Most Nigerian entrepreneurs do not like to do anything with government. They fear the bureaucracy and the epidemic of corruption in the land. Yet, they want to run successful and growing companies. Unfortunately, they are wrong. It is very challenging to build a successful business in Nigeria while being agnostic of government. Government does not need to be your direct customer but you must build something that matters to the government.
Why? Our economy is still dominated by daily decisions of government. Unlike say U.S. where the government was shut down for many days, and things progressed as normal, Nigeria will not survive with government spending. From the herdsman to the banker, everyone is watching budget and subsequent release of government money into the economy, to provide liquidity and stimulate the economy. When government delays the release of many money, the nation goes into stasis – nothing happens.
If you are building a company and you think Abuja does not figure in the success, you need to quickly stop, and get a job – entrepreneurship is not for you. In short, when I see business plans without how government can be a customer, I tell the person to go back to the drawing board. In reality, the government should be the first customer, because that is where the money is. The private sector should come later.
But where you cannot work directly with government, it then means that you must work with anchor companies that deal directly with government. That means your solutions must be such that those companies can make use them, as they serve government. You cannot afford to begin a business in Nigeria without recognizing that our economy begins and ends in Abuja with the private sector simply cheering it. This truism applies to every sector including banking, insurance, oil and gas.
This is not to say our private sector is not making progress. I am saying that the biggest market segment is public sector at different levels – local, state and federal. If you lose that insight, it is very unlikely you can build products that will arrive at the right time when the markets need them. Growing and building a business largely in the private sector is possible, but that is very marginal and challenging. Your growth will take years and you will snail into it because as s startup, the biggest firms must have morphed the best customers.
Most banks have branches in some government offices whereas we have many local governments in Nigeria without a single bank branch. They do understand that the money is there and floats around government offices and buildings.
Where you cannot work directly with government at any level, and you cannot be a contractor to those dealing directly with government, you still need to study the government policy to understand its priorities. The aim is to see how what you are doing can be relevant to government since government writes the cheques and drives policies which seem to have immediate impacts across sectors in Nigeria.
Agriculture is hot now and anything on agriculture will find opportunities because the present federal government is doing all it can do to stimulate and grow the sector. If your interest is on building models for space exploration, good luck. Also, if government has decided it wants to import certain types of vaccines as a policy, and you go ahead to be planning to setup a plant in Nigeria, you may wait longer for your lucky day.
Government Service is the Secret
To serve government and grow your business, these are three things to consider:
- Make products and solutions government can be your direct customer
- Make products and solutions governments’ anchor contractors can sub-contract to you
- Follow government policies to make sure that your business priorities align to government interests. Because government has the money, that sector will have more opportunities than the ones it has no interest. Government runs on budgets and I hear people conceive ideas (nice ones indeed) in London and New York, and then working to impose them on Nigeria. They ask you for help on what they are doing. Most times, I remind them that Nigerian government does not have a row for that area in the budget. Simply, you cannot find relevance.
My Experience – A Case Study
During my NYSC, I made money in Jos, Plateau State, whee I served. I sold more than 500 computers and continued that business post-NYSC even when I had moved to Lagos. I had a simple secret, I read newspapers to get ideas when government would pay accumulated arrears to lecturers, across Nigeria. Quickly, with my team, we would visit them to help them buy computers. Every lecturer needed a PC and with the money in the bank, it was easy to close the deal. That was the time most people were getting their first computers and it was not yet a policy that their schools could buy computers for them.
From the Vice Chancellors to teaching assistants, I supplied computers. Within two weeks of the fund release, you will not see me anywhere because by then, they must have spent all the money, and there was no need of wasting time. You need to meet them within two days the money arrived. That model was used as I retained “staff” to pursue such opportunities across universities in Nigeria. The timing was important and understanding government policy that it was going to pay lecturers and following that on news was critical. By the end of my NYSC, I had money to buy a car and fund multiple post-graduate education. In short, I imported my Honda Accord (American edition) from Belgium. (Not really a small move people, to have spent that kind of money, on a car, in retrospect) . The first day I cared to check NYSC allowance was the day I closed the account where the money was going. Till today, reading and understanding governments remain the core of my business strategy.
Another example is the starting of Zenvus, a precision agriculture startup; I will explain in another post. The decision to start that company was finalized on May 28, 2015 because that was the day I read President Buhari’s draft inaugural speech. (I had arrived from U.S. to attend the Inaugural Ceremony). At the end, I made up my mind that agriculture would be huge, and quickly developed a plan to be in it, at the technology level.
We intend to attack the problem frontally through revival of agriculture, solid minerals mining as well as credits to small and medium size businesses to kick – start these enterprises. We shall quickly examine the best way to revive major industries and accelerate the revival and development of our railways, roads and general infrastructure
Notice that he listed Agriculture first in that speech. That was all I wanted to see. We went immediately to build solutions for Nigerian agriculture. Business is growing and we are doing well, to support excess of 2,700 jobs in Nigeria this year alone.
Image Credits – (BusinessDay, UN)