- Oct 19, 2016
Despite Nigeria’s recent economic woes now may be a good time to consider doing business in Nigeria. A currency that has lost half its value has brought unexpected benefits for business including cheaper production costs and a growing local market. The country is making significant efforts to tackle corruption under President Buhari and according to global benchmarks the environment for doing business is gradually improving.
Keys to Doing Business in Nigeria
Awareness of the cultural values and behaviours of those you wish to do business with is important anywhere. Nigeria has some unique cultural features which you should be responsive to ensure success in your business ventures. Read on to find out more including how to negotiate in Nigeria.
Sensitivity to the Nigerian Context
Whenever you are doing business in Nigeria it is important to remember that Nigeria is a country of wide diversity with regards to both language and ethnicity. More than 500 languages are spoken among 250 different cultural groups and many Nigerians speak several languages in addition to English. This also means that daily customs can differ significantly in various parts of Nigeria and being aware of them can help towards doing business successfully.
Three main regions and associated ethnic groups predominate the Nigerian cultural profile. In the north the Hausa/Fulani (29%) are the principal ethnic group, while the Yoruba (21%) can be found mainly in the south west and the Igbo (18%) in the south east. Roughly half of Nigeria’s population are Muslim while another 40% are Christian. It has been observed that Nigerian people are more likely to identify with their religion and ethnicity first and their nationality second.
Although women in Nigeria benefit from similar rights to men and are treated much the same in the workplace, be aware that in social situations men and women may be treated differently. Particularly in the north it is possible that women are not be directly greeted when someone enters a room, rather respect is shown through acknowledgement of male relatives. In certain situations it may also be advisable not to initiate contact with the opposite sex in greetings, such as the shaking of hands, but wait for the other party to initiate contact and smile and nod instead.
Bear in mind that many Nigerian businessmen and women may not necessarily have been exposed to the way business is conducted in other cultures and can expect business to be done in “their way”.
Doing business in Nigeria is fundamentally rooted in the building of long-term and trust-filled relationships and there is no short-cut through this process. Nigerians generally desire to do business with those they know, trust and like and can distrust those unwilling to make the effort to build relations. Therefore adopt a long-term perspective and be prepared to put the time in to developing key business relationships. Do not push for serious business discussions until your counterparts are comfortable with you.
Also note that business relationships here are perceived to exist between people and not necessarily among companies. This means that personal trust built up in you does not automatically transfer to trust in your company or other company representatives. Therefore it is of critical importance that company interfaces and team line-ups are left unchanged, as adjustments may entail starting the relationship-building process all over again.
Importance of Hierarchy & Respect
In Nigerian business culture hierarchy and respect for senior staff is deep-seated, reflecting wider cultural norms in which respect for elders and those with status and responsibility in society are esteemed. Be aware that hierarchical ways of working are deeply embedded. It is therefore not considered appropriate either in the workplace or outside to question or criticise superiors and those doing business with Nigerians should refrain from voicing open disapproval. This also means that when providing feedback, especially to senior staff, be careful not to offend with direct or harsh comments but rather be diplomatic, constructive and indirect. Expect that junior staff may sometimes be seen but not heard.
Be sure to always address and refer to individuals using their full and correct titles, as status is highly important in Nigerian society. In written communications enumerate the exact job title with any prefixes.
First impressions are crucial when doing business in Nigeria and will strongly influence the way prospective business partners respond to you. Nigerians are highly image conscious therefore wearing a dark, well-fitting business suit is recommended to make a good impression. Expect that national dress may be worn in business meetings and on Fridays.
Approach to Time
Anyone doing business in Nigeria will need to be conscious that a last minute approach and delays within both planning and implementation are commonplace, though not universal. Nigerian business culture often works to a different rhythm than Western, for example, with much more in-built flexibility in planning and an elastic approach to deadlines. It is therefore good practice to adopt clear milestones for different phases of longer projects, and be prepared for business meetings and appointments to begin behind schedule.
Communication and daily conversation in Nigeria can be a loud affair and greetings are polite, friendly and cheerful and are considered of high value. People in Nigeria are passionate and highly expressive, displaying their emotions openly. However speaking loudly with a serious expression does not necessarily imply that someone is angry, although conversely silence can signify displeasure. Never lose your patience or show anger, even when facing delays or unpunctuality, as this will be perceived to reflect badly on you. Communication can be straightforward and direct in Nigeria, especially among trusted business associates and friends, however people in Nigeria do not like to say no out of respect for the other person and requests and proposals may receive a “yes” when in fact it is “maybe”.
Nigerians also have a more informal concept of personal space and when conversing it is usual for Nigerian people to stand close to one another, sometimes closer than the personal comfort zones of foreign visitors. Resist the temptation to back away, as this could be taken as a sign of discomfort or uneasiness.
When making conversation safe topics include family and hometown, and showing interest in Nigerian culture can reap dividends in opening up pathways for conversation as Nigerians are usually happy to inform you and impart their stories. Family is important and finding out more about your counterpart’s family can also be a good way to begin forming relationships. Expect personal questions and be patient, allowing the other side to establish the pace.
Also be aware that the left hand in much of Nigerian and Muslim culture is considered unclean, therefore never shake hands with your left hand and always use your right hand to pass something to someone and to eat. Always cover your mouth when you yawn as not doing so is considered insulting.
Meetings & Business Cards
Meetings can frequently begin late although foreign visitors will be expected to arrive on time. It may be wise to schedule important meetings well in advance and to call the day before to confirm. When entering a meeting always be sure to greet everyone in the room and accompany introductions with a handshake. You will need to understand that it is acceptable in traditional Nigerian business culture that meetings may not always be private and can be interrupted, either by phone calls or personal visits, and patience is therefore needed.
Although business cards may not be given in return, always have to hand a good stock of your own to present to new contacts. Be sure to include clearly any professional titles and advanced degrees on the card. When presenting your business card, do so with your right hand, and only accept other cards with the same hand. Make eye contact and smile when exchanging cards and do not forget to examine the card and treat it with respect.
As building relationships are so central to doing business in Nigeria, expect that initial meetings will mainly focus on getting to know each other and do not push forward a particular agenda prematurely, although business can be discussed. Small talk may be extensive, and humour is valued if not cynical or sarcastic. Although meetings can be quite informal, it might be best to remain slightly more formal in early discussions.
When delivering presentations, attractiveness and clear, quality visuals are key. Wherever possible use visual aids such as pictures and diagrams and avoiding complicated expressions to ensure that your presentation is understood by all different language speakers.
Social engagement and entertainment are an essential part of doing business in Nigeria, given the importance of growing relationships and trust. Accept invitations, as many business transactions will continue in a more social atmosphere in a restaurant, in the host’s home or over drinks. Even if you are not thirsty or hungry do accept offers of hospitality as to refuse may be considered rude.
Closing the Deal
It is important to remember that although the building of relationships is vital, Nigerians generally expect that business deals and relationships will yield benefits in the short to medium term. When engaging in negotiations a cooperative style is generally adopted, however often Nigerians will favour a distributed bargaining approach, which may not necessarily lead to a win-win situation and where you may find inferior terms and conditions being offered. However do not express frustration or negative emotions as this may count against you.
Nigerian negotiating style is also highly non-linear, frequently adopting a holistic approach and moving back and forth among negotiating topics in a non-sequential manner. This reflects a wider polychronic and multi-tasking work style and could confuse representatives from more linear and monochronic cultures such as that of northern European countries and the United States.
Expect negotiations to be slow and extensive, as building relationships, gathering information, bargaining and decision-making are all processes which will take time. It may be that several trips will be needed to close the deal.
Techniques of Negotiation
Bargaining and haggling is deeply embedded in Nigerian culture so expect this to be a feature of any negotiations. When in business meetings, even at boardroom level, assume that you will be challenged, as bargaining is an acceptable and expected part of negotiations. Enter into the spirit of negotiations as many Nigerian businesspeople may be offended if you do not. The bargaining stage of any negotiations can be protracted and price movements can be extensive before final amounts are agreed.
A range of other techniques may commonly be used in negotiations:
- Techniques based on mild deception include the transmission of false non-verbal messages such as feigned disinterest, the misrepresentation of value and the making of false demands or concessions.
- Pressure techniques may be applied including displaying inflexibility or making final offers which may not, in fact, be final
- As in other relationship-based cultures emotional techniques can sometimes be employed in negotiations such as attempts to make counterparts feel guilty, attitudinal bargaining, or calling on personal relationships
Giving a discount is a traditional way of developing a business relationship in Nigeria and can be used in negotiations to “make you my customer”, as it is known locally.
Remember to always leave plenty of room for negotiation and concessions in any pricing proposed.
The leveraging of personal relationships could play an important role in resolving any disputes in negotiations.
Ensure you keep track at all times of negotiations as they progress.
Silence could be an effective tactic and is rarely used by Nigerian counterparts.
Do not bring a lawyer to the negotiating table as this could be misinterpreted as a sign of mistrust.
For more information on doing business in Nigeria go here