Why businesses are not generational in Nigeria.
Can you mention any business that exceeded 10 years or more in Nigeria? Take your time while deliberating on it. At least for 15–30 seconds. Yea. Not more than 10, right? But football clubs, transnational corporations in Europe and America spanned years, decades, century and even centuries. You might wonder, why indigenous brands are short-lived? The thing is, Nigeria is a good place to do business but skill hoarding, knowledge trapping and fear of brand and idea theft are still common between and among friends, families as well as between siblings. Other factors culminating to the failure of businesses in Nigeria includes poor management skill, nepotism, favouritism are among some of the reasons for these indigenous brands’ decline and eventual collapse. For what I know, I can mention notable businesses that lasted more than 30 years. Even the once great Eleganza Industrial City owned by the Razak Okoya, or the early media firms established by prominent families in Nigeria are already relegated to the backdrop.
This is not to say that European and American firms and companies are immune to favouritism and other factors that set the company on the path of failing or crumbling. Rather, these factors are to an extent well managed. A sentence that best captured this issue is emphasized in the introductory page of Dr Ola Brown’s book: Economics, Banking and Finance in Emerging Markets. She indicated:
In advanced countries, there is only one set of forces that can act on your business- the market forces. However, here in Nigeria, there are two sets of forces that can act on your business — the market forces and the evil forces.
The Forces at Work
Businesses are arguably short-lived in Nigeria because of…the evil forces. In this ghost bursting write up, I identified some ‘evil forces’ or rather key factors that are discussed this piece. But what I know is this, newly established businesses, especially with the rise of digital enterprises, start-ups and e-commerce businesses attracting foreign and local investors can exceed this expectation of longevity.
Witchcraft as seen in Nollywood movies may be discarded as less important, but I beg to disagree. I believe every Nigerian know someone, who knows someone that was poisoned, bewitched or killed. This is caused by envy, pride or bitterness of a sibling, friend, colleague or loved one due to the successes of their business or mere competition. Regardless of how little their monthly profit margin is. Sadly, I did lose a loved one to this. So, this factor is too little to disregard. Notwithstanding, secrecy of the business success is common amongst entrepreneurs in Nigeria. In fact, with the rate at which literacy is developing in urban regions like Lagos, Onitsha, Kano, Kaduna and Abuja. The number of entrepreneurs documenting their business model or strategies though media outlets or social media platforms, are to a large extent non-existent. For the fear of not being killed or poison for having a successful business. Some entrepreneurs barely share their business idea with close family members or friends because of the fear of the unknown- evil force.
Another myopic issue is favouritism and nepotism. A number e-commerce enterprises, start-ups and establishments are caught in this nasty web. These companies started off as organizations projected to last a lifetime. These impediments are revealed in their staff profiles. You will need strong connection. From the receptionist to members of the executives, recruiting family members, friends or old colleagues. Not solely based on merit but preferential selection. This is not to downplay the relevance of ‘connection’ and networking in a professional space. Or to dispute assisting a family member or friend as a wrongful act. But, knowing that the individual selected to fill a particular role or position is not skilled or qualified, why recruit him/her? One could easily invest an equal amount of a month or two months salary that this specific role/position could offer to him/her as a dedicated investment for any business they sort to establish. Sponsoring him/her through a certificate course should be another alternative if the former is unpalatable. Rather than employ someone whose skill set does not equate or is below the official standard for the job. This positions the business/organization for doom.
Sometimes the ‘evil forces’ are with in us. Corruption is old news in Nigeria. This tale deserves a dedicated episode. Corruption is another bane that cut short the ‘lives’ of businesses in Nigeria. Especially ‘white-elephant’ businesses built on the foundation of bribery and money laundering. Genuine businesses suffer from this lot as well. Especially businesses dependent on importation. Ironically, a large number of businesses in Nigeria are naked or best, exposed to external shocks of import duties, exchange rate etc. This evil force frustrates businesses. One might even survive the struggle of clearing his/her goods from the nefarious Lagos port after three to six months since its arrival. This is made possible after soiling numerous hands. Only to wake up the next day and the price to transport his/her container had suddenly tripled. ‘Wow! The village people are at work’
It should be stressed that ‘type 2 vulnerability’ as explained by Warwick University MBA program as “bought-in inputs costs of raw materials, oil/energy or components” are known to be a common yardstick in evaluating how businesses are exposed to external shock or naked to external factors. Yet, a number of businesses are established is satisfy short term market needs. With only a few entrepreneurs, CEOs and executives conduct or encourage market research in their respective industry.
The Way Forward
Openness and tolerance are some vital keys to longevity of any business. Nigerians need to live beyond tribalism and ethnicity. This social menace has eaten into the economic fabric of the country. Without doubt, most tech companies have transcended beyond this point. Little wonder why they upscale. Take for example, the founders of Paystack. I know, when any religious Nigerian encounters the image of its founders, particularly Ezra Olubi. Judgement will be declared immediately; He is doom for hell. Entrepreneur should grow beyond what the eyes sees. Physical appearance was one of the triggering factors of the #EndSars protest in Nigeria. With profile tagging of Nigerian youths by a department of the Nigerian Police Force culminated to a nationwide protest and outrage that scarred 2020.
Another important recommendation is transferable knowledge in businesses. If any enterprise or organization sort sustainability and permanence, it must document its business model. Businesses in emerging economies are peculiar and unique. It is worth learning. What we know of the past are testimonies of what was left behind. One who knows the failures his/her past will certainly not repeat it, rather learn from it. But how can one learn from an enterprise that its everyday activity, business strategy, market forte etc. are unknown? For how long will the history of small and medium enterprise be told orally? This ‘tabula rasa’ type of business or individualistic business model has hauled some promising businesses to untimely collapse upon the death of the C.E.O.
Africans need to wake up. Nigerians should think beyond the now! Businesses are generational. Even Joseph taught Jesus Christ the art of carpentry. Why not transfer knowledge, skill or best, document it for the next leader that will take up the mantle of leadership for your enterprise? Least this ‘evil forces’ are known. The time is still right to perform an economic exorcism.