A recent survey focusing on the operational environment for European Union (EU) companies in Nigeria has identified the forex crisis, regulatory bottlenecks, power supply issues and many others as among challenges affecting businesses activities in the country.
The survey, conducted by Commercium Africa in cooperation with the European Business Chamber (EUROCHAM) Nigeria, also highlighted the complex landscape foreign companies must navigate in the country.
The top challenge identified by EU businesses is related to foreign exchange. The volatility of the Nigerian Naira and the challenges associated with accessing foreign currency create a host of problems for companies looking to engage in international trade or repatriate profits. This has been cited as the most critical issue impacting business operations in Nigeria.
Security concerns are the second most significant challenge, according to the survey of EU companies in Nigeria. The unpredictable security situation, which includes civil unrest, banditry, kidnapping and criminal activities, poses risks to personnel, operations, and investments, necessitating increased spending on security measures and sometimes leading to business disruptions.
Taxation issues are the third most pressing concern for EU businesses operating in Nigeria. The complexities and uncertainties surrounding the tax system, including handling multiple taxes and navigating regulatory changes, have created a cumbersome and often unpredictable environment for financial planning and compliance.
Nigeria’s infrastructure deficit is the fourth-ranked challenge. EU companies face difficulties due to inadequate transportation networks and other infrastructural shortcomings. This affects the movement of goods and services and has broader implications on the cost and ease of doing business.
Identified as the fifth most significant challenge, corruption continues to hinder the operational landscape for EU businesses in Nigeria. Practices such as bribery and extortion add an unwelcome layer of complexity and cost to everyday business dealings, undermining trust and increasing the risk factor associated with conducting business in the country.
Regulatory bottlenecks, which come in sixth place, are a significant impediment for EU companies in Nigeria. The complex and often time-consuming regulatory procedures slow down business operations and increase costs, reducing the overall efficiency and competitive edge of businesses trying to navigate the red tape.
Ranked seventh, Nigeria’s inconsistent and often unreliable power supply presents a notable challenge for EU businesses. Frequent power outages have led to alternative energy sources, increasing operational costs. This has affected overall productivity, compelling companies to seek costly backup solutions to maintain steady operations.
These challenges underscore the need for ongoing reforms in Nigeria’s business environment to improve foreign investors’ ease of doing business and bolster the country’s attractiveness as a destination for international trade and investment.
