HOG Nigeria business support system

Nigeria's Business Support System: Perception Versus Reality

Today, Africa is facing multiple challenges like inadequate healthcare and education, logistical complications and mobility problems. However, it is also a spot for innovation. The complications it faces translate to opportunities that spur the development of many industries. Here is a look at how conducive the African environment is to businesses in 2021.  

First, one should remember that the African terrain is not homogenous in terms of economic and technological opportunities. When comparing across countries, you will see drastic differences. For instance, most of the top 10 cities with favourable business conditions for start-ups are in Nigeria. But what about the rest of the continent? 

Impressive, But Not Ideal 

At the moment, some of the most promising areas are Lagos, Port Harcourt, Ibadan, and Abuja. This rating is based on the time and procedures necessary to start a business. The entrepreneurship culture index also plays a part. 

The World Bank Group Doing Business 2020 report offers a few available insights. The study confirms that Nigeria is leading the way in terms of business climate improvement. In fact, it is one of the top improvers worldwide. 

Nevertheless, these conclusions are not universally accepted. The report is focused on Nigeria and looks at perceptions of interpreters and factors that may hinder progress. Let's look at the positives first.

Unique Solutions for the Local Market

In recent years, Nigeria has seen quite a few Innovations. For example, consider Helium Health, a start-up focused on increasing accessibility of healthcare. The company wanted to avoid problems with the electric supply by using solar batteries, particularly in government facilities.

All the country also has a rapidly expanding online forex trading sector. Global Forex brokerage brands, such as ForexTime, are now tailoring their services to the local needs. Nigerians may open accounts in the naira and save on conversion fees. They may work from home, trading on the largest financial markets. Entry is also extremely affordable, as one may open a live account with only $10. Anyone can learn forex trading in Nigeria — there is so much free information available.

Generally, the country is slowly moving towards digitalization. Still, in many realms, modernization is a challenge. For example, consider NextCounsel, a legal tech start-up. According to its CEO Gbadebo Ojikutu, many law firms are still mired in manual paperwork, and spending on technological innovation is unimaginable. The market needs to be enlightened to raise productivity.

Key Challenges in 2021

In terms of entrepreneurs' perception, there are no surprises. They still have concerns about Nigerian infrastructure, regulations, and data. These factors are generally viewed as adverse. State regulations are restricting innovation in the country; tech industry veteran Emeka Okoye supports this view. 

Adverse Government Initiatives 

Another challenge is the controversial relations between mobility start-ups and the government of Lagos. Prohibition of okada was followed by clamping down on ride-hailing businesses. In the future, regulation is likely to continue hindering innovation in areas where there is a lot to innovate around. Each region has its own approach. 

Data and Literacy 

The dearth of data has hampered the development of AI. The country is falling behind despite its inexhaustible talent pool. According to Abdulhakim Bashir, the founder of the Chiniki Guard, a theft detection start-up, the company is struggling with a lack of input.

The general level of tech literacy leaves a lot to be desired, just like financial inclusion. Of course, some issues are specific to the innovation model. For example, underbanked is less of a problem as companies may adopt agent banking. However, an educational start-up providing access to training via websites needs to cope with imperfect internet penetration.

The Taxi Controversy 

Sometimes, start-ups are pitted against the state government, which comes up with similar solutions. In such situations, it is difficult to say that there is beauty in competition. AutoSave, a failed vehicle rescue-on-demand service has faced such challenges. 

In March 2020, Ekocab started providing taxi services alongside ride-hailing apps. The company, supported by the Lagos government, was presented as an effort to boost the relevance of regular yellow taxis. However, this clearly put Uber and its likes at a disadvantage. Coupled with the tightening of restrictions for apps and the ban on okada, the measure was ridiculed on social media. The timing made it extremely unpopular. 

Success Is Possible

Despite the controversial actions of the Nigerian government, some start-ups in the country have taken off, and they are thriving. What sets them apart from losers? Clearly, it is a better understanding of the business environment and adaptability. Succeeding in Nigeria is not easy, but it is possible for companies which are flexible enough.

 

Mary Wood
A California-based travel writer, lover of food, oceans, and nature.

1 comment

Lynne Emanuel

Lynne Emanuel

Hello There!

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Here is an example of the kind of search optimized articles that we write for our partners:

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Just so we’re clear, we do this for free, in order to build relationships and to help our friends in the home improvement and furniture community.

If you don’t want to write an article featuring your site on our blog, that’s no problem…we can offer you a link to your site on one of our current articles….and we will still be happy to write an excellent article for your site!

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Lynne

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