This article is a section from a report “Investing in Nigeria” and shall be viewed in the context of the title. Please view the report for more information on the subject as well as references for this article.
The Nigerian business terrain is quite unstructured, laws are not followed, nothing works and people don’t follow through to their duties. For instance, the UK’s structure cannot be compared to the Nigerian structure. Everyone follows specific structures and rules in the UK, Nigeria is the complete opposite – people bend the law to what they want.
Nigerian entrepreneurs are very much oriented towards getting things done, there is no time for bureaucracy or much structuring. This can be argued to be a norm in a quickly expanding and growing frontier economy. It might not appear this way from the outside, but things are being done efficiently and productively in Nigeria.
There are magnificent business culture differences between Nigeria and Europe or the US, but there is a code of business in Nigeria, it’s just that it’s very different from that of the developed world. Nigerian entrepreneurs are not used to structured corporate culture, in their view it holds them back from getting things done. The market is very dynamic, you are required to make decisions quickly and there simply is no room for back and forth paper handling or other bureaucracy. Being able to make decisions quickly is considered a priority.
The business culture varies between regions and same products might have different market approaches across the regions and states.
In small outsourcing operations for exports to other continents, it can be a challenge to explain to the employees that the quality that might be accepted in Africa won’t be accepted in the UK, for instance. It’s also not uncommon for employees to work in multiple jobs, especially the employees of small operations. This increase production times.
Nigerians are very much peoples persons, they sell and buy from friends. A relationship with the locals, in terms of goodwill with the masses and having connections with the local business people, is effectively an entry barrier to doing business in Nigeria. The contacts you have in Nigeria have a huge impact on your business.
Business in Nigeria can be very tough. People that try to enter the market without understanding the operational culture, are likely to be ruined before they even start. A working operational model however, will get one over all the obstacles one might face in Nigeria.
It’s very important to have a partnership before venturing into the Nigerian environment. A partner who knows the law such as land ownership, someone who understands the ethnic, religious and social niceties, is necessary to operate in Nigeria. A successful foreigner business is unthinkable without people on the ground that know the given market and sector, even before the business is launched.
Nigerians are very driven, it’s the first time in history they can see success as achievable and replicable. Some of them have seen the good life abroad and will work very hard to achieve the same lifestyle and living standards for themselves and their family in Nigeria. At all levels of the business world people are hungry for success and will push further at all times.
The new generation of entrepreneurs, who are well educated, see the benefits of structure and are creating structured companies that are appealing to equity investors and the capital markets. The landscape is changing and as most things in Nigeria – the current business culture is a phase the country is going through.