As America continues to globalize markets throughout developed and undeveloped countries of the world, more industries are looking to Nigeria for business investments and expansion. With a population of 150 million and rich with natural resources, Nigeria is a prime candidate for marketing and business opportunities. However, when developing an industry in a foreign nation, it is important to be aware of the disadvantages and advantages of entering this foreign market was well as the cultural dynamics of the region. Understanding the culture of the area and its relationship to business and economy is imperative when operating an industry, especially when emerging in a new market. Companies must research and have knowledge of the social and political environment before taking on such an endeavor. As a result, this research will provide information about Nigerian culture. Specifically this research will analyze Nigeria’s culture and social dimensions as express through, politics and government, religious affiliations and ideologies, educational system and pursuit of knowledge.
Nigeria is a country located on the western coast of Africa. The most densely populated country on the continent, with an abundance of natural resources, and coastal ports, Nigeria is prime candidate for international business opportunities. Abuja is the capitol of Nigeria with Lagos being the largest and most populated urban city in the country. Lagos is home to many of Nigeria’s government facilities and large businesses. Nigeria is a country rich in tradition and culture. Although Nigeria was once under British rule for more than a century, the nation has maintained its unique identity and is distinguishable from other countries across the continent. Understanding the current climate and environment of the country, analyzing and interpreting Nigeria’s cultural dimensions, and contrasting business success and opportunity to American corporations, industries and business investors can develop and implement a marketing and integration strategy that will aid the company reach business objectives. Geert Hofsted found Nigeria to be, “a short term orientation culture… exhibit[ing] great respect for traditions, a relatively small propensity to save, a strong social pressure to ‘keep up’, impatience for achieving quick results, and a strong concern with establishing the truth”.
A country whose economy is heavily invested in the oil industry and mining, Nigeria seeks additional economic growth to reboot its failing economy. “Crude oil accounted for over 95% of its exports and over 80% of government revenue in 2002 and the world’s sixth largest exporter of oil”, (“Encyclopedia of a Nation”, 2012). With the country heavily invested in petroleum, it has neglected the countries agricultural needs forcing families to grow food for self-consumption and selling the rest at local markets. Despite Nigeria’s opportunities and setbacks, the country has many similarities to the issues faced by America today. As a nation marred by, “political instability, poor infrastructure and corruption as well as an overdependence on the capital-intensive oil sector”, it may be difficult to recognize these similarities, (CIA World Factbook, 2012). However, both Nigeria and America faced an economic downturn the first part of this century due to
- poor management of industries, (i.e banking, auto, mortgage/ oil, agriculture)
- poor infrastructure; including the educational system and environment destruction
- political instability; infighting amongst the parties and ideals
According to the CIA World Fact book of 2012, Nigeria has been “righting its wrongs since 2008”. If Nigeria, an OPEC country located on a continent populated by Third World nations, can restructure and stabilize the country, then so can other countries and nations around the world. The current economic climate of America and Nigeria has forced both nations to consider alternatives to conserving and producing revenue domestically and internationally.
As a result, this research will recognize strengths, weaknesses, learning opportunities, and cultural dynamics between the two countries. Using the four required research questions as a foundation, the analysis research will provide:
- A comparative analysis of the business and environment of Nigeria and its internal ramifications.
- Cultural and religious concerns and challenges
- The importance and impact of trade between the U.S. and Nigeria.
To consider doing business in this region, businesses and companies should be aware of the cultural dynamics of the region. The fundamental cultural dimensions of this country that will be analyzed are:
Understanding these three dynamics is fundamental to framing the culture and business practices of Nigerians. These three cultural characteristics must be studied and analyzed in order to understand the opportunities as well as the disadvantages of doing business in Nigeria. Nigeria has been an area of interest for economic opportunities for centuries. Although other nations sought Nigeria for trade, many came to Nigeria to reap from the slave trade market during the 1600’s. However today, many businesses look to Nigeria for their abundance of natural resources and agricultural opportunities. “Results indicate that success of international business operating in Nigeria is positively related to their local cultural awareness and responsiveness”, (Akintunde, 2008, 11). Consequently, before doing business with any foreign nation it is imperative to understand the social and political environment to adequately and most successfully conduct business within the region.
Before British rule in the late 19th century, Nigeria was a nation of separate tribes, kingdoms, and villages independent of one another. More than 300 ethnic groups made up the area, each group with their own established customs, culture, language, and religion. British rule attempted to unify these various cultures. One such gesture was establishing English as the official language. However, this was to no avail as religious wars, violence against ethnic groups, and cultural clashes continued. Even after Nigeria gained independence from the British in 1960, war and battle against nations continued. Although the country was now independent, it struggled to establish a solid government until 1999 when a national constitution was created and implemented, (“CIA World Fact Book”, 2012). “Today, bloody confrontations between or among members of different ethnic groups continue”, and politics plays a large role in this, (“Countries & their Cultures”, 2012).
With Nigeria independent and under successful civilian rule for more than 10 years, the government has done things to appease ethnic groups and religious affiliations. Consequently, the government has established a, “mixed legal system of English common law, Islamic law, and traditional law”, (“Jamtan.com”, 2012). Compromising and integrating these three concepts into Nigerian policy and a way to appease citizens and ease conflict amongst ethnic groups, Christians and Muslims. It also indicates the steps government is taking to reduce violence and encourage coexistence without conflict. Yet, implementing these three forms of law into government and policy has done little to encourage harmony between groups and communities.
Nigeria, a democratic country, has a legislative, judicial, and executive branch, with the President acting as head of state and government. Like in America, Presidents are allowed to serve two terms and are voted through public election. However, despite this it is open knowledge that Nigerian politics and government is corrupted and manipulated. Military and police officials are also known to be corrupt and violent towards civilians. As a result, “politicians are not above facilitating and even exploiting Delta violence for their own, narrow interest”, (Campbell, 2011, xv).
“Years of political instability, regional strife, and the weakening influence of massive corruption have resulted in the country failing to capitalize on its many advantages, leaving the mass of the population in relative poverty as the country enormous infrastructure poor”, (Akintunde, 2008, 20). Consequently, businesses and investors across the globe are skeptical to encourage trade and international business opportunities in the region. With constant instability, violence, and despair dispersed throughout the country, businesses feel that despite the great opportunities of working with Nigeria, it may produce poor results due to corruption of government, poverty, and civil war.
Author, John Campbell in his book, Nigeria: Dancing on the Brink, stated that, “160 political assassinations and over 13,500 killings resulted from ethno-religious and inter-communal violence” between the years of 1999 and 2000. These numbers significantly demonstrate the religious violence and tension that plague this country. The CIA’s World Fact book indicates that Muslims make up 50% of the population, Christians 40%, and indigenous beliefs 10%. The clash of violence between these two religions occurred before British rule in the 1800’s. Nigerian Muslims and Christians fight over politics, law, and policy. Ethnic groups, Hausa and Fulani make up 29% of the Nigerian population who are known to be religiously affiliated as Muslim, (“Jamtan.com”, 2012). The Hausa and Fulani populate the northern region of the Country. In the North, alcohol is prohibited as well as other policies influenced by Muslim law.
Aside from Islamic Law being implemented in the northern region of the country, in other areas such as the Yorba in the Southwest, there is no prominent religious domination. There, law and policy is not influenced by religious associations and practices that can also be seen in Southeast Nigeria, where the Igbo people live who are of the majority, Christian. “The constitution also provides for freedom of religion, however, some states have restricted religious demonstrations, processions, or gatherings as a matter of public security”, (“Encyclopedia of the Nations”, 2012). The inconsistency of law, civil liberties, and civil rights has caused violence among Muslims and Christians. Although Nigerian law allows for religious freedom, in actuality religion is something that cannot be expressed openly for fear of violent attacks. As such, for companies to establish themselves, invest, or conduct business in Nigeria, they must be aware of religious grievances evident throughout the nation.
Nigeria is the most populated country of the African continent. It houses, a population of 170,123,740 people and 40.9% are 14 years of age or younger, (“Jamtan.com”, 2012). Thus, education is imperative for the country’s success. A country stricken by poverty and disease, Nigeria continues to struggle with diaspora on various levels. Today, 68% of Nigerians can read and write, (“CIA World Fact Book”, 2012). An explanation of this can be recognized in Nigeria’s cultural dynamics. Most Nigerian households are large families averaging 10 or more members. A poverty stricken nation, many families cannot afford to send all their children to school, often opting to send their male children, while older children must work.
“While Nigeria’s system of higher education is the largest in Africa, the demand for higher education far exceeds the capacity of the facilities”, (“Countries and their Cultures”, 2012). This same study found that 300,000 people applied to Nigerian universities however less than 50,000 were admitted. As a result, many either go without a higher education or leave the country to seek better educational opportunities. Optional destinations for Nigerian students are the United States and the United Kingdom. It is estimated that 28 Federal Universities, 28 State Universities, 32 Private Universities, and 125 technical colleges are in Nigeria, (“Universities in Nigeria”, 2012). However, this is not enough institutions to educate the 170 million people who live there.
With few educational opportunities and the countries lack of Human Rights and welfare initiatives, those who live in rural areas are ultimately forgotten. With 50% of the Nigerian population living outside of urban areas, their lack of education has produced a group that is outside the political boundary and subservient to the injustices and lack of equal opportunity. As such, business can benefit from this knowledge and use it as a tool for both marketing and business development strategy when conducting business in Nigeria. “Rural Nigerians tend to accept this noble-peasant system of politics where relative isolation from the rest of the country means that many do not even think of politics”, (“Countries and their Cultures”, 2012).
Local Integrations of Business
Due to the cultural dynamics of politics, religion, and lack of educational opportunities, local businesses and markets have conducted business in a manner that is related to and influenced by these social indicators. By understanding and analyzing these cultural characteristics, they can be integrated into business practices. This allows American companies to implement the best strategy of conducting business in this area. It can be noted that Nigeria, “a new economy based on raw materials, agricultural products and locally manufactured foods, saw the growth of a new class of Nigerian merchants, these merchants were heavily influenced by western ways”, (Countries and their Cultures, 2012). Knowing key information such as this will allow an industry to work with the current environment to maximize business objectives. Observing how Nigerians conduct business in their own country can shed light on business strategies, marketing tools utilized, and what Nigerian consumers want and need. Nigerian culture and social influences affect marketing management and strategy. As such, by studying how Nigerians conduct business with one another can help international business opportunist maximize in profitability and remain successful within the region.
Government and Political Integration
A government corrupted and mishandled, many politicians have worked in an effort to best maximize from the profits of the booming oil industry. As a result, the rest of the country has to suffer the consequences of poverty and an inadequate health care system. Jaco Maritz in his book, Nigeria Like It Is, state that “92% of the Nigerian population survive on less than $2 while 71% survive on less than $1 a day”. With resources and land tied into oil extraction and pulling natural resources, many Nigerians grow their own food and livestock for survival. Agriculture is not exported, however, remains within the country. Food is grown primarily for family consumption or to be sold at the local market.
“The boost in the agricultural export sector took a down turn and with the advent of democracy, massive imports of luxury goods began to dominate the economic scene. In essence, over the last15 years, that is, since 1986, when the Structural Adjustment Programme (SAP) came into being, the nation had witnessed a gross neglect of the food production sector”, (Okoneye, 2002, 1).
An example of this is also seen in the clothing industry. As the country continues to focus on the oil and mineral economy, it has lacked in other areas that has left Nigerians crippled of basic necessities for survival. However, politicians reap the most benefits from this, keeping most profits for themselves and putting little money back into the country and its infrastructure. This has resulted in poor transportation within urban areas, lack of adequate power grids for electricity needs, inadequate sewage and water systems, and a devastated health care system. Consequently, “sever poverty, human rights violation, and corruption are some of the major social ills, found in Nigeria”, (Hofstede, 2012).
Religion and Business
With Muslims and Christians dominating the Nigerian population, the country is split on religious ideals and perceptions. To promote and market themselves and encourage the economy, businesses throughout Nigeria have integrated their religious affiliation into their name and organization strategy. One such example can be seen in Jaiz Bank Plc., Nigeria’s first Islamic bank. Although this a Muslim bank, they encourage people of all religions inspiring diversity and coexistence. In the article provided by Vanguard News, “Islamic banking, also known as participant banking, is banking activity that is consistent with the principles of Islamic law and its practical application through the development of Islamic economics”.
To encourage business and investments, the bank offers interest free loans. This method allows everyone to take part of the opportunity despite their religious affiliation. It encourages and promotes both the individual and business investors to utilize their services. “The introduction of Islamic banking is part of a drive by the Central Bank of Nigeria, CBN, to propel Nigeria’s economy and promote financial inclusion by introducing alternative products”, (“vanguardngr.com”, 2012). As such, despite Nigeria’s conflict in religion, the nation is making steps towards unification and acceptance of diversity.
In addition, both Christians and Muslims are marketing their religion, turning God and Allah into big business opportunities. Large churches and temples have reach Nigerian shores, encouraging sinners to repent, worship, and join the various congregations found throughout the region. These churches seek membership as well as provide welfare services to the population. Maintaining its service to God and to help the people, Churches also work as a growing business. The more members of the church, the greater the profits generated from its members. Although Muslims have opened their first Islamic Bank, Christians too are capitalizing from their religion and stimulating the economy by encouraging mega churches and large congregations to generate income and profits.
Local Educational Integration
The lack of opportunity for Nigerians is known by many. As a result, investors have found an interest to encourage education and the economy. To capitalize on the broken educational system, private founders, funders, and investors have been licensed to open five new Universities in Nigeria, three of which are funded by Nigerian investors, (“Channels Television News”, 2012). The article found at Nigeria’s, Channels TV, indicates that government officials are aware they lack the necessities to take on the problem of poor and inadequate education. As such, they have granted new private schools to the country to ease the problem of limited education, without providing the funds to establish them. “The total number of universities (government owned and private) in the country to 122 and this number, the government claim is still not enough to address the challenge currently facing the nation’s tertiary education”, (“Channels Television News”, 2012).
Not only are Nigerians developing new Universities they are capitalizing on primary and secondary schools too. Private investors have also considered other avenues to gain profit from the limited educational system. Nigerian businesses also provide educational services including trade schools, tutoring services, and other educational programs to stimulate youth development. Culturally, Nigerians raise children collectively. Neighbors watch children while parents go to the market or take care of the garden. It is customary for children to be disciplined by strangers and everyone feels obligated to teach the child. This is still observed today as businesses have capitalized on the weak economy and poor educational system, by developing private education to stimulate knowledge and encourage the future generation of Nigeria.
Nigeria and America are fundamentally different in many ways. However, understanding these differences is essential to business success and opportunity in the country. Cultural differences, geography, and government are the root of the cultural clashes of Nigeria and America. Despite this there are similarities between the two countries that are parallel to one another. This can be seen in the cultural dimensions discussed and analyzed throughout this research, including politics, religion, and education. Although they are different due to the climate of American culture, there are just as many similarities as there are differences between America and Nigeria.
One such example is seen in the emergence of Nollywood, Nigerian movie productions. Nigeria has embraced the technology of the Western World, mainly the United States and has profited from the home video market. “The $500 million Nigerian movie business churns out more than a thousand titles a year on average, and trails only Hollywood and Bollywood in terms of revenues.” (Rice, 2012). Although, Nollywood boasts revenues lending itself to be included with the likes of Hollywood and Bollywood, Nollywood functions very closely to traditional Nigerian culture. Nigerians are predisposed to hardship and the acceptance without question of substandard conditions. Nollywood is no exception. According to http://www.thisisnollywood.com, “…Nollywood movies are made on shoe-string budgets of time and money. An average production takes just 10 days and costs approximately $15,000.” Thus, Nigeria holds steadfast to their basic psychology and culture. Although they have adapted western ideals Nigeria maintains its culture and tradition making Nigeria and America more similar than one would think.
In terms of politics, Nigeria and America are governed in a similar manner. Both countries are democratic nations with a president, congress, and branch of justice. This allows a balance of power between various parts of government. Also, it encourages self-policing and regulation of which is not available in Nigerian government. Although Nigeria has been independent from British rule since 1960’s, it has struggled to gain stability within the government as well as its citizens. America too started on a rocky foundation. In the 1800’s and into the next century, America had difficulties self-regulating it’s self. The government was corrupted as people in high positions often hired their friends into office or offered bribery in return for a vote, (Goldfield, et.atl, 2012, 673).
Democracy first adopted by Nigeria in October 1, 1960 with the installation of its first democratic leader Dr. Nnamdi Azikiwe. Interestingly enough, Nigeria rebuffed British democracy, however, adopted an American democratic society. “Nigeria, like the United States, is large, complex, heterogeneous; as one of Nigeria’s constitution-makers said simply, “What works for you may work for us”, (Herskovits & Winter, 1980). With respect to the fall of both Nigeria and the U.S, corruption resulting from greed is at the center of the deterioration of both economies. American economy is based on capitalism, which has made America the dominating and rich nation that it is today. However, being a capitalistic society, American industries are sharks when it comes to business and profits. Most businesses are willing to compromise for a profit; however profit is also the ultimate objective to remain a competitor. American companies are known to absorb smaller firms to remain ahead, (Wheeler, 2011).
As observed in Nigeria, America too has participated in bullying tactics to achieve a particular result. However, America is vastly different from Nigeria in that America has policies in place to combat corruption and manipulation. Although this system of self-regulation is not fined tuned, the country continues to take steps to better manage itself. This was seen in 2009 when the Obama administration encouraged banks and credit cards to omit fine print from contracts and unrealistic expectations from the consumer. The Obama administration’s regulatory reform, “is designed to ‘always consider costs and ways to reduce burdens for American businesses when developing rules; expand opportunities for public participation and public comment; and ensure that regulations are driven by real science”, (Doan, 2011). Law and policy have helped to combat business abuse and encourage fair treatment to citizens and consumers.
Nigeria is not the first country to profit from religion. Like Nigeria, America is home to mega churches and large temples. The larger the congregation the more profit that can be generated into the church. As a result, many American churches market themselves with billboards. Other business industries sale religious paraphernalia including Bibles, pens, books, DVD recordings, and posters to sale items and promote the religion. According to Churchfacts.com, there is an estimated, “335,000 religious congregations in the U.S, about 300,000 are Protestant and Christian denominations”.
As seen in Nigeria, America too has observed violent crimes of religious groups to encourage religious beliefs, practices, and ideologies. Larry Copeland is from USA Today and wrote an article called Domestic Terrorism. Copeland states that, “home grown terrorist have been steadily plotting and carrying out attacks in unrelated incidents across the nation”, these include religious groups and their affiliates. Catholic groups and other orthodox forms of Christianity have bombed various abortion clinics over the last several decades. This form of vigilantly violence is also seen in Nigerian cultures. Muslims and Christians commit acts of violence towards one another in attempt to force religion and ideas upon the other sector. Consequently, both Americans and Nigerians continue to face issues of secular violence of the name of religion.
While education structure in Nigeria is limited, American education is limitless. America is home to thousands of Colleges and Universities including trade schools, private, state, and secular institutions. The wide variety of academic study is also available, including all major studies and new and emerging academics. However, this does not mean that America’s educational system is not lacking in other areas. Currently, the cost for academic education in colleges and Universities are at an all-time high. Students are going into thousands of dollars of debt while that state struggles to maintain cost. This is also expressed in private Universities where the cost to study there is great.
This is different compared to Nigeria. Where there aren’t enough Universities for all students, many students are forced to go abroad to continue their education. Furthermore, Nigerian education is limited. “On the area of true academics, many students and parents are short-changed because their academic curriculum is largely faulty and shallow in content”, (Okahame, 2012). Ironically, although Nigeria is rich in the oil industry, this science is not available for study in Nigerian Universities.
America, Nigeria, and Business
“Nigeria, long seen by many investors as too politically risky and impoverished, is now seen as a potential diamond in the rough with debt to GBP ratio below many peers and a growing middle class”, (Ohuocha, 2011, 6). As the political climate in Nigeria has evolved and the country stabilized under a new presidency, investors are turning to Nigeria for business ventures. With a population of more than 150 million people, many companies are looking to globalize and expand in Nigeria. Other nations who have turned to Nigeria for business opportunities include China, India, the United Kingdom, and Germany, (Matriz, 2010). Currently businesses breaking ground on Nigerian soil include companies like Coca Cola, Guinness, and Nestle.
Understanding the cultural dynamics of Nigeria is fundamental to conducting business in this area. It can also, “help international business companies understand further the cultural needs values, and social responsibility”, (Kintunde, 2008, 4). The business is not only responsible for the economy but the society as well. The Islamic Bank is one such example of social changes businesses can make to improve the cultural acceptance. Considering the political and religious climate of the area, improving national identity and diversity can not only improve the social environment but improve business as well. So, when “doing business in Nigeria companies need to be aware of the issues that await them”, (Kintunde, 2008, 1).
Jaco Martiz indicates in his book the various factors to consider when doing business in Nigeria, this includes
He indicates that, “mines, factories, and agriculture lend political risk of utmost importance…such investments often lead to government expropriations, license cancellations, and contract reviews”. Due to the government being newly stabilized and still reorganizing its policy and international business and foreign affairs, some industries will find business development difficult. Furthermore, the nation continues combat against violence and corruption. This political instability and the government’s reluctance to self-regulate, many companies are reluctant to invest in this region.
Despite these factors, Akanuma in his essay, Challenges for Marketing in Nigeria, indicates that, “five years of democracy and political stability has led to increased level of ‘Business Confidence’ in Nigeria”. His study indicates that Nigeria’s Foreign Direct Investment has steadily increased. This was especially seen in the area of telecommunications, which through marketing and development has fundamentally changed the market and how individuals communicate and conduct business. Furthermore, “Nigeria’s GDP per capita has been increasing steadily to $1,118 in 2009 from $208 in the mid 1990’s, placing it almost with India”, (Ohuocha, 2011, 8). With a foreign direct investment rise of 5.5% last year and a 10% economic growth in the past decade, Nigeria is of interest to international investors. This significant increase in the Nigerian economy has developed an emerging middle class. As more businesses go to Nigeria for expansions, markets are egger to enter this arena before their competitors.
Akanuma recognizes policy deregulation as a growing opportunity for international businesses to invest in the region. Under a corrupt nation, many companies and businesses operated in a monopoly that was assisted by government policy. However, as the country continued to stabilize under a new leader and work on government corruption and social reform, “regulation barriers, which protected old monopolies are crumbling, new entrepreneurial players are entering the old protected industries, fundamentally changing the rules of the game”, (Akanuma, 2004). This has caused new firms to capitalize on this and enter an open market. As a result, “we are witnessing the entry of new firms into Nigeria completely in existing industries and sometimes opening up new industry niches and categories”, (Okechuku & Onyemah, 1999, 2).
“For the U.S… newly opened markets around the world create new opportunities for economic growth”, (Maceus, 2012). As a result, both countries benefit. American companies will increase revenue and the country of service will generate an economic boost. Many industries and companies look to expand their product overseas to provide goods and services and increase revenue. Furthermore, in some cases business save money and cost as well as build a relationship of international trade and foreign affairs. For a developing country such as Nigeria, it could help provide the country the necessities it needs for growth and success. A country that is stricken by poverty and disease, it is strongly dependent upon imported goods. “Nigeria is a large scale importer, depending on other countries for things such as machinery, chemicals, transportation equipment, manufactured goods, food, and livestock”, (Okechuku & Onyemah, 1999, 4).
Introducing Nigeria to the goods and services offered in America would be good for the social environment for the country if implemented correctly and sensitive to these needs. However, this is easier said than done. In a country where majority of the citizens live below poverty line, it may be difficult for some Nigerians to afford simple items that are taken for granted by most Americans. With many industries already expanding in Nigeria and other companies following behind them, this may stimulate business opportunities and provide employment for the unemployed. However, only time will tell. Investing in Nigeria can have a positive effect on the country. “The economic domino effect of globalization have strengthened the economies of poor nations, decreased poverty levels, increased attention to environmental concerns, and led to more frequent intervention in national-level human rights abuses”, (Maceus, 2012). In conclusion, new entrants have a unique and difficult responsibility to encourage competitive competition to their advantage, remain sensitive to the political environment, and emphasize a marketing strategy unique to the culture and American business entering Nigeria will be successful.
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