President Bola Tinubu has approved the free registration of 250,000 nano, micro, and small enterprises with the Corporate Affairs Commission, in a move designed to remove one of the most persistent barriers keeping Nigerian businesses locked in the informal economy.
The announcement was made during the 8th National MSME Awards 2026 held at the State House in Abuja, with the Federal Government covering all statutory CAC registration fees for eligible applicants through a partnership between SMEDAN and the CAC.
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What the programme offers
Under the scheme, qualified businesses will receive business name registration through the CAC entirely free of charge, with the government absorbing fees that would normally cost each applicant approximately N11,000. Eligible businesses are those that are currently unregistered, operate as sole proprietorships or partnerships — not limited liability companies — and are nano, micro, or small enterprises with fewer than 50 employees.
Beyond the fee waiver, the programme includes technical training and business development support designed to improve the long-term survival and growth of registered enterprises. The CAC and SMEDAN signed a Memorandum of Understanding in September 2025 to formalise the initiative, with the CAC foregoing approximately N3 billion in registration fees across the 250,000 slots.
SMEDAN Director-General Charles Odii described formalisation as the gateway to support, noting that registered businesses gain access to grants, training, new markets, and continuous aftercare that informal enterprises are structurally excluded from. MSMEs already in SMEDAN’s database without a CAC registration automatically qualify for the initiative.
250,000 slots is a meaningful start, but it represents a fraction of the estimated 40 million MSMEs operating in Nigeria, the vast majority of which remain unregistered. The measure’s real value lies in whether it establishes a sustainable model for ongoing formalisation rather than a one-off exercise.
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Why formalisation matters for small businesses
Businesses operating without CAC registration cannot open dedicated business bank accounts, access government intervention programmes, participate in formal procurement, or apply for development finance loans and grants. They are invisible to lenders, investors, and regulators — a structural invisibility that keeps them permanently at the margins of the support systems designed to help them grow.
The Nigeria Tax Act 2025, which took effect on 1 January 2026, also raised the company income tax exemption threshold to N100 million in annual turnover, meaning that newly registered small businesses face a significantly reduced compliance burden than in previous years. This combination — free registration and reduced tax obligations — improves the commercial case for formalisation more than any previous intervention has.
Formalisation is not an end in itself. It is the mechanism through which a business becomes legible to the systems that can help it grow. Every business that moves from informal to registered gains access to a different set of possibilities — and that is what this programme is ultimately building toward.
Interested business owners can apply through the official SMEDAN portal at portal.smedan.gov.ng. Physical onboarding assistance is available through SMEDAN State Offices and Business Clinics for entrepreneurs less familiar with digital platforms.
