By Sheriffdeen A. Adesanya
In my previous article, I talked about some of the factors that may make doing business in Nigeria possible. Yes, it is true that anything that has an advantage also has a disadvantage, especially in a country like mine, where having a successful business does not mean one is insusceptible to having a failed business.
The following are likely factors that can inhibit doing a successful business in Nigeria.
Inadequate Capital
This can be said to be a major reason behind so many businesses folding up. Inadequate capital is a major reason for the dearth of entrepreneurs, ideas, and dreams. Acquiring capital for businesses comes as a challenge because there are few banks and start-up loan providers for entrepreneurs. Most Nigerian banks are not willing to risk giving loans to entrepreneurs as they mostly say that “entrepreneurs misuse business loans for other personal purposes.”Â
Another reason is the high interest rates on loans provided to entrepreneurs. This poses a threat to start-up business owners. Loan providers take up only jobs with adequate profits to cover all the excessive rates of the loans.
Lack of Government Intervention
The Nigerian government sometimes tries to help but these interventions only get to a few people who are likely in the position to take advantage of these incentives. In Nigeria, there is a common saying among the people about “who you know.” This simply means that these benefits can only be derived if you have connections with the right set of people.
As an average Nigerian citizen, an entrepreneur would not be granted these incentive opportunities if he is not well-connected.
Shortage Of Adequate Technical and Technological Infrastructure
Aside from the previous challenges, the Nigerian government has not been able to provide adequate technical and technological structures to help entrepreneurs develop their businesses quickly compared to the developed countries where there is the security of properties and infrastructure.
An example is the provision of free access to the Internet, CCTV, and uninterrupted power supply, which is a challenge to start-up business owners and entrepreneurs.
Fear of Partnership
This is another inhibiting factor for start-up business owners and entrepreneurs. It is a well-known fact that forming partnerships with other industries to secure the future of a developing business is not easily achieved because of a lack of trust between different companies.
Problem of Marketing Products and Services
Business owners constantly need to grow and sell their products and services. This is a major factor for entrepreneurs when determining where to sell and market their services. For a company rendering services (the products are not physical), making guidance on where to get funding and business development and management strategies is critical, whereas companies with physical products need to make continuous sales and marketing development strategies for growth and expansion.
Career, Personal, and Financial Risk
Becoming an entrepreneur requires some sacrifices in career, making ends meet, and catering to family needs. It also requires a fixed amount to stand as the business capital.
About the Author
Sheriffdeen A. Adesanya is a graduate of CIAPS Business Development Management.
