Monday, May 22, 2017

Starting a Business in Nigeria, What to Expect.

Nigeria is known all over the world as the most popular African country and it is also known as the most populated country in Africa. This country has had a fair share of economic troubles; but there is no doubt that Nigeria is a nation where a lot of money is to be made.

 

What to Expect

If you plan on doing a Business in Nigeria, there are a couple of things that you ought to expect, and some of these things include:

 

Do Not Expect Steady Power Supply

This is a major issue in the country. Many Nigerian business owners depend on diesel or gasoline powered electricity generating units in order to run their businesses. There are some parts of the country that go for weeks (and sometimes months!) without power supply. Most Nigerians are simply tired of complaining and simply choose to purchase electricity generating unit (popularly called “gen”). As a matter of fact, virtually every building in Lagos has at least one power generating set. Do not even think of setting up a business in Nigeria without factoring in the cost of acquiring an alternative power source.

 

Overestimate The Cost of Everything

Prices of goods are not exactly stable; you could purchase a product or goods for a certain price in the morning, and be informed that the price has gone up a couple of Naira (the local currency)  higher, So, to be on the safe side, always overestimate the cost of the items you want to buy.

 

The Road Network is Not Exactly A-Class

Transporting goods from one state to another is not only an expensive business; it is also a pretty risky one as well. Many of the roads are really bad; some will call them “death traps”. You will need to be able master driving skills that will involve avoid potholes or talking your way out of paying a fine for reckless driving or simply hire a very experienced Nigerian driver who has perfected the art of avoiding potholes and traffic.

 

Expect to Pay A Huge Sum for Office Space

There are two ways to rent an office space in Nigeria’s most popular state and business district, Lagos (also popularly called “Eko”); you can rent an office space through:

  1. A local realtor
  2. Reputable realtor

 

Naturally, your gut instinct will be to go with the “reputable realtor” but the truth is that working with a top realty firm in Lagos will cost you money….a lot of it! These realtors charge way too much money to help you search for an office space. The local realtors may lack the finesse that many top realty firms possess, but they are dirt-cheap!

 

You will need to pay for a two year lease for a regular office space – the least is one year! You will also need to pay a colossal amount for agency fees (popularly called “agency and agreement” fee)

 

Location! Location!

The location of your business is also a very important factor to consider when you want to start a business – especially in the city of Lagos. In Lagos, prestigious addresses include:

  • Victoria Island
  • Ikoyi
  • Maryland
  • Ikeja
  • Surulere

 

Most people will not do business with a firm located in certain parts of Lagos, considered to be slums!

Now you know what to expect, so get ready to do business!

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