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Doing business in Nigeria

by: Gert Jan van Reenen, Associate partner of Hofstede Insights
Three most important things for doing business in Nigeria, as in many African countries:

1. As a stranger, your good feeling might fail to distinguish ‘right from wrong’ as the signals may be different. Besides, be aware that though it seems you are dealing with an individual you are always dealing with a group. Therefore, make sure to get a good introduction (embassy, local or foreign person with good reputation, or someone related to the person where you want to be introduced). This is to facilitate getting access to the right person and to make sure you will be taken seriously.
2. Before engaging in business, it is very important to develop a relationship first. If you have the intention of  doing business right away you might be disappointed. In Nigeria patience is important. The principle of  ‘time-is-money’ is not the same as in most western countries. Take your time, never rush to get an assignment or contract. Being pushy to get your contract may result in failure or decrease of trust.
Please note that what seems to be a deal to you is not always a deal. It could be just a step in the process, an indication that more is needed. Things are renegotiable, even a written agreement. Mutual personal trust is more important. If, in your perception, the process gets stuck, don’t give up. It could just be a sign that more time is needed. What you thought may look like the reopening of the negotiation process, could be a signal that there isn’t yet sufficient trust; the fact that negotiations are still on is a signal that you are probably on the right track.
3. Always respect the hierarchy. The combination of high Power Distance and Masculinity implies that recognising and respecting someone’s status is of utmost importance. It is equally important to be aware of your own credentials, to make sure you are working at the ‘correct’ level.

What to look for in a good partner:

  • Is ‘well connected’ with governmental circles.
  • Is well informed about the political situation. After elections and change of government other people, at all levels, are in charge.
  • Make sure your partner has the ‘right’ status and position to have access to government and the top management of companies.
  • Is a good intermediate who is ready to be your contact and willing to do the ‘groundwork’, i.e. finding out whom to address where.
  • Has working and living experience abroad in Western countries and is used to a more direct way of communication.
  • Is able to ‘translate’ your needs and requirements.

Conduct meetings

From a western (low power distance) point of view, meetings in Nigeria are like ‘rituals’, to give a platform to the power holders to communicate what has already been decided. Most probably there has been bilateral consultations in advance to omit ‘bad surprises’ during the meeting that could threaten the in-group harmony, or be the cause of loss of face of the chairman or other participants. After the meeting, you can check informally whether or not the decision was approved. The collectivist culture of Nigeria requires that harmony should maintained.

Another way to omit surprises is to make as much information available as possible in advance, either on paper (agenda of what you would like to discuss), or through your local intermediary. Also, during meetings the exchange of ‘neutral’ information is OK as a way to get to know each other better.

Please note that, even if other employees are participating, your counterpart is in charge, being the highest in the organisation or at least during that meeting. Again, Nigeria has a hierarchical culture and this should be respected.

The fact that there will be more meetings is proof that you are making progress. As indicated earlier in this article, patience is important. Trying to push to get what you need may prove to be counterproductive.

Behaviour

You have to clearly understand people are part of networks of families, clans, etc. Also, government and politics are intertwined with business. Nigerians are very good in playing these networks, and as a European you are probably not. Have someone on the ground to help you “play this game”. Invest lots of time and energy in building relationships and always remain respectful to the Nigerians. Be aware there is no division between work-life and private-life. So be prepared to talk business at any time and any place. On the other hand, Nigerians like to enjoy life and having fun is important. Once you get closer, Nigerians will do their utmost to please their guests. A nice dinner, a nightclub, etc. is all part of the process of becoming closer. Be ready to be invited to dinner, be also ready to ‘fight’ over who will pay the bill when going out. Another option is take the initiative yourself, and to invite your host for a dinner. Then for sure you will be in a position to pay the bill.

Nigerians do business with you personally and not primarily with your organisation, so be prepared to share a lot of personal information. Questions about your family situation are a ‘normal’ topic for discussion and are meant to enhance harmony and familiarity between you and your host. The nature of this information is positive. For example: you don’t need to tell that your son is doing drugs; just skip this topic or it is absolutely acceptable to lie about it. As the nature of the contact with your host (organisation) is personal, be aware that sending your colleague for the next visit should be avoided. The consequence might be that your host is a) disappointed for having let him down and b) that your colleague will have to start all over again. If at all, you should take care of a transitional period, or at least a visit, where you and your colleague both participate, to smoothen the introduction of your colleague. Find a good excuse to explain this change as your host may consider the change as loss of face. Therefore, using a lie is an option.
 
Never let people “lose face” in group setting, for example, by criticising, rewarding or complimenting them openly. The main goal is to protect one’s position vis-à-vis one’s superiors and one’s in-group rather than goals accomplished.
Yet, sometimes Nigerians can be relatively direct, particularly when you are more familiar with each other. Or, when your behaviour in their eyes is unacceptable (be aware of sensitivities in connection with colonial past). In general, it is important to avoid being too explicit or direct.
 
Humour is allowed to keep things ‘light’. Be aware to use only ‘neutral’ or local jokes, not implying public and important people. Being too serious does not add to a good atmosphere.  Storytelling can be used as a way to convey the (tough) message without being too direct.
 
Bribing is part of the Nigerian culture. Depending on the nature of the support required, this could be something like a small gift (always consider to bring some nice gadgets from your country) up to a large amount of money. A small gift is no problem, of course; a big amount of money is. And if you represent your (western) government or international organisation, this is simply not an option. In case you do consider giving a bribe, you need other people to assist you (never do it yourself) who are more familiar with the system.  
 
Don’t be annoyed if your host is delayed for your appointment. In collectivist cultures time is not as important compared to individualist cultures. The reason for being delayed could be that other people (relatives in the broad sense) required time from your host; in collectivist culture like Nigeria this is considered more important than being on time. Yet, Nigerians do respect the need for punctuality of Westerners.
 
In general be aware of your own non-verbal behaviour. Try to be as neutral as possible as your behaviour may be interpreted differently. Some examples:
Thumps up is considered a rude gesture, an insult in Nigeria.

Keep emotions down, alway show that you are happy with a smile on your face. Don’t let yourself be misguided by the sometimes loud behaviour of Nigerians. In the eyes of the foreigner, Nigerians can seem very emotional people. Outbursts of emotional behaviour in public are common and perfectly acceptable. Shouting into mobile phones, as if someone is having an argument, are a common sight in the streets, Don’t be discouraged as this is quite normal. It’s probably just a friendly conversation.
 
Constant or direct eye contact is considered intrusive. Particularly in hierarchical situations, the subordinate persons is not supposed to look the superior straight into the eyes. Only at first introductions do eyes meet. Respect is demonstrated by lowering the eyes. You have to tune in your nonverbal antennae.
 
Nigerians stand a bit closer than most Europeans. Be aware of the handshake: formal, western way at first, developing towards a more complicated  handshake as a sign of friendship and familiarity. Talk about personal interests, but not about religion, politics, complaints, or ask about family lives or income.

Business Meals 

Nigerians very much like to enjoy life and therefore, business entertainment is important. A meal is a way to get closer to each other. Invitations can be extended from both sides. When you are invited by your host, accept this and see it as a sign that the relationship is developing. Especially so if you are invited to the home. If you want to entertain your hosts, make sure to do it generously, especially if you seriously consider engaging in business with them. Besides, this is a way to show you are a successful person. (Make sure you have sufficient cash with you as credit cards are not accepted everywhere.)
 
Please note that Nigeria is the highest alcohol drinking country in Africa, with high beer consumption. However, be aware that about half of the Nigerian population is Muslim; many Muslims do drink alcohol.

How to manage people and build trust

In a management or comparable position, towards junior staff you will behave as a “benevolent and strict father” (i.e. paternalistic attitude). As the most senior (considered) person, you are in control and you need to provide all the answers, even if you don’t know,  don’t say so. Just make up a kind of (vague) answer and say you will get back with the details.

The situation gets more complicated if you are a relatively young person representing your organisation or company. Your boss gave you a mandate to act on behalf of your organisation. Your Nigerian host (probably more senior age-wise) may consider you as a ‘junior’, not the correct level to do business with. Of course, it depends also on what you are offering. Legitimisation of your role and position might be necessary and should be provided by your bosses. Your bosses may consider to take the first steps in the process, i.e. to establish the relationship and let operational tasks being implemented by the ‘junior’ colleague. And for the ‘junior’ representative it would be wise to show respect for the ‘senior’ host. How? By sending him confidential notes (so that he can tune in or act as if it his idea), by flattery and by making sure to be indirect (in case of comments of negative feedback). Legitimation of your role and position by others (your intermediate, your embassy, etc.) might be helpful. However, always show respect for your more senior host.

Be especially careful with

  • Not respecting the authorities. Your entry into the country should be well prepared in terms of knowledge of the people and organisations you will depend upon. At the same time, always respect the hierarchy.
  • Being direct and addressing ‘wrong’ topics, i.e. religion, politics, the president (‘how come you have such an old guy as president?”), etc.
  • Bribing is everywhere (related to government and power) and you should be prepared for this. If you decide to bribe, ask an intermediary (who knows the rules of the game). If you don’t, be very patient in getting things done.

 

Short case study

An international team of consultants on behalf of a well-known international institution had to conduct a feasibility study for the design of a public utility organisation. There were two challenges:

We went to the airport to pick up a colleague from Denmark. She had been too busy to obtain her visa. In the context of Nigeria, this means trouble. After a long time waiting, we assumed she was still being held by the immigration authorities. We decided to find out and go, without any hindrance, through the passport control in reversed direction! We found our colleague arguing  in vain with the immigration official in charge. When a more experienced colleague took over, he approached the issue in a different way asking the official in charge if there could be ‘an arrangement’. A 20$ bill in the passport of the Danish lady solved the problem, at least temporarily. The Danish lady was admitted without visa. However, to leave the country one has to show a visa and a stamp. Hence, the same procedure had to be repeated, a 20$ bill in the passport. Who was wrong in the first place? The Danish lady. She, rather naively, or even arrogantly, assumed that she would be admitted being on a mission supported by an international organisation. In Nigeria, officials have to follow the rules, the Danish lady put the official in a difficult position. As the rules in Nigeria can be bent, the problem could be solved by giving a bribe.