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5 Major Challenges you will Face while Doing Business In Nigeria

Nigeria is one of the international’s leading commercial enterprise places on the African continent. But in relation to doing enterprise in Nigeria, there are numerous demanding situations to confront a standard Nigerian business. In 2016, out of 189 countries, Nigeria changed into ranked 169th within the World Bank’s Ease of Doing Business Report.

80% of recent companies and startups in Nigeria fail in the first 3 years. Doing enterprise in Nigeria could be a first-rate experience whilst your commercial enterprise challenge succeeds, but earlier than achievement there may be excellent challenges and difficulties that a new commercial enterprise or startup has to segment.

Starting up a commercial enterprise task usually comes with its own business chance which can abate the increase of such business but some problems and demanding situations are very not unusual to all corporations in Nigeria. In this article, we highlighted the top five demanding situations of doing business in Nigeria and the way to triumph over such demanding situations in other to make sure they don’t kill your enterprise.

1. Access to capital & credit.

One of the maximum difficult duties, for any entrepreneur that wants to start up their very own small commercial enterprise, is to raise capital for it. Simply placed, capital is the amount of money the enterprise has to be had to spend on diverse business activities. Except you’re one of the wealthy children within the block, raising capital is by no means a smooth assignment and often requires a whole lot of determination and patience.

Lack of financial capital is the unmarried most significant task when it comes to doing commercial enterprise in Nigeria. Even with the concept and implementation of financial programs intended to assist agencies, the government has always been in a struggling position to make certain that economic capital is easily made reachable to marketers. In most instances, marketers have to turn to non-public financial savings, enterprise loans, families and friends, or government presents to get monetary capital for the enterprise.

2. Electricity / Power Supply.

Getting get right of entry to consistent energy and an electricity supply is a major issue for enterprises in Nigeria. As of June 2018, an average household in Nigeria can only have to get admission to 6 hours uninterrupted strength supply out of the 24 hours that exist in a given day. This is why the usage of mills as an opportunity energy supply is so commonplace in Nigeria.

Nine of 10 homes in Lagos State on my own has at least one power generator as an opportunity source of power. Over the past long time, successive governments have unsuccessfully endeavored to address Nigeria’s electricity deficit problem. The cutting-edge Minister of Power, Works and Housing, Mr. Raji Fashola, has blamed inadequate electricity delivery to customers on the loss of sufficient monetary investments in the strength sector.

3. Government guidelines.

The authorities play a first-rate position in the selection of how commercial enterprise gets performed in Nigeria. No government or financial machine leaves all decisions approximately doing business to the marketplace. These regulations are intended to maintain corporations in-take a look at and make sure that comply with a commonplace rule. The regulation that guides doing commercial enterprise is referred to as Companies & Allied Matters Act (CAMA).

African nations rank low on the World Bank’s ‘Doing Business’ rankings. This is primarily because of the difficulty concerned with setting up an enterprise. In Nigeria, it could take between 2 weeks and 1 month to set-up an enterprise that constantly entails leaping through a number of regulatory hoops. The government is turning into extra supportive of neighborhood start-up ecosystems, but commonly, the Nigerian authorities need to do extra to make doing enterprise simpler and greater exciting.

4. Corruption & Bribery.

While Nigeria is most of the world’s leading funding destinations and is formally a properly-functioning enterprise surrounding, corruption and bribery are still critical obstacles. The federal shape of the political system method there is a huge variety of regulatory companies, that can lead to demands for bribes from public officials.

5. Market trends.

The predominant thing we're speakme approximately here is disruption, which includes virtual or technological disruption. It is something that is affecting companies of all industries in Nigeria. There is also a marketplace threat across the truth that there's global uncertainty around the financial boom. When you are unsure of the path that the entire financial system is going to take, it makes commercial enterprise planning and strategy improvement a splendid deal greater hard and risky.

In a bid to put together for these dangers, many company agencies (such as banks) at the moment are helping start-ups, in order that they may be a part of the disruption, or are developing smaller, greater agile and very independent components in their own employer to appearance to the destiny and be conscious of latest trends within the marketplace which can affect how an enterprise is accomplished.


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