Business development in Nigeria
While these statistics are good for the country’s economic prospects, they also serve to reaffirm the vital importance of business development in achieving that potential.
Past business developments
The people of the Ibo community in Nigeria are considered one of the oldest entrepreneurs in history, their experience stretching back to times before modern currency and business models developed in other parts of the planet. In the more recent past, Nigerians have adapted their natural talents to develop traditional businesses and crafts that have sustained the majority of the country’s rural and urban poor for the better part of the last half century. While the oil boom of the 1970s brought in billions of petrodollars, most of the country’s population was left unaffected by the newfound prosperity, thanks to widespread political corruption and catastrophic economic mismanagement. Due to these and other factors, the World Bank estimates that 80% of oil revenues benefited only 1% of the population.
Most of Nigeria’s current problems can be traced back to a historical overreliance on oil to the neglect of all other sectors, including customary trades and agriculture. Decades of non-inclusive policies alienated the vast majority of Nigerians, plunging the country into a miasma of extreme poverty and devastating civil and political conflict. The stagnant economic climate spawned a gigantic informal economy that continues to support most of Nigeria’s 148 million people. It is a measure of Nigeria’s inherent entrepreneurship that this informal and unorganized sector currently accounts for 65% of the Gross National Product and accounts for 90% of all new jobs.
All of these factors are highly relevant to Nigeria’s future prospects, even more so considering the degree of official neglect and the lack of support and infrastructure that the country’s indigenous entrepreneurs have had to overcome. Harnessing the informal economy and realizing its full potential is a prerequisite for Nigeria to break free of the shackles of its Third World legacy.
The future of business development in Nigeria
It’s not that Nigeria’s hopes of economic superiority are based solely on optimism and individual enterprise. Immediately after the restoration of democracy in 1999, the government of former President O Obsanjo unveiled ambitious plans to bring the sub-Saharan nation into the top 20 world economies by 2020. Abuja is also a signatory to the UN Millennium Declaration of 2000 for the achievement of universal basic human rights, related to health, education, housing and security, by a specified deadline of 2015. Both goals present enormous challenges for Nigeria in terms of reversing past trends and developing an innovative strategy for sustainable and inclusive growth.
The main focus of Obasanjo’s policies was on accelerated development through entrepreneurship education (which he made compulsory for university students of all disciplines) and creating favorable conditions for a new business regime based on innovation and innovation. adaptability. Since then, the federal government has initiated successive programs aimed at promoting businesses through the widespread use of technology and socially relevant business models. However, the degree of success of these and other measures remains a matter of debate.
According to the 2007 Gallup poll, 69% of respondents planning new businesses had no intention of registering their operations, indicating that they would still prefer to be part of the informal economy. In light of Nigeria’s long-term goals, this is certainly bad news.
Barriers to business development
The disinterest in the formal economy reflects the state of Nigeria’s tax regime and policies, which have long been considered detrimental to the growth of viable businesses. Even more worrying is the fact that this continues to be the case despite the vigorous reform process launched after the return of democracy. It is more than evident that piecemeal measures are not up to the challenges Nigeria has faced.
The following are the most important obstacles facing rapid business development:
o Absence of a proactive regulatory environment that encourages the development of innovative companies at the grassroots level.
o Significant infrastructure deficits (especially with regard to roads and electricity) and systemic irregularities affecting small businesses.
o The presence of administrative and commercial barriers that restrict capacity development and inhibit access to technical support.
o Absence of regulatory mechanisms for the effective supervision of business development initiatives, especially those in the MSME space.
o Poor access to vocational training and skills development for rural and urban youth involved in the informal economy.
o Rampant political and bureaucratic corruption, coupled with a lack of social consensus on important macroeconomic policy issues.
More than 73% of Nigerians who participated in the Gallup poll agreed that access to finance was the most important obstacle to establishing successful businesses. More revealing is the fact that around 60% of respondents stated that current policies, despite the government’s focus on business development, do not make it easy to start a business in Nigeria.
Some Additional Factors to Consider
Forbes Magazine recently caught up with Peter Bamkole of the Lagos Business School to discuss the current hurdles facing aspiring Nigerian entrepreneurs. The interview highlights three main problems:
* Restricted access to local and international markets that prevent business expansion and proliferation.
* Serious infrastructure deficits (mainly energy and electricity) that paralyze both new and existing companies.
* Inadequate access to financing and the absence of a credit policy that addresses the specific needs of companies.
The road to Nigeria’s emergence as an economic superpower is a muddy and treacherous one. More than just optimism, it calls for smart economic maneuvers that help change the country’s fortunes forever.