VOX POP

CHALLENGES OF DOING BUSINESS IN NIGERIA

Do you intend starting a business in Nigeria? Do you want to know the risk factors or challenges of doing business in Nigeria? Nigeria is a country blessed with human, mineral and natural resources. When it comes to starting a business in Nigeria; the potentials are so great that any investor or entrepreneur will be tempted to jump in with both feet without first testing the waters. We asked a cross section of Nigerians the challenges of doing business in Nigeria. Enjoy their views.

The basic evidence is lack of government support to the plight of entrepreneurs and small business owners. And the result of these insensitivity surfaces in the form of double taxation, corruption, unnecessary levies and duties, bureaucratic bottlenecks at various government agencies like CAC, NAFDAC, etc; and high cost of obtaining business licenses. But Nigeria operates as a free economy; which favours capitalists, so I don’t think someone really interested in succeeding in business in Nigeria will be discouraged by this challenge. A good strategy to balance the excesses of the government is to have a strong business team that will strategically position your business to withstand the ever increasing demand of the government.

The federal government, especially the Goodluck Jonathan administration has made some good strategic moves to support both small and medium scale enterprises. Take for instance the YouWin programme designed to help entrepreneurs jumpstart or expand their businesses, the recent 2013 tariff increase for the importation of used cars; so as to encourage the indigenous manufacturers like Innoson (IVM) and also attract foreign car manufacturers like Toyota, Nissan, etc. I highlighted these challenges not to discourage anyone; but to help you prepare in advance because he who is prepared has half won the battle. But government of this country still has a lot to do in supporting small and medium scale entrepreneurs.

- Julius Umoh

Transportation challenges are what are affecting most business people in this country. The poor transportation standard, as expected; the dependable source of raw materials you need may not be situated close to your target market. So you will have to decide if to locate your business close to the raw materials or close to your market. Either way; transportation of either raw materials or finished goods will be involved and this will pose a great challenge if you intend operating in Nigeria effectively as we are finding it pretty difficult daily.

Poor transportation standard and road network is a factor militating against the growth of businesses in Nigeria but I believe this challenge is being tackled by the government through the upgrading of roads and construction of railway lines, especially here in Lagos, the administration of Gov. Raji Fashola is trying, but we still need more.

- Ugochukwu Kalu

Nigeria lacks the basic infrastructure and logistics to support entrepreneurship. If you are going to run a successful business in Nigeria; then you must have the financial muscle to provide your own infrastructure.

Take for instance you want to start a manufacturing firm in Nigeria; you will need to build your own factory, provide your own water supply and other amenities that smoothens business operations. This single factor lengthens the time frame from initial planning to full business operations when compared to developed countries that have the basic infrastructure in place. Infrastructural challenge will directly or indirectly increase your startup overhead cost so you have to properly factor in this challenge in your business plan.

- Bukola Oyeleke

Poor power supply is a big challenge militating against the successful growth of small business startups in Nigeria. Successful companies operating in Nigeria has found a way to deal with the challenge of power supply by providing their own power. For instance, Aliko Dangote; the founder of Dangote Group has developed the strategy of situating a mini power plant right next to his factories as an alternative to the erratic power supply in the company. So if you are successfully going to operate in Nigeria; then you must map out a plan to curtail the harsh effect of poor power supply. But people like us that have not got to that level, it is ‘I better pass my neighbour’ generator we are using and spending a lot of fuelling the generator. Although, the federal government of Nigeria has been making giant strides to address the power challenges the country is facing. As at 1st of October 2013; the power sector has been deregulated and the licenses given to private investors to run their own independent power stations. We just hope this will come to reality.

- Eniola Folarin

Of all the business challenges involved with starting a small business in Nigeria; inability to access funds and banks’ unwillingness to support entrepreneurship and small business is the major barrier to massive entrepreneurship growth in Nigeria.

However, this challenge can be surmounted if you are a die hard, creative entrepreneur. Hard core entrepreneurs are not held back by the lack of support from banks; they are not discouraged by the unavailability of startup capital. Rather than lament over the predicament, we look for creative ways to finance our business plans and ideas. So if you are in this category of entrepreneurs; then I want to believe that your plans of doing business in Nigeria will not be thwarted or held back by the challenge of capital, but we want things to be done to make things easier.

 - Amara Nwogo