Nigeria has a population of over 150 million out of that 40 % represent the active and young population. This is clearly a huge market when you think about the fact that the nation is still not well developed.
Starting a business in Nigeria comes with some really challenging challenges aside from the standard ones each business faces. In Nigeria you have to provide your own power source, Pay huge communication costs, compete with bad roads, slow Government procedures and insecurity.
doing business in Nigeria of power supply in the country is such that there is simply no guarantee on the number of hours of electricity supply you might get daily or in the event that you could find whatsoever. Despite all the attempts of the Government in this regard, the nation of Power supply has stayed poor.
As a business owner, you must factor in the cost of producing your own power for 100 percent of the time typically. When you consider the fact that in most foreign countries, this is not the case. This definitely contributes to greater company startup costs and fortunately more market for generator Producers and Providers.
With the coming of the GSM Technology in 2002⁄2003, mobile phones became accessible on the roads in Nigeria. Its affordability with respect to Tariffs has stayed high when you compare it to other countries. Most GSM businesses and Fixed line phone Operators have dreamed of the high cost of power generation for their business activities and the high cost of the operating licenses as the major reasons for top phone tariffs.
These variables also have an effect on the Internet service providers to a large extent. Though there’s been various attempts to bring down bandwidth costs by construction of direct international cable links like the “Glo-1”, “SAT-1” etc however, the demand is considerably more in excess of these initiatives can provide. The majority of the populace still depend on satellite technologies which is still very pricey in Nigeria.
If you plan to do business in Nigeria, then get ready for high web and mobile bills.
Depending on the kind of business that you want to do, almost 80% of Nigeria streets outside the business centers are poor. For those in the business centres, I could say about 60% are bad. If your plan is to start a road transport related business like logistics, cargo, shipping, taxi etc you might want to budget a significant amount of money for automobile breakdown due to poor roads. Even if you’ve got a mill, then you may sill have to get your products to the distributions centers. This is definitely another major obstacle to conducting business in Nigeria.
Other regions of the country are relatively secure apart from the unavoidable isolated small incidents such as burglary and property break-in. Unfortunately, Nigeria depends heavily on Oil and has made very enormous investments in that respect.
The petroleum sector accounts for the majority of foreign direct investment in Nigeria and the current insecurity situation in the oil producing areas is not helping that industry of the economy. Though there has been attempts by the government in this respect but a good deal more needs to the done to improve the quality of life of individuals living in those areas before it can become completely safe to do business there.
These are undoubtedly not the only challenges you would face to begin or run a company in Nigeria but they’re the most annoying ones.