In the year 2018, Nigeria was 146 on the World Bank’s Ease of Doing Business Report. Even though that was not an envious position, it didn’t deduct anything from the fact that Nigeria was and still is one of the economies in Africa with potentials so huge that its prospects are nothing less than mouthwatering. Running a business in Nigeria is not an easy endeavor as it comes with its own risks. There are a couple of factors that make things hard for entrepreneurs and business owners.
There is the perennial issue of inadequate power supply. The energy to power businesses is grossly inadequate. There have been unfortunate incidents of the national grid collapsing. Given the fact that power is part and parcel of the lifeblood of business activities, this situation only makes things harder. As it stands now most Nigerian businessmen and women use generators to make-up for inadequate power supply. That has a direct effect on the cost of energy or power.
There is also the issue of corruption. A lot of regulatory bodies have men and women of questionable character. They demand bribes and tips in order to do what is their constitutional duty. We have situations where there is duplication of functions among the regulatory bodies. That means one customer gets to “settle” different law enforcement agencies over the same issue.
Similarly, startup capital is the lifeblood of any business at its beginning. It is a very serious challenge for intending entrepreneurs in Nigeria. Most people have to take business loans from banks at unfriendly interest rates or rely on personal savings etc. There are programs and initiatives of government aimed at encouraging financial institutions to make capital available for intending entrepreneurs but the rate of implementation is poor. Hence capital remains a very big hurdle to cross in doing business in Nigeria.
On another note, there is the issue of keeping up with technological trends and evolution. Every field of endeavor is constantly experiencing massive changes on a regular basis. This has rendered a lot of methods and things obsolete. As a result people and businesses have been rendered irrelevant for not being in tune with what is in vogue. There is that unpredictability as to what direction the world economy is actually taking. A lot of big companies try to mitigate this by propping up startups. These startups are meant to keep abreast of the happenings, trends, and innovations so that they are left out and obsolete.
Furthermore, the ease of doing business in Nigeria is hampered by government policies or lack of it. Sometimes it is caused by bad policies or absence of good policies or failure to properly implement the good policies we already have. The business environment is highly regulated: The companies and Allied matters act (CAMA) is the law that guides the business environment. For example, Cross border trading was one of the areas that Nigeria was asked to improve in the last report. In response to that, the presidential enabling businesses environment council (PEBEC) gave directives that the ports be open 24 hours and that the procedure for clearing should be less cumbersome. This is yielding some positive result already.
If you intend to do business in Nigeria, you should have it at the back of your mind that you will most likely come against one or more of the hurdles discussed in this write-up. They might be difficult but they are not insurmountable.