Entrepreneurship is the journey from concept to reality, a path defined by individuals ready to make an impact in the market. In Nigeria, this journey is central to economic growth and the introduction of innovative ideas. We will broadly explore entrepreneurship in Nigeria and the factors affecting it in this article.
In the bustling markets of Lagos and the tech hubs of Abuja, entrepreneurship isn’t just a buzzword; it’s the driving force behind Nigeria’s thriving economic landscape.
Entrepreneurship is about bold individuals stepping forward to transform a vision into reality, knowing well that every risk could lead to a rewarding payoff. Part of what we do at Entrepreneurs.ng through the Start Your Business in 30 Days program is to take aspiring entrepreneurs from ideas to having a registered and functional business in 30 days. Enrol now.
Let’s unpack this multifaceted concept and understand how it’s shaping the future of Africa’s largest economy.
Understanding Entrepreneurship in Nigeria
At its core, entrepreneurship is about spotting a gap in the market and daring to fill it. Imagine a tailor in a small Nigerian town who realizes that his community needs affordable, yet fashionable attire.
He invests in some fabric, threads, and his skill, turning them into a clothing line that becomes the talk of the town. That’s entrepreneurship — spotting a need, taking a calculated risk, and weaving it into an opportunity.
However, entrepreneurship in Nigeria goes beyond simply starting a business. It’s also about being creative and strong. Think about the young people in Nigeria who are good with technology and creating new apps to solve local issues, like making traffic better in cities or helping farmers find buyers for their products.
It’s this creative energy, the determination to improve things, that really shows what Nigerian entrepreneurship is all about.
MSMEs: Nigeria’s Economic Pillars
Micro, Small, and Medium Enterprises (MSMEs) in Nigeria aren’t just business units; they are dynamos of growth and innovation. These small-scale businesses, often family-owned and operated, don’t just contribute a significant chunk to the GDP; they embody the entrepreneurial spirit by adapting to changes, surviving against the odds, and providing employment to millions.
The Broad Spectrum of Entrepreneurship in Nigeria
When we talk about entrepreneurship in Nigeria, we’re talking about a force as diverse as the country itself. It’s the fashion designer in a makeshift studio dreaming up the next trend, the farmer using technology to increase crop yields, and the street vendor who knows just how to market her snacks to the passing crowd.
In Nigeria, entrepreneurship is also about overcoming challenges. Whether it’s erratic electricity, access to financing, or navigating governmental policies, Nigerian entrepreneurs are known for their ability to hustle and pivot as needed. They’re not just business owners; they’re problem solvers, innovators, and the backbone of the economy.
Success in entrepreneurship doesn’t always come from complex strategies or sophisticated models. Often, it’s about understanding the simple truth of supply and demand, recognizing the resources at one’s disposal, and having the gumption to put it all on the line for a dream.
At its heart, entrepreneurship in Nigeria is all about the drive to achieve, the cleverness to innovate, and the strong determination to win. It’s an ongoing story, one where every Nigerian is encouraged to contribute their own ideas and solutions to help the country’s economy grow.
External and Internal Factors Affecting Entrepreneurship in Nigeria
Entrepreneurship in Nigeria is influenced by a multitude of internal and external factors that shape the landscape for aspiring business owners.
Internally, factors such as access to finance, entrepreneurial skills development, and the regulatory environment play crucial roles in determining the success or failure of ventures.
Externally, economic conditions, technological advancements, and socio-cultural factors also exert significant influence. Understanding and navigating these internal and external factors are essential for entrepreneurs seeking to establish and grow sustainable businesses in Nigeria’s dynamic market.
Internal Factors Affecting Entrepreneurship in Nigeria
Entrepreneurship in Nigeria is like navigating a river with both calm and rough patches. Let’s look at the internal factors affecting entrepreneurship in Nigeria.
Education and Training
Education is the bedrock for any entrepreneur. In Nigeria, though, there’s a big gap. About 10.5 million children not attending school means there’s a whole generation that might miss out on essential entrepreneurial skills.
Without these skills, starting a business becomes a steeper uphill battle. This is the gap we are filling with the Start Your Business in 30 Days Program. Inside Start Your Business in 30 Days, aspiring entrepreneurs move from not having an idea to starting their business in 30 days. Learn all about the program by clicking here.
Skill Development
To compete globally, Nigerian entrepreneurs need cutting-edge skills. But with Nigeria’s low rank on the Global Innovation Index, it’s clear that more has to be done to foster innovation. This isn’t just about tech skills; it’s about problem-solving, critical thinking, and adaptability. Another skill that entrepreneurs need is sales skills. They learn these skills in the Start Your Business in 30 Days Program,
Financial Literacy
Understanding money — from budgeting to investing — is key to business success. A survey by EFInA shows only 48.6% of Nigerian adults are financially literate, which means over half of potential entrepreneurs might struggle with the financial side of running a business.
Access to Capital
Businesses require capital to start and grow. In Nigeria, accessing formal credit is a significant obstacle, as reported by the Central Bank: fewer than 5% of SMEs secure loans from formal financial institutions.
This scarcity of funding can halt promising business ideas before they even take off. Recognizing the crucial role of financing in starting and growing a business, we invite a finance expert in our “Start Your Business in 30 Days” program to elucidate the various funding options available to entrepreneurs and to guide on how to become eligible for and obtain this funding. Click here to enroll now.
Infrastructure Challenges
For any business to function well, basics like good roads, consistent electricity, and reliable internet are essential. The World Bank has highlighted that a steady supply of electricity eludes 40% of Nigerians, posing serious issues for businesses that rely on power.
Addressing these challenges is at the core of our mission. A decade ago, we recognized the struggle entrepreneurs faced and responded by opening ReDahlia Workspaces.
Our co-working space offers entrepreneurs affordable access to the internet and uninterrupted power supply in a welcoming environment. Our goal at ReDahlia is to be everything to the entrepreneur. We provide comprehensive business development services that support entrepreneurs in building sustainable businesses.
Healthcare Access
Entrepreneurs perform best when they’re in good health. However, the low ranking of Nigeria’s healthcare system is worrying. Inadequate healthcare leads to more time off work due to illness and, in turn, reduces a business owner’s productivity. The ultimate impact? It hits the business’s profits hard. If this continues for too long, the business may even have to close its doors.
Market Access
Having customers is what makes a business. With a significant portion of the population living in poverty, entrepreneurs may find it challenging to find a market for their products or services.
Mentorship and Support Networks
Mentorship can significantly boost new businesses. However, Nigeria faces a shortage of structured support and networks to steer young entrepreneurs in the right direction. This absence of mentorship can make starting a business harder and more perilous.
Our “Start Your Business in 30 Days” program aims to bridge this gap. It provides entrepreneurs with continuous mentorship from seasoned business experts who have already walked the path they aspire to tread. This significantly increases their likelihood of success. Additionally, it offers them a community of fellow entrepreneurs, ensuring they never feel isolated on their entrepreneurial journey.
Gender Inequality
For women in Nigeria, the entrepreneurial field is even more challenging due to societal and structural barriers. Being ranked low on the Global Gender Gap Report indicates that women have less economic opportunity, which can limit their business endeavours.
Cultural Attitudes
Cultural attitudes towards entrepreneurship can often be sceptical. There’s sometimes more value placed on traditional employment, which can discourage some from starting their own business and can also affect how entrepreneurs are supported within their communities.
For Nigerian entrepreneurs, each of these factors can represent a significant hurdle. However, they also represent areas where focused improvement can lead to substantial growth in the entrepreneurial sector.
External Factors Affecting Entrepreneurship in Nigeria
When you’re starting or running a business in Nigeria, there are a bunch of things outside your control that can really make a difference. It’s not just about having a great idea or working hard; it’s also about the world around you. From what the government is doing to changes in the global market, these things can either give you a boost or create new hurdles to jump over.
Getting to know these factors well won’t just help you dodge problems; it can also lead you to new opportunities. So, let’s get started and break down these external factors one by one.
Government Policies and Regulations
Entrepreneurs often find themselves at the mercy of government policies. Tax incentives can help businesses grow, but heavy-handed regulations may impede their progress. For example, import restrictions can limit access to necessary materials, affecting production and pricing.
Economic Climate
The overall health of Nigeria’s economy directly impacts entrepreneurs. Factors such as inflation rates, which according to the National Bureau of Statistics, hovered around 15.75% in December 2020, can affect purchasing power and business costs.
Global Market Trends
Entrepreneurs must adapt to global market trends, which can shift rapidly. International demand for commodities, changes in trade agreements, and global economic downturns can all have a direct impact on Nigerian businesses.
Political Stability
Political events can lead to economic uncertainty. Elections, policy changes, and civil unrest can disrupt markets and affect business operations, investor confidence, and currency stability.
Technology Trends
Keeping up with technological advancements is critical. However, access to the latest technology isn’t always easy or affordable in Nigeria, which can hinder a business’s ability to innovate and stay competitive.
Competition
Both local and international competition affect how Nigerian entrepreneurs position their businesses. The ability to differentiate their offerings and capture market share is critical in a crowded marketplace.
Trade Barriers
Export-oriented businesses face challenges like tariffs and complex customs processes, making it harder for them to enter new markets and compete globally.
Infrastructure
While this can be seen as both an internal and external factor, the state of national infrastructure, such as power supply and road networks, often lies outside an entrepreneur’s control and can significantly impact business operations.
By understanding and planning for these external factors, Nigerian entrepreneurs can tackle the challenges they face and uncover opportunities for growth and success.
In the ever-changing world of entrepreneurship in Nigeria, business owners must use their skills and abilities while dealing with external factors like regulations, access to funding, and reliable infrastructure.
Despite these challenges, Nigeria’s market provides numerous opportunities for courageous entrepreneurs, supported by a culture that values hard work and independence. These factors together create a solid foundation where the entrepreneurial spirit can not only survive but flourish.
How We Can Work with You to Start And Grow Your Business
If you want to work with me to start a profitable and sustainable business, then enrol in the Start Your Business in 30 Days Program. I will take you from idea to starting your business in 30 days. At the end of the program, you will get a registered business with CAC, logo and brand assets, admin set up, one-on-one consulting sessions and more. Click here to enrol.
Every week, I teach practical business lessons that have helped thousands of entrepreneurs start and grow their businesses. If you want to benefit from my teachings, click to sign up for the weekly business lesson here.
My name is Florence Chikezie, an internationally trained award-winning entrepreneur running three profitable businesses and a member of the prestigious Forbes Coaches Council.
Also, I work with companies and established corporations to scale their impact and revenue. Reach us at Business@entrepreneurs.ng if you would like to transform your business.
See the different ways we can help increase your business success.
