”
Analysts say the success of these reforms will depend on whether businesses experience measurable improvements through faster approvals, clearer regulations and lower compliance costs.
For companies operating in Nigeria, the key question is whether regulatory reform will translate into a more predictable business environment that supports investment, productivity and growth.
