Ever wondered what it's like doing business in Nigeria? Francois van der Merwe, an employee of a South African financial services company which recently bought a stake in two Nigerian firms, wrote down some thoughts and observations for TradeInvestNigeria during a recent business trip to Lagos.
Sunday 31 August . . .
Flight SA60 from Johannesburg to Lagos is packed. The passengers are probably split up two thirds South African and one third Nigerian. A 99% male orientated South African passenger profile signals to me that they are all on the plane for business. This view is strengthened from the conversations I overhear - MTN, Multi-choice, Stanbic and oil-rigs are mentioned frequently. The duty free sales on the airplane is something that I have never seen before. The sales commenced after the meal was served and continued until just before we landed. Money is spent freely and is an indication to me that the Nigerians have a thirst for upmarket goods.
Outside the terminal I am greeted by my friendly Nigerian business colleagues who have been waiting for me for some hours. I am whisked away on a road network that is not meant for the faint of heart, but seems to work well if you are a local driver. I don’t have to worry about driving in Lagos as I always have a driver available to my beck and call. My hotel is conveniently situated close to The Palms Shopping Centre in Lekki – a mall with all the familiar South African names such as Shoprite, Game and Nu-Metro. The hotel has all the necessary amenities and most of all, it is clean, comfortable, and it has air conditioning! Lagos sure can get hot and humid.
Monday 1 September . . .
It’s an early morning wake-up after a good night’s rest to beat the Lagos traffic. At 7.30am the office already has a buzz. People around here start early as they have to leave their homes at a daft time in the morning to avoid traffic. Business conditions tend to be more formal than what I am used to. Everybody from back office to front office is wearing suits and ties. In addition, there seems to be a strong management hierarchy. Business respect is a prerequisite and a lot of emphasis is put on the shaking of hands.
My early morning internet connection problems were sorted out much quicker than expected and by the afternoon I was up and running. The IT support and infrastructure impressed me. During dinner at the hotel in the evening I overheard some local businessmen talk. They have big plans for Nigeria and they are determined to make a difference. They look at the growth achieved in other countries and want to implement it in Nigeria. Many of them have returned to their roots after spending time in either the UK or the USA.
Tuesday 2 September . . .
It rained non-stop today. The rain makes driving in Lagos difficult as the rainfall is hard and the roads are filled with potholes. It makes you realise how fortunate we are in South Africa, and that Lagos has a lot of work to do on its infrastructure. At the office the generators are running full steam. Power supply shortages are frequent, but back-up generator supply is plentiful and the transition during black-outs are almost seamless.
Working with the Nigerian people you realise what a friendly culture they really are. Not the image that is normally portrayed in South Africa. At the office there is always someone to help out with any issues or requests - and they do this with a smile.
Nigeria is basically a cash economy. Specialised credit cards have recently been introduced, but most bills still need to be settled in hard currency. It is amazing to see large sums of cash change hands. Dollars are changed into Naira by a gentleman who comes to the office with a back-pack full of local currency. If this was done in South Africa, chances are that he would have been mugged by the time he set foot out of the building. When I left the office at 6.30pm that evening, there were still employees working. Most of them have been there since the early morning - another indication that this is a hard working nation.
Wednesday 3 September . . .
I ran into the chairman of the hotel this morning. We discussed US politics, one of the favourite topics of conversation over here. The Nigerians are keen on the developments within the US presidential race and most are fervent supporters of Barack Obama. I attended a conference to launch the first real estate investment trust in Nigeria. The facilities impressed me, although the conference follows African time and starts late. The conference starts and ends by prayer and follows an interesting mix of marketing and hard facts. It makes me realise that propaganda is widely used, but if you talk to the right people you can get decent, to the point information. This made me realise another aspect about business operations in Nigeria: you need to partner with sound Nigerian partners who understand the local environment which can result in a mutual beneficial relationship for both parties as they require skills transfer.
Thursday 4 September . . .
Pension fund reforms commenced only two years ago in Nigeria. The overruling body is called PENCOM and the South African equivalent would be the Financial Services Board (FSB). Today we attended a workshop between the pension fund administrators and PENCOM. What fascinated me was that the workshop was so interactive and that the commission was open to discussion and dialogue. Admittedly, many industries are still young and unsophisticated in Nigeria, and this can lead to some hiccups, but there is an urge to improve and open dialogue is an ideal way to smooth this out.
Friday 5 September . . .
It is my last day in Lagos, and after having experienced the formal side of business, I am surprised that they follow the "casual Friday" route, although business attire is replaced by traditional attire. The trip back to the airport is long and the traffic is congested, but it allows me time to reflect on the environment. Looking around, the roads are filled with taxis, buses, and surprisingly, luxury cars. I notice many new Toyotas, Honda Accords (I have been told this is one of Honda’s biggest markets world wide) and Mercedes Benzes. This once again confirmed my initial view that there is a lot of spending power in Nigeria and that the numbers are definitely in their favour. Out of a population of roughly 150 million people, you only need a small percentage of big spenders to create a large demand.
Operating in Nigeria is by no means as easy as in South Africa, but looking around there are many possibilities and opportunities that can result in the proper risk/return payoff, and more importantly, Nigerians are receptive to the appropriate intellectual capacity to help them become a dominant world force to be reckoned with.