Nigeria recorded more than 1,400 winding-up applications in 2025, compared with only 13 administration proceedings approved by the Corporate Affairs Commission (CAC).
This development highlights the limited uptake of corporate rescue mechanisms introduced under the Companies and Allied Matters Act (CAMA) 2020.
The figures have prompted the CAC and Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) to push greater use of debt restructuring and other rescue mechanisms to keep viable distressed companies operating rather than allowing them to collapse into liquidation.
Speaking at BRIPAN’s annual international conference, themed, ‘Building an Insolvency Architecture for a New World Order’, the CAC said Nigeria’s insolvency framework had moved from a predominantly liquidation-centred system towards rescue and recovery, but stakeholders needed to make the new mechanisms work in practice.
‘What we see still is more of the winding up and the liquidation,’ said Hussaini Magaji, Registrar-General of the CAC, during a panel session, adding that the insolvency practice was ‘still evolving’ and ‘still picking up’.
CAMA 2020 introduced Company Voluntary Arrangements (CVAs) and administration, allowing distressed but viable companies to restructure their obligations and continue trading.
In his keynote address, Hussaini Magaji, Registrar-General of the CAC, said modern insolvency systems should do more than liquidate failed companies.
‘It must facilitate early intervention, preserve viable businesses, protect employment, maximise returns to creditors and provide an orderly exit where rescue is no longer practicable,’ he said.
Under administration, the primary objective is to rescue a company or its undertaking as a going concern. Where this is not reasonably practicable, the administrator is expected to pursue a better result for creditors than immediate winding-up or realise assets for secured or preferential creditors.
The CAC said more than 400 insolvency practitioners had been accredited under the Insolvency Regulations 2022, while CVAs and administration proceedings had been registered across sectors including banking, insurance, pensions and healthcare.
Albert Folorunsho, President of BRIPAN, said the role of insolvency practitioners should extend beyond managing failed businesses to helping distressed enterprises recover and return to sustainable operations.
Six years after CAMA 2020 introduced its insolvency and business rescue provisions, Folorunsho said practitioners had accumulated practical experience that should guide the next stage of Nigeria’s insolvency framework.
He said the BRIPAN conference provided an opportunity to identify gaps in the existing system and develop practical solutions that could inform policy and strengthen institutions.
Folorunsho said corporate distress had consequences beyond a company’s balance sheet, affecting entrepreneurs, employees, creditors and the wider economy.
He said preserving viable businesses could protect workers’ livelihoods, improve prospects for creditors to recover their funds and retain productive enterprises within the economy.
Abiodun Ariyibi, Vice President of BRIPAN, said the association was also focused on emerging insolvency trends and reforms that could strengthen restructuring practice in Nigeria and beyond.
He said modern insolvency systems needed to be resilient, transparent and responsive to economic uncertainty, technological changes and evolving regulation, while also addressing cross-border commercial activity and protecting enterprise value.