For many years, financial trouble was treated almost like a death sentence in Nigerian business.
Once a company started struggling with debt, founders feared the shame, boards delayed difficult decisions and creditors often waited until the business had little room left to recover.
But Nigeria’s Companies and Allied Matters Act (CAMA) 2020 provides companies with more options for dealing with financial distress before liquidation becomes the only choice.
The message is simple: a company in distress is not always a dead company.
The Corporate Affairs Commission says Nigeria’s Insolvency Regulations 2022 regulate several insolvency processes under CAMA 2020, including Company Voluntary Arrangements (CVAs), administration, receivership and winding-up.
A CVA allows a company to reach an agreement with creditors on how its debts will be handled. Administration can give a struggling company time and protection to reorganise its affairs rather than immediately shutting down.
CAMA also provides for arrangements and compromises with creditors and members.
These tools matter because delaying action can turn a manageable debt problem into a liquidation crisis.
The recent Dantata & Sawoe case is a clear example.
Premium Times reported that the Federal High Court in Abuja appointed a liquidator for Dantata & Sawoe Construction Company on December 3, 2025, over a $1.4 million obligation linked to a settlement with Zutari Consulting Nigeria.
But the company subsequently paid the debt.
On December 11, Premium Times reported that the court struck out the winding-up case after the settlement was confirmed and the earlier liquidation orders were discharged.
The lesson is clear: creditor pressure can force a company to confront a problem quickly. But businesses are better off engaging creditors before the dispute reaches that stage.
The naira crisis has also exposed the risks of foreign-currency debt.
BusinessDay reported in February 2025 that PZ Cussons Nigeria planned to convert a $34.26 million intercompany loan into equity to strengthen its financial position.
However, the proposal was rejected by shareholders at the company’s March 13, 2025 extraordinary general meeting, according to BusinessDay’s report citing Nigerian Exchange information.
The episode shows that restructuring is not always simple. A company may identify a solution, but getting shareholders and other stakeholders to approve it can be another challenge.
AMCON provides another lesson.
According to AMCON, the corporation was established in 2010 to resolve banks’ non-performing loan assets and can dispose of managed assets while seeking to preserve their long-term economic value.
That means financial distress does not automatically make a business or its assets worthless.
The real question for investors is whether the underlying business can recover.
Financial distress will remain part of doing business in Nigeria. High interest rates, currency movements, rising costs and weak consumer demand can put pressure on otherwise viable companies.
The smart response is not to pretend financial trouble will never happen.
It is to act early.
Restructuring is not necessarily a sign that a business has failed. Sometimes, it is the step that gives a good business another chance to survive.
