A tweet by the founder of Iroko TV, Jason Njoku has sparked an online debate on the ease of doing business in Nigeria.
“There are emerging markets. Then there is Africa. And within Africa there is this place called Nigeria. And she is very very very different. To anywhere. Her people are different. Their ways are different. Shine your eyes or they will turn your $, hopes and dreams to ashes” Njoku tweeted at 5.26 AM on 27 February.
As at 2.00 PM on 28 February, the tweet had been retweeted 197 times and attracted more than 244 likes. It had also attracted 30 comments many of which criticised Njoku for seemingly running down the country’s business environment.
Kadaria Ahmed, former editor of the Next Newspapers tweeting under the handle @KadariaAhmed was one of the first to respond.
“Strange tweet. Thought you, Iroko and now Rok are doing particularly well. Did something go wrong? Are there lessons that others can learn? Please do a full thread for context and to educate us. It could prove useful to many” she tweeted.
But @eLDeeTheDon also tweeting a reply to Jason Njoku agreed with Njoku.
“A lot of folks commenting are being understandably defensive but Nigeria is a truly unique place. Normal business rules do NOT apply. Sadly and with a very heavy heart, I have to agree with Jason’s point here. If you don’t shine ya (your) eye, you will lose your $.”
However, there were those that felt that Njoku’s tweet could undermine those doing business in Nigeria.
Chioma Peace tweeting with the handle @jozinnachioma tweeted a reply “Jason, I think you are amazing. I honor you and the work you do. I understand that you have had some trying experiences that were hurtful and I truly sympathize. But don’t you think that your statement undermines the work of other amazing people who are truly passionate about business in this economy?”
Another tweeter user was even more critical. Tweeting with the handle @IamMrFestus, he tweeted “This is not funny. You used to preach about coming to Nigeria with 0$, are you so full now that you want to ruin other people’s chances? If you traded with $5, earned $10 and lost $4. You are still a winner with $6 and a lot of experiences.”
Many of the tweets felt Njoku was being too critical of the Nigerian environment while some pointed out the success stories recorded by other entrepreneurs in the country despite an apparently difficult operating environment.
Some also demanded that Jason does a blog post on what may have inspired his tweet, so that other entrepreneurs could learn from his experience.
However, a post on Online writing platform “Medium” by Njoku could explain some of his challenges with doing business in the country which may have informed his tweet. In the medium post, he wrote;
“A few weeks back Oo told me that Nigerian startup founders (including myself) lacked ambition. That they think once they get to N50m per year in revenue we have ‘made it’ so then relax. That in SF, people think about world domination, then spend whatever it takes to get there.”
“I smiled. Do you know how hard it is to generate N50m per year in revenue in Nigeria? In a word. Brutal. Like really really brutal. Generating revenue in Nigeria is like breaking rocks and then bleeding them. For consumer internet companies, it is something akin to the perfect storm.
“Customers do not want to pay and will frustrate you for every Naira you earn. Even when you verify a lead and send to a business customer and have a contract saying you they are obligated to pay a commission. They still frustrate the hell out of you. The difficulty in getting paid in Nigeria has to be a silent killer of companies.
“It is one of the most frustrating things about operating in Nigeria. It is a cultural thing not something fintech can solve.”
“When people tell me about a lack of ambition in startup founders, I look at my surroundings and realise that Nigerian companies who operate within Nigeria are ultimately grounded by their surroundings. And guess what people, sorry to tell you, but to create a N50m per year revenue business is really really really hard.”
“The Spark 2.0 model is to fund N5–20m investments in companies who are looking not to raise further capital, but who are focused on building a company which sees the N50m per year milestone as a possibility with that capital.”
“I sit in Nigerian entertainment. Arguably, as a collective, significantly more mass market, dynamic and revenue generating industry than consumer internet is today. Our top 10 production studio partners easily generate N100m/year (at least 50% from IROKO alone).”
“But this is in a 20 year industry which is very mainstream with many structured (albeit immature) revenue opportunities. IROKO acquires content from easily 100+ production houses per year.”
“Of GTBank’s 350,000 business customers, 300,000 or 86% fall within the
“This is the reality of Nigeria. Yes, there are 180m people. But we are not a ‘rich’ nation. The last few years have seen the middle classes completely hollowed out. So a prime market, it is not. The companies created here are not actually that big (compared to SA it’s comical).”
“FirstRand (market cap $19.8B) / Standard Bank ($17.2B) / NedBank ($8B). Let’s see; GTBank ($2.1B), Zenith ($1.47B) and FBN Holdings/FirstBank ($350m). I would argue that NedBank, the third largest bank in SA, is probably the size (market cap) of the entire banking industry in Nigeria.”
“So, who cares? And why does this matter in the wider scheme of things for consumer internet in Nigeria? In my simple opinion, because of the structure of Nigeria and her peoples and her companies and her cultures and the relevant size of the companies around her, the ambitions need to be realistic.”
Do you agree with Jason…
See his full medium post here
https://jason.com.ng/why-n50m-is-a-big-deal-ac7448c5417c
