LATEST UPDATE: The Experiences Of A Foreigner Doing Business In Nigeria
Greetings Nairalanders,
Looking forward to be a valuable contributor in these forums.
I'm from Bangkok Thailand and our company has been doing business in Nigeria for almost 2 years.
We have a registered company in Nigeria as well as in Bangkok and Dubai.
My elder brother saw an opportunity in Nigeria and made up his mind that Nigeria indeed has a great many opportunities.
Needless to say, actually implementing the idea was not an easy task.
We faced so many great hurdles to make it here that we almost closed down our business at the end of first year for reasons I will further explain soon.
I will separate my post into 2 phases.
1) Our first & second business idea and how that failed (Rice, Clothing and imports)
2) our third business idea and how we made it. (Haulage)
I will start with the first phase
Our first business idea was importing Rice into Nigeria. Seeing that I am from Thailand and Nigerians love Thai rice it sounded like a valid business plan. So we went around Lagos searching for buyers. We came across several powerful women that trades in Rice. We saw these huge warehouses full of rice and many container of rice being offloaded into the warehouses. They were willing and enthusiastic to work with us if we could get them their price. Daily rice prices are fixed. So we made a connection with these powerful women.
Now our next goal was to find the rice at the right prices here in Thailand. But it does not end there. We had to register our rice with Nafdac (Nigerian agency for food and drug). And going to the process of Nafdac is amazingly time consuming and expensive. We hired a lawyer to help us speed the process.
We had also known that the import taxes on rice into Nigeria is 40%. Now here was the issue. We tried finding a source of rice at the right prices here in Thailand but it was not possible. The reason it was not possible was because the import taxes were too high and there was no way we could have made any money selling to the Nigerian Market. We wondered how did other people do it? We investigated. We went to the port and made some connections with some people there and found out that rice importers were not paying import taxes. They were paying money under-table. It is an acceptable practice. But we understood it was against the law and decided to drop the idea of importing rice as wanted to wholly abide by the country laws 100%. We could have made money with the right connections but decided not to go this route.
That is failure of our first business plan.
Our second business plan basically involved importing clothes worth around $2000-$4000. But we failed to sell enough in the market. Due to competition and lack of market research we failed.
After this we decided to try to import various stuff into Nigeria like Air conditioners and electronics. But we realized that the prices the buyers were asking were too low compared to what the factories were selling it for. Plus due to heavy competition, complexity in import/export process and direct easy access to factories itself via alibaba and websites; we as middlemen importers were not needed and even if we were our profit margins would be very little.
So we kissed our import dreams goodbye as well.
Almost 1 year in Nigeria had passed.
If there is one thing we learnt.....doing business in Nigeria was NOT easy.
If you are interested, I will next write the second phase of our story later and tell you how & why we succeeded and the extreme difficulties (To the point where we were about to lose most of our fortunes) we faced before we succeeded in our next venture. (Haulage)
My humblest regards.
Your Friend. from http://ift.tt/19pR9bQ
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