African SMEs Risk Collapse Without Clear Structures, Nsikan Ubi Warns as Investors Scrutinize Execution
Updated
Updated · Punch Newspapers · May 29
African SMEs Risk Collapse Without Clear Structures, Nsikan Ubi Warns as Investors Scrutinize Execution
1 articles · Updated · Punch Newspapers · May 29
Summary
African SMEs can lose stability and even collapse as they scale if they expand before building clear operational structures, Nsikan Ubi said, arguing that growth often exposes weaknesses hidden in early-stage businesses.
Informal processes that work in small teams begin to fail as complexity rises, she said, leaving firms with unclear roles, fragmented communication, duplicated responsibilities and inconsistent delivery.
Rising demand or regional expansion can worsen those gaps rather than fix them, with execution—not strategy—becoming the main point of breakdown for scaling businesses.
Investors are increasingly testing operational readiness alongside revenue growth, Ubi said, while businesses that scale successfully usually set ownership structures, standardized workflows and accountability systems before expanding.
In Nigeria, where SMEs make up a large share of jobs and economic activity, weak execution structures could undermine broader economic resilience if left unaddressed.
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Overview
African SMEs are at risk of collapse because they often focus on rapid expansion instead of building strong operational structures. This unchecked growth can actually speed up their failure, as weak foundations make it hard to survive challenges. In Nigeria, where SMEs are the backbone of the economy and major contributors to jobs and GDP, this problem is especially serious. Recent declines in the number of businesses and formation rates highlight a tough economic climate. While many SMEs use digital tools to boost productivity, without solid internal systems, their long-term success and impact on the economy remain uncertain.