The first step for any firm entering a new market involves gaining an understanding of the norms and business culture of said market. As an executive working on behalf of a multinational company, you already know that familiarizing yourself with how a foreign market functions is crucial to the development and retention of the professional relationships needed to ensure your company’s success.
In a vast and culturally diverse country like Nigeria, figuring out how to navigate different business situations can be a daunting task. Nigeria is a big market, and if you want to capture the opportunities offered in this market, you have to understand Nigeria’s business culture.
Although business styles vary from individual to individual, understanding the overall business culture in Nigeria will help you adjust to your new environment faster and quickly secure a place for your firm in the market. Read on to learn valuable information about Nigeria’s business culture that will help your company excel in this market.
The Ease of Doing Business
When it comes to the ease of conducting business, Nigeria ranks 145th out of 190 countries according to the World Bank Group. The scale used to measure the ease of doing business in various countries is each country’s proximity to the frontier score, which takes into account various regulatory practices, such as starting a business, dealing with construction permits, paying taxes, and the capacity to trade across borders.
Improving the country’s ease of doing business ranking has been a recent priority for the Nigerian government, in an effort to bolster the amount of Foreign Direct Investments (FDI) in the country. However, despite the government’s recent efforts, businesses in Nigeria still have to grapple with the lack of adequate infrastructure, such as inconsistent electricity, bad roads, and a shortage of well-trained personnel.
These realities make operating a business in Nigeria fairly difficult for new entrants. Therefore, it is imperative that you set your expectations accordingly because your entrance into and expansion within the market might not go as quickly as you expect.
A Resilient Attitude
At this point, you might be asking yourself, “If operating a business is so difficult in Nigeria, how do businesses stay open?” The answer can be attributed to the resilient attitude of Nigerian business owners. Business owners and entrepreneurs in this country have spent years dealing with many challenges while running their business in Nigeria, that they have learned how to adapt and work around potential roadblocks.
In fact, what you might consider a “roadblock” is nothing but a “speed-bump” to a successful business owner in Nigeria. You will definitely notice this resilient attitude amongst successful Nigerian business owners, and you should consider partnering with these local businesses as needed to help establish and grow your business in the Nigerian market.
Entrepreneurial or Opportunistic?
One thing many foreign managers, such as yourself, notice about Nigeria once they begin conducting business here is the entrepreneurial spirit that resonates across the country. This rampant enthusiasm for commerce in Nigeria has helped cultivate a unique business culture that is unlike any other country in the world. If you ever visit Nigeria and Lagos in particular, you will notice the country’s bustling spirit as soon as you step off the plane.
Nearly everyone in Nigeria is some type of entrepreneur, from the 70-year-old business owner that has been running their business successfully for over thirty years, to the up-and-coming street hawker selling food alongside the road. During your time here, you will notice that running a business is almost a badge of honor for a lot of Nigerians, who are always looking out for new opportunities.
Nevertheless, for every strength, there is a concurrent weakness. That is to say, that the same entrepreneurial spirit, which has helped several Nigerian businesses scale in size, can easily transform into opportunism. The main cause of this change is the fact that people are constantly in the search of new opportunities, which causes them to be pulled in multiple directions at once.
This opportunistic attitude leads to business owners chasing short-term goals and disregarding the need to build long-lasting relationships that will help ensure their business’s longevity. As a new entrant, spending some time with potential business partners before you enter into an agreement with them will allow you to see if their goals align with your long-term plans. This will help you separate the short-term opportunists from the long-term entrepreneurs.
Respecting the Hierarchy
Nigerian business culture is hierarchical in nature. People generally defer to those who are older than them or who occupy a higher official position than they do. Since respect is such a big part of Nigerian culture, being aware of the age and the official position of the person you are currently working with or looking to work with is essential.
If you do not respect this aspect of Nigerian business culture, you risk sabotaging current or potential business relationships, as professionals will not want to continue participating in business discussions if they feel as though they have been disrespected. As a rule of thumb, it pays to be respectful to everyone you encounter from the secretary to the managing director.
Roughly 75-85% of businesses in Africa are family-owned and operated enterprises or businesses that are run by a single entrepreneur. You will find a similar business culture in Nigeria, particularly amongst well-established companies. There are numerous businesses that have multiple family members serving in a managerial capacity and as employees.
Many of these family-owned businesses have a specific growth trajectory and long-term plans that include handing future managerial duties to other family members. Understanding the incentives that drive family-run businesses, and maintaining an awareness of certain family dynamics will allow you to quickly familiarize yourself with the possibility of any partnerships or conflicts with your organization.
Most business owners in Nigeria are proficient in English, which means most of your communication will happen in English. However, communication styles will vary amongst individuals, which means that to operate a business in Nigeria you will have to be attentive and shift your communication style to match each business professional with whom you make a connection.
Generally speaking, business in Nigeria is very relationship-based and face-to-face meetings are the norm. You should also expect to spend a lot of time getting to know your new business contact as you attempt to understand your mutual business priorities.
Furthermore, Nigerians would rather converse over the phone than by text message or e-mail. Therefore, you should opt to speak over the phone if you are unable to meet in person, as this will help you communicate more effectively and accomplish more of your business goals. With that said, do not expect quick and clear responses to e-mail inquiries from business professionals in Nigeria.
The “Corrupt Country” Issue
One of the larger challenges that new entrants in the Nigerian market face is finding credible people and businesses with which to partner. This fact tops the list of concerns for managers of multinational companies who are overseeing their firm’s operations in Nigeria because this country has had a long-standing, global reputation for being a corrupt country.
Although, there is some truth behind those former claims due to the well-known internet scams perpetrated by Nigerians, as well as news about Nigerians being involved in dubious activities in other countries, there are still a good amount of credible and reputable professionals conducting business in a way that meets or exceeds global standards. Your job as a new entrant will be to thoroughly screen and vet business partners that match your organization’s ethical practices.
This article serves as an introduction to Nigeria’s business culture and, if internalized and applied appropriately, will supply the tools your company needs to make the right connections and construct a strategic plan that will help you build and scale your business in the Nigerian market.