Business

Nigeria: 4 tips for developing a business there

Romain Poirot-Lellig, French entrepreneur and founder of the Kwik app, set up shop in 2018 in Lagos, the economic capital of Nigeria. A country and a land of opportunities, provided he is patient in his prospecting efforts.

Employment solutions in Nigeria: Nigeria PEO

A young population growing at a rapid pace, an economic growth of nearly 2.6% by 2023 according to the IMF, a rising middle class: this is what pushed Romain Poirot-Lellig, founder of the company Africa Delivery Technologies, to set up in Nigeria in August 2018, and to launch his app Kwik in June 2019, which connects independent delivery drivers, owners of their vehicles, with customers wishing to have small packages or documents delivered. In just over six months, the 15-employee company has successfully established itself in the local market. It makes 2,000 deliveries a month and expects to generate 500,000 euros in business by 2020. 

A promising start that required a long process.

1. Anticipate administrative formalities

Living in Nigeria is often a big challenge for expatriates. Obtaining a visa can be difficult and is only valid for 90 days from the date of issue, with the need to leave the country every 30 days. It is therefore advisable to apply for a residence permit from the first stay. “Naturally, there is a very strict procedure for obtaining residency status. It is therefore necessary, even before setting up in the country, to start the procedures with a law firm established in the country, taking care to create and file the articles of association of the company beforehand, because it is the company that must apply for the residence permit for an expatriate”, warns Romain Poirot-Lellig. To save time, the entrepreneur must also make sure that the lawyer registers the company with the tax authorities and the relevant administrations, for example Customs if products are imported, in addition to the registration in the commercial register itself. This can take up to three to four months.

2. Be transparent with investors

As the country may face security, demographic and economic challenges, bankers, especially French ones, may be wary. It is therefore essential to reassure them. The more the entrepreneur proves that he or she has mastered the cultural codes, that he or she has tested his or her idea on the ground, and that he or she has already established contacts in the country, the more likely it is that he or she will obtain the support of financial partners. “You have to be aware that it is not easy. An entrepreneur who has created a company with its head office in France and an operational subsidiary in Nigeria will also find it easier to attract European investment funds,” says Romain Poirot-Lellig. A statutory auditor will have to certify the company’s accounts and reinforce the credibility of the project in terms of governance, transparency and strict compliance with accounting standards. “It is essential to reassure the shareholders about the control of the sources of income of your activity on the spot”, adds the forty-one year old entrepreneur. You should not underestimate the cash flow to be mobilized. Payment deadlines and transfers to Nigeria are subject to frequent controls and take longer to process than Sepa transfers.

3. Surround yourself with local contacts

By exchanging with counterparts already established in the country, it is easier to identify the rules governing the local market and the pitfalls to avoid. As soon as he arrived, Romain Poirot-Lellig contacted the Lagos Accueil association. “This allowed me to meet French people living in Lagos, the economic capital of the country, Nigerians and, one thing leading to another, to make friends with very important people, some of whom have become partners of my company,” confides the manager. He appointed Olatowun Candide-Johnson, the former General Counsel of Total in Nigeria, as Chairman of his Board of Directors, and got to know a leading figure such as Haresh Keswani, the owner of the SPAR franchise in Nigeria. “He is now my mentor. I am fortunate to have him advise me on how to develop my business, how to roll out my business, how to manage relationships with different levels of Nigerian society,” he says.

4. Understanding the market Of the country’s 220 million people, the middle class, which earns an average of €1,000 per month, represents at least 10 million inhabitants. “There is a huge amount of resources in the middle and upper middle class. It’s a very connected, cultured, well-traveled, and above all demanding population. The local elites are consumerist, Americanized and love innovation and novelty,” explains Romain Poirot-Lellig. So we have to adapt and offer products that meet the needs of local customers.

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