The Multi-Billion Naira Tax Trap Strangling Nigerian Businesses From Within

• Ex-NACCIMA boss Dele Oye warns that government agency proliferation is crippling business growth and stalling investment.

• Over 900 federal MDAs are actively competing to inspect, fine, and license local products under overlapping mandates.

• Revenue agencies extracted N658 billion in just six months as their personal “cost of collection.”

• Uncoordinated regulatory enforcement forces manufacturers to pass compliance costs directly down to everyday shoppers.

July 20, () — Doing business in Nigeria today feels like running a gauntlet where every government agency is waiting with a cash register.

Small business owners, factory managers, and traders are no longer just fighting high inflation and foreign exchange volatility.

They are fighting an army of over 900 Ministries, Departments, and Agencies (MDAs) that treat private businesses as primary revenue targets.

The former President of NACCIMA and current Chairman of the Alliance for Economic Research and Ethics (AERE), Dele Oye, has raised the alarm on this growing structural crisis.

He revealed that Nigeria loses over N862 billion every single year simply because the government refuses to merge overlapping agencies and implement the long-overdue Oronsaye Report.

Instead of shrinking the bureaucracy, government officials keep creating new departments to reward political allies.

When Multiple Regulators Fight Over the Same Factory Floor

The biggest headache for local producers is not meeting quality standards, it is paying four or five different government bodies for the exact same check.

A single food processor or pure water producer must obtain approvals from NAFDAC for product safety, SON for manufacturing standards, and FCCPC for consumer rights.

On top of that, state environmental teams and local council task forces show up unannounced to demand their own local levies.

A recent example unfolded in Awada, Onitsha, where the FCCPC sealed three milk factories over compliance issues.

While regulatory enforcement is important, manufacturers point out that they are already paying NAFDAC and SON for the exact same oversight.

When regulators overlap, compliance turns into an endless loop of registration fees, inspection logistics, and sudden shutdown threats that bring factory lines to a complete standstill.

“The ancient wisdom captured in the proverb, ‘Too many cooks spoil the broth,’ has never been more apt. When three different federal agencies have the statutory power to seal a single factory, we are no longer talking about regulation, we are talking about administrative paralysis,” Dele Oye, Chairman, Alliance for Economic Research and Ethics (AERE) stated.

Revenue Extraction Is Driving Up the Price of Everything

The real danger in this system is how these agencies are funded.

Many government bodies are allowed to keep between 4% and 7% of all the money, fines, and levies they collect as their official “cost of collection.”

In the first six months of 2025 alone, revenue agencies deducted a staggering N658 billion under this arrangement. This setup incentivizes agencies to issue fines and demand new permits simply to cover their internal budgets.

Businesses do not absorb these extra charges out of their own pockets.

Every naira spent on redundant factory inspections, duplicate certificates, and local council permits gets tacked onto the final price tag of consumer goods.

When a carton of milk or a bag of sachet water gets more expensive at the corner shop, it is often because the producer had to pay off three different regulatory teams just to keep the doors open.

Until the Federal Government steps in to trim these 900 MDAs down to a lean, efficient system, everyday Nigerians will continue to pay the price at the market counter.