THE MOST TYPICAL MISTAKE WHEN STARTING OUT IN NIGERIA

TYPICAL APPROACH OF A SPANISH COMPANY TO ENTER NIGERIA

Contact with a Nigerian resident in Spain who convinces the company to try Nigeria based on the fabulous contacts he has and the amount of easy business waiting in Nigeria for European companies that understand the Nigerian system, i.e. commissions.

2. The company takes advantage of a commercial mission of the Chamber of Commerce to know the country…(3,000 euros) In this mission they meet Nigerian businessmen who show their interest in partnering with them and also tell them that their product is fantastic and that it would be a bomb in Nigeria, however the commercial does not get to close any contract, as these companies will introduce them to potential customers on the next trip.

3. Next trip, …6,000 euros including per diem for the sales manager. The Nigerian contact introduces several contacts who say they have an acquaintance who wants to give a contract from X government. But for this there are some expenses to be met beforehand to ensure that the governor will receive them …. 4,000 euros.

4. The commercial director returns to Spain and convinces the company of the need to make these payments and follow the contacts’ route because we are talking about contracts of several million euros with a 30% advanced payment.

5. In the best case scenario, the commercial director will make 4 trips at 6,000 euros per trip to receive a letter of award of a contract in which a series of points are required to formalize the agreement.

6. The terms of the contract require
To create the company….4.000 euros
To create a bank account and to designate the proxies, as the Spaniard does not have a residence permit he cannot appear as proxy so the Nigerian partner remains as proxy promising to regularize as soon as the permit is ready (6 months minimum…)…10.000 euros
To provide a surety insurance to be able to collect the advanced payment, that through an acquaintance a company will prepare in spite of not having any assets, in Nigeria everything is possible with money, the Nigerian partner will tell you …. 10.000 euros
Pay a commission to the official of the ministry or local government to turn a blind eye and expedite the agrrement and the advanced payment…10.000 euros.

7. Two options remain for the final step
a. That everything is false and everyone disappears and if the Spanish complains, he is kidnapped.
b. That it is true and as the account holders are Nigerians, they do with the money what they want and if the Spaniard complains, he is kidnapped.

That Spaniard will return to Spain saying that Nigeria (after a year trying to establish himself and with 80.000€ thrown away) is a nest of corruption and that it is impossible to do business there. And he will make it even more difficult for the Spanish companies that are there working honestly because the Nigerians will think that all Spaniards are the same ….IMBÉCILES!!!!

Original source: “The most typical mistake when starting out in Nigeria“, by Alfredo García.

Photograph: Harmattan, Mosque in Abuja by Kipp Jones.