Nigeria has a population of over 150 million from which 40 % represent the active and young population.
Starting a business in Nigeria comes with some really challenging challenges apart from the standard ones every company faces. In Nigeria you need to provide your own energy supply, Pay huge communication expenses, contend with bad streets, slow Government processes and insecurity.
The present state of power distribution in the country is this that there is absolutely no guarantee on the number of hours of electricity supply you might get per day or in the event that you could get any at all. Despite all the attempts of the Government in this regard, the state of Power supply has remained poor.
As a business owner, you have to factor in the cost of generating your own power for 100 percent of the time in most cases. When you think about that in many overseas nations, this is not the case. how to register a business in Nigeria contributes to higher business startup expenses and luckily more market for generator Manufacturers and Suppliers.
With the coming of the GSM Technology at 2002⁄2003, mobile phones became available on the streets in Nigeria. Its worth with respect to Tariffs has remained high once you compare it to other countries. Many GSM businesses and Fixed line phone Operators have always complained of the high cost of electricity generation for their business activities and the high cost of the operating licenses as the significant causes of top phone tariffs.
These factors also affect the online service providers to a huge extent. The bulk of the population still depend on satellite technology that is still very pricey in Nigeria.
If you intend to conduct business in Nigeria, get ready for high internet and phone bills.
Based on the kind of business you wish to do, nearly 80% of Nigeria streets outside the commercial centers are poor. For those in the business centres, I could say about 60 percent are poor. If you plan to initiate a road transportation related business like logistics, cargo, delivery, taxi etc you might want to budget a considerable amount of cash for vehicle breakdown as a result of poor roads. Even in case you have a factory, you may sill have to get your merchandise to the distributions centers. That is another major challenge to doing business in Nigeria.
In Nigeria today, the insecurity problem applies largely to the petroleum rich south-south and the Northern areas. Other areas of the nation are relatively secure besides the unavoidable isolated little incidents like burglary and property break-in. Regrettably, Nigeria depends greatly on Oil and has made very huge investments in that regard.
The petroleum sector accounts for the bulk of foreign direct investment in Nigeria and the current insecurity situation in the oil producing areas isn’t helping that sector of the economy. Although there has been attempts by the government in this regard but a good deal more has to the done to first enhance the quality of life of people living in those regions before it can grow to be completely safe to conduct business there.
These are undoubtedly not the only challenges you would face to start or run a business in Nigeria but they’re the most annoying ones.
Challenges To Doing Business In Nigeria