Challenges of Nigeria business environment
Nigeria is a country located in the western part of Africa blessed with human, mineral and natural resources. Her human resources are derived from its large population standing as the most populous country in Africa as a continent. The mineral resources in Nigeria ranges from Coal, Lignite and Coke, Gold, Columbite Wolframite and Tantalite, Bitumen, Iron Ore, Uranium, Ecological effects e.t.c. Challenges of Nigeria business environment is now the talk of the town.
Talking about her natural resources, Apart from petroleum (i.e to say the crude oil), Nigeria’s other natural resources include natural gas, tin, iron ore, coal, limestone, niobium, lead, zinc, gold, Kaolin, Syenite & Tatium and arable land. The oil and gas sector as been accounted as taken about 35% of her Gross Domestic Product (GDP) and its petroleum exports revenue represents over 90% of her total exports revenue.
Despite the growth of the economy and the potential of great business opportunities, there are challenges of Nigeria business environment which stand as predators (constraints) to the survival of business in the country.
Below are the major problems or challenges of Nigeria business environment which an investor could face:
Lack of Enabling Environment and Infrastructure
The Nigerian business environment lacks basic social amenities and infrastructural facilities that aid business development and survival. For example, if an investor intends to start or set up a production firm, he or she will find out that they need to provide their building, water supply, logistics and other amenities needed.
Poor Power Supply
So far, Nigerian government has not been able to find a lasting solution to the situation of poor power supply in the country which affects the big organizations including the multi-purpose and one-man businesses.
The presence of this as a major constraint of Nigeria business environment has killed a lot of infant industries in the country.
Poor Transportation Network
The country has been for a long time facing poor motorable roads all over the nation. Especially ones linking the rural areas to the urban areas that could aid the welfare of the Agricultural Sector of the Economy as well as the free movement of the people as a whole.
Other means of transportation including the railways and waterways also have not been fully established.
Poor Accessibility of Funds
Finance and funding is a major aspect of setting-up and running a business. Money is needed to buy materials, supplies, equipment, pay staffs and lots more. In the country, funding is also part of the problems especially if an entrepreneur does not have enough money to kick-start the business which occurs mostly in a one-man business.
Financial institutions (including banking and non-banking) that could help investors have so much increased their interest percentage on available loans, thereby become affordable for companies.
Lack of Government Support
Government is the backbone of a country’s economy. Frequently, people have been complaining about government not doing enough to help startup and running business.
In starting a business, one needs to register to provide all information as it may concern the business in accordance with the government policy.
People have often complained about the cost of such registration and the administrative bottlenecks involved in registering the business, which leads to a delay in the business set-up. There is also the problem of high taxation and duties placed on the business operation.
Other problems that may affect the business include:
- Inadequate security of lives and properties,
- Political instability,
- Lack of adequate technology,
- Lack of good Managerial and strategic planning and decisions and,
- Inadequate infant industries protection.