Wednesday, September 30, 2020

MAJOR CHALLENGES OF DOING BUSINESS IN NIGERIA

 MAJOR CHALLENGES OF DOING BUSINESS IN NIGERIA

MAJOR CHALLENGES OF DOING BUSINESS IN NIGERIA


Nigeria is one of the largest companies in the world on the African continent. But when it comes to doing business in Nigeria, a typical Nigerian business is met with many challenges. In 2016, Nigeria ranked 169th in the World Bank's Simple Doing Business Survey, out of 189 countries.

In the first three years, 80 percent of new companies and startups in Nigeria will fail. Doing business in Nigeria may be a wonderful experience, but a new business or startup will face great challenges and difficulties before success. Starting a business company usually entails its own business risk that can interfere with such a company's growth. Still, all companies in Nigeria have very common problems and challenges. In this paper, we highlighted Nigeria's top business challenges and how to solve those challenges in others to ensure that they don't ruin your business.

CAPITAL AND CREDIT ACCESS

One of the difficult tasks is to raise money for any entrepreneur who wants to start his own small business. Simply put, capital is the amount of money that the organization will spend on different business activities. If you're one of the bloc's rich children, it's never easy to collect capital and takes persistence and patience.

Lack of financial capital is the greatest problem in Nigeria when it comes to doing business. And when financial schemes were conceptualized and introduced to benefit enterprises, the government still had difficulties ensuring that financial resources are readily available to entrepreneurs. In most cases, entrepreneurs must use personal investments, corporate loans, families and associates, or government grants to access business financial resources.

POWER/ELECTRICITY SUPPLY

Entry to constant energy and power is a major business issue in Nigeria. Average households in Nigeria can have access, as of June 2018, to 6 hours of uninterrupted power out of the day's 24 hours. That is why generators are so popular in Nigeria as an alternative power source.

9 out of 10 houses in the State of Lagos alone have at least one generator as an alternative power source. In recent decades, successive governments have failed to fix Nigeria's energy deficit crisis. The new Minister for Power, Works and Housing, Mr. Raji Fashola, has blamed consumers on the lack of enough financial expenditure in the energy sector for insufficient electricity supplies.

GOVERNMENT REGULATIONS

The government plays a critical role in determining how Nigeria does business. No government or economic system leaves some decisions on the market. These regulations are intended to keep companies under control and to ensure that they obey a general law. Corporate legislation is called the Corporate & Allied Matters Act (CAMA).

African countries rate low on the "Doing Business" a score of the World Bank. This is mostly due to the difficulties of starting up a business. In Nigeria, a company's establishment will take between 2 weeks and one month and often involves several regulatory hurdles. The government supports local startup ecosystems more, but the Nigerian government generally needs to do more to make it simpler and more exciting to do business.

CORRUPTION & BRIBERY

While Nigeria is one of the world's largest investment destinations and officially functions well, corruption and bribery continue to be significant obstacles. The federal political system's composition suggests a wide variety of enforcement agencies, which may lead to elected officials seeking bribes.

In 2013, according to the Transparency International Corruption Perception Index, Nigeria ranked the 14 most corrupt country in the world and organized crime in some parts of the country is a major issue. However, President M. Buhari's new administration is fighting hard at all levels of government.

MARKET DEVELOPMENTS 

The most important thing here is disruption, such as digital or technical disruption. It affects companies from all sectors in Nigeria. There is also a danger to the industry that global economic growth is unpredictable. When you are uncertain of how the economy can shift, business strategy and strategic growth are far harder and more dangerous.

In an attempt to plan for these threats, many corporate companies (such as banks) are now funding startups to become part of the revolution or to grow smaller, agiler and very different parts of their enterprise to look ahead and to become aware of emerging market developments that may impact how business is done.

INSECURITY

Domestic terrorism, kidnappings, community clashes are just some of the national security challenges that this country faces every day. Theft and organized armed robbery are the businessmen's worse clothes; no one seems safe and safe from this danger that has ruined our society. This means that company owners and companies invest more than enough on safety initiatives, which raises the costs of operating a business in Nigeria.

GET PROFESSIONAL AND TRUSTWORTHY WORKERS

Most effective companies in Nigeria have struggled to get employees who have no problem in one region. The quality of the people you hire plays an important role in the success/breaking of a company. While skilled and well-trained job seekers in Nigeria are generally not lacking, the challenge is to look for employees who agree with your business vision.

These are some of the challenges in Nigeria, and while they are all critical in their way, they can be overcome with good planning and determination.