The rise of Digital Entrepreneurship in Nigeria

1. Survival
Of The
Fittest
The rise of digital
entrepreneurship
in Nigeria

2. With a growing population of over 200 million
people, Nigeria is considered the seventh-largest
nation in the world. According to the United Nations
2019 population estimate, before the end of the year
2030, Nigeria's population will rise to over 300
million, and it is also expected to overtake India after
2050.

3. With Nigerian tertiary institutions churning out over 500,000 graduates each
year, unemployment and poverty has become one of the most prevalent
issues in this energy-rich country. With no other options left, most of the
university graduates now see digital-first entrepreneurship as the ideal way to
cater to their needs.
Many people have identified market gaps and successfully started internet
ventures to make money to put food on their table. Some, on the other hand,
have entered into business with little or no knowledge about how to do so
and have experienced extreme difficulties.

4. Like every financial decision, working independently brings its own unique
challenges, although some of these problems may be tougher on some
people than they are on others. While entrepreneurship in Nigeria could be
seen as the only hope for young graduates with no other means of survival,
they must overcome dozens of challenges if they want to be successful.
Bad government and bad governance have eaten deeply into the fabric of
Nigerian society. Some may argue that most businesses were built on greed
and every other negative thing you may think of. Social injustice, conflicts and
corruption have presented prospective and current business owners with
obstacles that would not be an issue in many other parts of the world.

5. Access to the internet and digital marketing tools shifted Nigeria from the
stone age to the digital age and has offered unemployed and young people
alternative means to become entrepreneurs.
In particular, the popularity of social media platforms like Facebook, Twitter
and YouTube brought Nigerians an opportunity to make money legally, and
in many cases right from the comfort of their homes. With a considerable
number of them becoming social media influencers, bloggers or activists,
charged with promoting brands, contributing on the happenings of the
society and approaching foreign markets with their services.

6. The social media scene in the country is currently on the rise, with over 92.3
million people (almost half of the country's population) able to access the
internet. Reports have revealed that this number will increase to over 187
million before the end of the year 2023. The growing number of internet
users is why international brands are currently seeking to break into the
country's market very aggressively. Anyone with passion can become a social
media marketer in Nigeria, and not surprisingly, social media has contributed
to the reduction of Nigeria's unemployment rate by a small percentage and
has enabled people to become self-supporters and forward-thinkers.

7. But there are a number of
challenges Nigerians have
to face in order to succeed.

8. 1. Lack of steady power supply

9. This is arguably one of the biggest problems Nigerians have to deal with, and this situation appears to be
common in most African countries. While the government is capable of offering its citizens a steady and
efficient power supply, it doesn’t always do so. The big issue of corruption is the force behind the inability
of the past and current governments to offer residents stable electricity. With much of the money
allocated for power supply going into the pockets of a selected few, residents have to bear the burden.
To compensate for the lack of stable and efficient power supply, it’s often necessary for workers to use
generators to power their businesses and homes. These generators are not only expensive but consume
a large amount of fuel, which also happens to be an expensive commodity in Nigeria. With the
government being unable to invest in the development and maintenance of its four oil refineries, Nigeria
settles for exporting oil to countries with fully functional refineries. The disheartening thing is that the
refined oil is imported and sold back to Nigeria at a markup, resulting in high fuel prices. With stable
power not being a guarantee, any entrepreneur has to seek alternative means to power their business.
Generators and inverters are currently the options to choose from, with the former being the most
common.

10. 2. Credit facilities

11. The hardship and unemployment rate in Nigeria has spurred citizens to search for alternative means to
survive.
The younger generation has been able to re-educate themselves. They are capable of changing the
status quo, but one thing that is deterring them is lack of capital. One of the most important things a new
business needs is to have capital, and what is the best way to get cash if not to apply for credit?
The credit system in Nigeria has made it very difficult for individuals with ideas to kick-start their venture.
Those with a concept, the right tools, and the knowledge to efficiently create and manage businesses
often have to halt their vision because of lack of capital. The majority are trying to finance new companies
through bootstrapping because Nigeria is significantly underfunded, and the best way to source capital is
to make use of savings or ask for loans from friends and family. Surprisingly, the number of investments
into Nigerian startups increased to a total of $94.9 million going into 58 startups in 2018, according to
Disrupt Africa's Startup Report for 2018.

12. 3. Government policies

13. The general attitude of the Nigerian government towards the needs of entrepreneurs is quite appalling.
Founders that have managed to raise capital to start a company still experience certain setbacks. Most
founders have to wait for about 30 days before they are able to register their businesses with the
country's Corporate Affairs Commission (CAC). Everybody in the medical field seeking to register their
businesses with the country's food and drug law agency (NAFDAC) has to wait for over eight weeks –
about 60 days – before their application is reviewed and possibly approved. As a result, many become
discouraged and resort to finding employment in the meantime to ensure that they are able to take care
of their basic needs.
With every new government making huge adjustments to the laws made by the past government,
Nigerians suffer greatly. While most of the laws may favor them for a period of time, others may break
them entirely. Each new government may require businesses to carry out the same registration process
they already underwent a few years earlier.

14. 4. Poor management of cash

15. While the Nigerian government is to be blamed for the most part, business owners have created
challenges for themselves. Most people do not have any deeper motivation to venture into
entrepreneurship aside from the fact that they need the money and cannot find a suitable job for
themselves. This has led to the poor management of cash. Many entrepreneurs are simply inexperienced
and do not know how to efficiently manage their finances, and this takes a massive toll on their business
in the long run. Another poor management practice is having to make use of their business funds to pay
or offset personal bills that are not incurred while running or managing the business.

16. 5. Greed

17. This is not just a Nigerian thing. Many entrepreneurs have had to close down their businesses because of
the desire to make quick profits. Some, on the other hand, are victims of the activities of fraudulent
individuals who pose as business associates. Focusing on quickly increasing profits can lead to many
entrepreneurs losing their starting capital; thus, people close down their business.

18. How Nigeria is developing

19. Regardless of all these circumstances, the rise of the startup community in
Nigeria has already made a positive impact to its economic growth in the last
decade. According to the report published by SMEDAN in 2009, small and
medium-size businesses are the second-largest contributor to the country's
GDP with a whopping 37 percent. Going by this rate and the increase of new
businesses, that number would definitely have doubled or tripled in the last
10 years. Not surprisingly, the increasing number of these businesses
provides residents with more job opportunities than what multinationals have
been able to provide in the last decade.

20. Also, the recent economic recession in 2018 left a lasting impression in the
minds of many Nigerians. This has encouraged people to invest and buy in
Nigeria. However, top businessmen who have created empires for themselves
in the country and beyond are contributing only a minimum into the rescue of
the extremely poor society. The domestic market is filled with thousands of
business opportunities that could be explored and the younger generation is
open to buying Nigerian-made products, and this creates a large market.
When the responsible entrepreneurs start to make effective use of new
technologies to offer customers quality services, the profits they will reap can
contribute immensely to the national future economic growth.

21. Lagos, which is currently Nigeria’s most populated state as well as the largest
city with an estimated population of 21 million people, is coming into focus as
the economic tech hub. International investments continue to flow into the
urban center and evidence shows there are flourishing activities from venture
capitalists and angel investors going on. One startup believing in the
sustainable impact is Lagos-based Fintech company Mines IO. The company
uses AI and is helping banks, mobile operators, retailers and payment
processors to future-proof their business with digital credit products and data
monetization.

22. The entrepreneur community in Nigeria is growing as well. A yearly recurring
digital marketing event is the Social Media Week (SMW). Social Media Week
Lagos is a week-long conference that provides the ideas, trends, insights and
inspiration to help people and businesses understand how to achieve more in
a hyper-connected world. The event features a central stage for keynotes and
panels; multiple rooms for workshops, masterclasses and presentations; and
an area dedicated to co-working, networking and interactive installations.
SMW’s mission is to help people and organizations connect through
collaboration, learning and the sharing of ideas and information.
Entrepreneurship in Nigeria is just getting started and the world can be
excited to follow this nation, as well as other African countries, on their path
to economic and digital growth.

24. BREAKING THROUGH THE NOISE!