Lack Bank data, in 2009, the poorest half

Lack of Social
integration and support for entrepreneurs is one of the root causes of Startup
failure in Nigeria. Social integration structure allows all members to participate
in dialogue to get and keep peaceful social relationships. This is a vital part
of any organization to eliminate anarchy and great an enabling environment
where business success can thrive. When there are tribalism where people from
different tribe cannot relate and work as team, then work performance and
ethics will plunge. No business will grow when the team involve under look one
another (Abiodun, 2011)

The Nigerian
society has been reported by Oxfam publication of 17th may 2017 (54
page reports titled Inequality in Nigeria…) as highly unequal; that the gap
between the rich and the poor in Nigeria is very wide. According to the World
Bank data, in 2009, the poorest half of the population held only 22% of
national income (page9). Meanwhile, the richest Nigerian man will take 42 years
to spend all his wealth at one million per day (page4).

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Many startup
entrepreneurs I interviewed were people of the minority groups; poor, not able
to afford a very good education, not so social but with dreams and ideas that
could have changed the world. One of those young person is Eneh. A college
undergraduate of the Benue state University who founded a company known as
CareLine; a doorstep healthcare startup that wanted to cater for the elderly
and abandoned using donations from the upper class people. According to the 21
year old lady, more than 90% of her donations came from very poor locals who
had very little to give. The rich class refused to accept her idea and support
it simply because they felt she was an undergraduate studying in a public institution
therefore, she is classified a poor person. “They do a very quick rating on
your social economic background before they choose if to back up your idea or
not” says Adama Eneh of CareLine.

More than 75% of
our interviewee failed business executives lamented how lack of support helped
frustrate their startup. In Nigeria, parents generally expect their children to
only focus on their education and not try to explore their ideas. When such a
child is still dependent, they are abandoned by their relatives, parents most
especially. Government too have failed to help integrate young aspiring entrepreneurs
into the business forum. Incentives and supports are not available. Taxes and
levies are weighty on businesses. There are a lot of things government could put
in place in form of policies but little or no attention is given to Startup in
Nigeria.

2.2.7: FAILURE TO TACKLE INDIGENOUS CHALLENGES

Nigeria have several indigenous challenges and we are going
to dedicate this section to them. Limitations like diversity in language,
culture, religion, behavioral and tradition have not been very helpful in
making business startup strive. I witnessed how a certain Benin community (name
withheld) deliberately brought down an illustrious business because the company
failed to inscribe the ‘forgotten’ traditional name of one of their ancestors
on their signpost. That is both hilarious and ridiculous, it sounds barbaric
but that was how they wanted it.

Several businesses in Nigeria have suffered language
barrier and terminally failed. We have seen several cases where foreign expert
had to withdraw from the northern part of Nigeria for fear of the unknown. When
people do not understand themselves, they get worried about their true
intentions for one another. There are over 520 languages spoken in Nigeria ((Fida, 2008)the official
language, English was chosen to facilitate the cultural and linguistic unity of
the country. However, communication in English is much more popular in the
country’s urban communities than it is in the rural areas (Integrity, 2017)

Nigeria like other countries ha ve cultural, religious
and traditional differences too. These do not help businesses to grow. These
are barriers.

Terrible behavioral differences can be frustrating,
depending on the people. When a business man discuss his experience, he shares
different stories according to region. The people in the south west of Nigeria
tend to be friendlier than those in the north (Ozed, 2007)

INSECURITY is another indigenous threat to doing business in
Nigeria. The rise of the notorious terrorist sect; the Boko-Haram in the
north-east Nigeria have completely crumbled business activities in that region (Egbunne, 2016). The Niger delta
Avengers in the South-South Delta of Nigeria have been a serious challenge for
business activities, especially the oil industry. Several startup have either
packed up or are planning to do so as accounted by Mr. William McKee, Chairman
of an oil multinational company in the Gulf whose original intention to begin
refining in 2012 was blown away by militancy group. Mr. William recalls how two
of his Lebanese experts were abducted for 16 days and taken to an unknown
hideout. It had cost his parent company in the UAE several thousand dollars to
secure their release. The government of Nigeria claims to be on the fore front
of tackling insurgency but is the effect felt by the people?

 

2.2.8: CORPORATE INTERNAL FACTORS

Do entrepreneurs have their own problems? Yes they do.
These problems could also largely contribute to the reasons their businesses’
fail and here, we would elaborate those corporate errors that kill startups in
Nigeria.

Lancaster A. puts forth three summary points against
entrepreneurs

Over-Commitment/confidence

The Problem: Taking
on new endeavors and saying yes to new opportunities is tempting. But when the
entrepreneur start saying yes to too much, they get overextended. When they’re
too busy, their creative thinking—what they really need to build their
business—gets squelched. They become worn out and the overall quality of
everything they do suffer. They usually see themselves as capable of handling
everything simply because they conceived the business idea.

Ignoring
Boundaries and Checkers

The Problem: Entrepreneurs usually set some boundaries for themselves. For example, they could say,
‘everyone report directly to me’, or decide a complete work-free day each week
or shutting down the computer at a certain time. Well, then things get busy and
their own boundaries are much easier to compromise on than are their clients’ (Lancaster,
2011).
Entrepreneurs always feel like they can overrule the checkers or corporate
instructions because they are the boss. This have a way of messing things up
for the company. When rules are floored regularly, people get tired and make
others wear out too. As things compile, the entrepreneur becomes less active
and efficient. Most startup entrepreneurs consume themselves up by trying to
become a jack of all trade in a company.

Avoiding Networking

The Problem: Startup founders always feel very unsafe meeting new
people or seeking advice from their competitor. Instead, they normally feel
safe talking to the same people in their network. The need for reaching out to
others in business cannot be overemphasized. For the fear of leaking a trade
secret, entrepreneurs never feel comfortable with others that are not in their
network. This according to Barry Aikorin of PowerTel, a software company that
failed in 2013 in Lagos, is among some reasons he failed. If Barry had agreed
to talk to a competitor who had similar encounter five years before PowerTel
was founded, his company might have been savaged. The 30 year old executive
lamented not talking to his superiors.

Lack of
training

Most entrepreneurs in Nigeria just have nothing but a
passionate dream full of illustrative ideas that may not be very realistic in
practice. It is not enough to say that one will succeed simply by listening to
fine idea or pitches. That’s where the role of training and skill acquisition
apply.

2.2.9: CORRUPTION; BAD GOVERNANCE

Just like every other nation globally, corruption is a
significant obstacle to Startup in Nigeria: companies are very likely to
encounter bribery and other corrupt practices. Corruption risks are pervasive
throughout all institutions but the Business sector (especially oil sub sector)
is particularly corrupt. Corruption is criminalized primarily by the Criminal Code
and the Corrupt Practices and Other Related Offences Act. Accepting or
giving gifts as well as facilitation payments are illegal,
and individuals can be penalized with up to 7 years’ imprisonment. Despite a
strong legal framework, enforcement of anti-corruption legislation in Nigeria
remains weak: in practice, gifts, bribery and facilitation payments are the
norm (Integrity, 2017)

The following agencies and organs of government are
termed most corrupt organizations in Nigeria: