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Meta’s exit may devastate 20m MSMEs — IT firms

News Express |9th May 2025 | 588
Meta’s exit may devastate 20m MSMEs — IT firms

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Meta Platforms’ threat to halt Facebook and Instagram operations in Nigeria could devastate 56 per cent of the nation’s 39.6 million micro, small, and medium enterprises, industry players in the information technology space have explained.

They further noted that such an exit would erode tax revenues and force businesses to seek costly alternatives, as a $290m fine dispute with regulators intensifies.

While the implications of the potential exit are acknowledged, analysts say the tech giant is no stranger to regulatory clashes. Its track record includes major data breaches and privacy scandals in recent years.

In the European Union, Meta has faced several hefty penalties, including a record €1.2bn GDPR fine in 2023 for unlawful data transfers. In 2025, the company was also fined €200m under the Digital Markets Act for its “consent or pay” model, with the European Commission ordering compliance within 60 days or face further sanctions.

In Nigeria, however, Meta has yet to pay over $290m in fines imposed by three regulatory agencies for various violations. Nigerian courts have ordered the company to settle the fines by the end of June 2025.

The firm challenged the penalties in court, but its appeals were unsuccessful. In response, the company threatened to withdraw Facebook and Instagram from the Nigerian market if compelled to pay.

According to the Global System for Mobile Communications Association, Nigerian MSMEs rely heavily on Facebook and Instagram for sales, customer engagement, and brand visibility.

“Businesses that built their brands on Meta’s platforms would face immediate challenges,” Digital Marketing Consultant at EssenceMediacom, Olayinka Shobola, told The PUNCH.

The platforms have become essential tools for business survival and growth in Africa’s largest economy, where SMEs contribute nearly 50 per cent to GDP and represent more than 96 per cent of registered businesses.

“Most likely affected businesses will pivot to platforms like X or TikTok for short-term survival, but long-term, they’ll need to invest in standalone e-commerce or offline channels,” Shobola said. “Jobs will take a hit; marketers, influencers, and agencies will lose contracts overnight.”

Meta’s platforms also support thousands of jobs across digital marketing, creative industries, and tech support services, directly employing dozens of Nigerians and indirectly sustaining a wider ecosystem of small businesses.

A shutdown would deal a serious blow to Nigeria’s digital economy. Statista forecasts a $148.2m social media ad market in 2025, with Facebook commanding up to $120m, driven by 38 million ad-reachable users.

“My shop practically lives on these platforms, especially Instagram,” Lagos-based baker Fatima Tunde said. “If it’s gone, I’m out of business.”

The PUNCH reported that in the first nine months of 2024, foreign digital service providers, including Meta, Google, and Netflix, paid a combined N3.85tn in Company Income Tax and Value Added Tax to Nigeria’s federal purse. While Meta’s individual contribution wasn’t disclosed, it is among the most tax-compliant digital platforms operating in the country.

Last week, the Federal Competition and Consumer Protection Commission branded Meta’s threat a “pressure tactic,” noting the company faced heftier fines elsewhere: $1.5bn in Texas and $1.3bn in the EU without exiting. “Meta must comply,” said the consumer watchdog.

The Co-founder and Co-CEO of XchangeBox, Abiola Jimoh, acknowledged the impact of its exit on millions of Nigerians on the platform but criticised Meta’s stance.

“Threatening to exit sends the wrong signal. Fines should be a chance to improve, not a reason to abandon a market,” he told The PUNCH.

Nigeria’s 164.3 million internet subscriptions and vibrant youth engagement make it a goldmine. “If Meta sees no value here, are they admitting we’re not profitable for them? A serious business wouldn’t walk away from such a market.”

Executive Director of Techsocietal, Temitope Ogundipe, criticised both Meta and Nigerian regulators, saying the dispute threatens small businesses, activists, and vulnerable communities reliant on the platforms.

“Entrepreneurs, community organisers, families, and at-risk groups rely on these platforms as vital lifelines,” the group said in a note. “Digital access is not a luxury but a right tied to livelihoods and voice,” Ogundipe said. (The PUNCH)




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