Nigerian Business Environment: Can Entrepreneurs With Honest Intentions Succeed? - Biztorials

Nigerian Business Environment: Can Entrepreneurs With Honest Intentions Succeed?

Business Environment

As I consider the regulatory and business environment under which SMEs operate in Nigeria, I can only think about two metaphors. One, a system that saves the chaff and condemns the grain. By design, the Nigerian system appears to favor the corrupt and crafty.

Second, a system that strains the ant but lets the elephant through. Big crimes go through the system with ease but small businesses bear the vicious brunt of overbearing regulatory oppression.

For example, I am not sure why it takes nearly three weeks to open a corporate bank account in Nigeria! The day I opened a personal bank account in the US, I was asked for only one document – my International passport.

Three Weeks And Counting To Open A Corporate Account

In nearly three weeks, we have been grinding and sweating to open a mere corporate account with a bank in Nigeria. There is no document on earth we have not been asked to present, including absurdities as the maiden names of the mothers of all the directors, their local governments of origin and so on! Thanks to “regulations” from the CBN.

Government Killing SMEs Through Regulations

If you have attempted doing business in Nigeria, there’s no contesting that the Number One killer of SMEs in Nigeria are the policies of the government through their various regulatory authorities. Hundreds of small businesses drop from the Nigerian skies everyday like insects under pesticide attack.

In other climes, the government passionately supports SMEs because they drive the engine of the economy and mop up unemployment. They provide infrastructure, low-cost financing, education and coaching to help SMEs scale.

Smoothie Bar Experience

However, the SME operating environment in Nigeria can be downright absurd and sometimes comical. SME woe stories abound. Let me cite a case.

I started a healthy smoothie and fresh fruit juice bar in a certain State in Nigeria. This was a significant investment that included months of consulting, market research, gruesome business planning, own financing, business location rentals, expensive remodeling of the business location, buying equipment and employing a few graduates and assistants.

I felt very patriotic about contributing to reduce the menace of youth unemployment.

Within two weeks of opening our business, we had received two visits from the State Tax office!

While we were trying to survive the tax people, the State Waste Management Authority struck! Now, you have to understand that because we were dealing with edibles, we were deliberate from Day One that our business premises must be sparkling clean. One of our corporate values was unconditional hygiene! No spill on the floor. No flies. And everyone working in the production area must wear appropriate hygiene gear.

Then, the drama intensified.

While I was out of the office one day, I received a distress call from the office. My manager had been kidnapped! Not by the dreaded kidnappers of Nigeria but by the State Waste Management Authority! She was forcefully bundled into their van and driven off with unknown men to an unstated location. To say that this was an inhuman psychological trauma is an understatement.

Eventually, I drove to the Waste Management office to find her and other victims of that day’s raid hurdled in a caged area, like common criminals, under that heat of the Tropical sun!

My spirit sank as I saw the poor girl there – dehumanized, abused, subdued, angry.

What was our crime? We did not have the “approved” waste basket in our premises! We had our waste baskets of course but we did not purchase theirs!

While we were at it, the Local Government began sending their own revenue notices. I haven’t mentioned the rambunctious encounters with road-blocking policemen, the Federal Road Safety Corps and Customs officers! The paths of the Nigerian SMEs are lined with broken bottles.

Needless to say, we spent more time warding off these State-sponsored soldier ants than we did making sales.

Today, that particular business is dead. The State government is happy. My investment that ran into several millions has gone up in smoke. The young people I had employed have gone back to searching the streets. And the State authorities are hunting for their next kill.

Next time you see someone’s business premise, which she had built with her lifetime savings, being demolished by the government’s monstrous tractors and earth movers, you may appreciate why she looks up the sky and asks, “Is it a crime to strive to make an honest living in this country?”

Next time you hear the question, “Can good people do business in Nigeria without soiling their hands?” you can appreciate the context.

Nevertheless, I will still answer, “Yes!” Not because the environment encourages you to do right but because it pays, especially in the long run.

About the Author

Ogbo Awoke Ogbo
Ogbo Awoke Ogbo started his career with Shell, left Shell for Chevron, and returned to Shell, before leaving to consult, speak, and offer leadership, human resource and performance training to corporate organizations.