Factors killing Startups, small and medium businesses in Nigeria

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Jegz
Senior
Location: Naija
 

March 11th, 2021, 5:54 am

Factors Killing Startups, Small and Medium Businesses in Nigeria

Good day besties and welcome to another of my articles. I'm Jegz, founder of Bestnaija. Today, it's about entrepreneurship in Nigeria. Those who know me do know that I'm an advocate of entrepreneurship, innovation and position change. So, enjoy.

Statistics prove that many of startups and SMEs do not make it beyond the first 5 years all over the globe. This statistic is global but the percentage that fail now varies from nation to nation depending on the specific factors applicable to such nation or country.
Nigeria2.jpg
NIGERIA
If taken to stats, majority of startups, small and medium enterprise businesses in Nigeria die tragically before first 5 years and even those that survive are actually most likely struggling afterwards. Thanks to the TOUGH business climate here. I can explain.

1. No or epileptic power supply
Like I wrote emphatically in one of my previous topics, Nigeria's power issue alone is sufficient to kill a young person's career dreams as far as innovation and entrepreneurship are concerned. I cited example of my friend who struggled and struggled with his startup here in Naija for years but no way. He moved to a neighboring country whom we once said . And my friend is thriving. Why?

The climate is reportedly businessfriendly.

Whatever that entails, I believe it must be the EASE-OF-DOING-BUSINESS factor. Many and more of the following make doing business in Nigeria tough.

Power (electricity) has been a menace for decades in Nigeria. Some say we supply neighboring country and that country has stable electricity. We the supplier do not have. Ironic right?

We beg the government to fix power issues. I used to say that if we have a regime that spent all 4 years to fix power issues alone but left other sectors status quo, I'll vote them in again to fix another thing for another 4 years. I think that's progress. Real progress.

Effects of power on businesses
Power supply (electric) especially is needed to drive many businesses. Even startups that work on computer alone still need electric energy. Barbers do need electricity. Now, with the supply missing, we're forced to rely on costly fossil fuel the price of which is skyrocketing. That leads to increased cost of running.

And... With power cost eating too deep into your profit (if any left), you're just going to run out of resources and go broke or your business fails due to lack of profits. And that's the end.

To counter the effects, some businesses transfer the additional power cost unto their prices. This is why cheaper China products sell faster in the Naija market more than our products. So buyers fall back to imports - with another negative impact on GDP and FX.

So, dear current regime, please fix power issues.

2. Government charges, taxes et cetera
I have a small shop where I trade some small items. I was not surprised when my storekeeper told me that 4 different government agencies are coming for all sorts of charges and bills! On top how much? Shineke! :shkd:

BIR, Local government, land use charges, FIRS, and many others will hit you with bills asking you to pay outrageous bills to the government. Bills that will make it hard for you to pay your staff SALARY! Men, every shop owner in the country will relate. Standardisation is needed in many parts of the country. Also, small businesses should enjoy fairer charges and not be billed like corporations. We're not producing Apple iPhone here. Excuse me, we're still coming up. Let us survive first before you start milking us dry.

3. Crazy bank charges
Not just the banks' own charges, but also government charges like the NOTORIOUS STAMP DUTY.
I explained the charges to a disgruntled bank account holder who runs a small shop. She replied with the CRYING EMOJI! The weekly charges she gets eat up her little profit. That's asides her running expenses like power cost.

Stamp duty, COT (now AMF), SMS notification charges, and many others are not friendly but inimical to small businesses and startups. They eat your little profit and then business fails.

Any nation that wants a better national future rid of over reliance on imported items must survive and prioritise small.and.medium businesses.

Dear regime, look into these.

4. Insecurity
Do I need to dwell so much on this? I don't think so.
Farming used to be safe. But now, with kidnappings, unknown killer herdsmen, et cetera, farming has become dangerous. We all know the stories.

Businesses thrive only in safe environment. and yet, the primary responsibility of any regime or government is to ensure the safety of her citizens. A sense of security will booster many positive development.

What do we witness in Naija currently?

JAPA!
Truth is.... Most of my peers don Canada, US, UK and even Ghana house our brightest Naija brains. That brain drain is in all levels. That's bad.

Naija is supposed to be a have of business and investment from the world over.

How did oil-less DUBAI and once-in-shambles Singapore do it?

That's a question to our leaders.

LETS BE POSITIVE, GUYS
Tough times don't last but only tough people do.

I SEE CHANGE!
Let's remain positive as I see change soon. Fact is... Not only people and government can bring change. Some changes are forced by the AGE or GENERATION.

Such inescapable changes have global effect and long lasting benefits if used for good.

CHANGE is here.

You have responsibility to stay alive to see it. Stay safe, be positive and you will live to see these coming changes.

Again, tough times (regimes, government, etc) don't last but... Tough (positive minded) people do.

This is our generation. And I'm an advocate of a better Naija.

Follow me.

Please share...

"Many of us are not living our dreams simply because we are busy living our fears" - Les Brown
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eMade
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Location: Abuja
 

March 11th, 2021, 6:31 am

Well said sir! things. :good:
Learn more about ✓ VIP Members: https://www.bestnaija.ng/61848 ✓ Referral: https://www.bestnaija.ng/62508
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NiceGuy
Senior
Location: Lagos
 

March 11th, 2021, 6:59 am

These factors also limit innovation
I'm really not that nice... :mrgreen:
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green20
VIP VIP
Location: Rivers state
 

March 11th, 2021, 7:28 am

:clap: :clap: :clap:
You have said it boss
Wonderful article :D:
"We must use time wisely and forever realize that the time is always ripe to do right."
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TitanKenneth
VIP VIP
Location: New York
 

March 12th, 2021, 12:41 am

:clap: yes, this is mainly what's eating up the country
Follow me on facebook "Titan Kenneth".
https://mobile.facebook.com/profile.php ... speed_dial
Sucrates
Senior
 

March 12th, 2021, 6:10 am

TitanKenneth wrote::clap: yes, this is mainly what's eating up the country
And yet we have leaders who are not sincere. All after their pockets.
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TitanKenneth
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Location: New York
 

March 12th, 2021, 6:34 am

Sucrates wrote:
TitanKenneth wrote::clap: yes, this is mainly what's eating up the country
And yet we have leaders who are not sincere. All after their pockets.
:lol; leave the thiefs
Follow me on facebook "Titan Kenneth".
https://mobile.facebook.com/profile.php ... speed_dial
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Jegz
Senior
Location: Naija
 

March 12th, 2021, 8:16 am

022663Ro wrote:You've just said it all
Thanks brother. Thanks for joining Bestnaija!
"Many of us are not living our dreams simply because we are busy living our fears" - Les Brown
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