Located in the occidental region of the Sahara, Nigeria is a culturally rich and diverse country that has grown into a dynamic global player. The uniqueness of the country is evidenced in its rich history; a civilization founded by tribes searching for trade, transformed into an African commercial point for Portugal, England, Netherlands and France and ultimately colonized under British rule as a protectorate. Nigeria, the most populous country in the continent, is rich in natural resources and ethnic diversity, represented by more than 250 groups. While Nigeria is today a democratic nation that welcomes western economic views and policies, its development has been constantly challenged by what is known as the “curse of oil,” a dependence on a high-value commodity that distorts healthy economic development. A succession of civil wars, political instability and civil unrest has undermined the promising growth potential of this rich land and people.

Business Etiquette

Greetings
In Nigeria, business introductions are warm, combining gracious handshakes with welcoming smiles. While shaking, men may place their left hand on the other person’s shoulder as an additional sign of courtesy. When people are frequent acquaintances, hugs and kisses may be appropriate but only when a close relationship has been established. It is important to remember that Nigeria is a diverse country with a community composed by observant Muslims and Christians, as well as many varied tribal groupings. If you are unaware of your counterpart´s beliefs, it is prudent to act conservatively. In this case, avoid shaking hands with women, unless the gesture has been started by them.

Business Meetings
First time meetings in Nigeria should be devoted to developing personal relationships and getting to know your counterparts. An attempt to rush into business topics will likely hamper the possibilities for success. Make sure to arrive on time even when your host might show up late or even reschedule. Do not use first names or nicknames until explicitly asked to do so, even if others are using them. Be also attentive to non-verbal cues and expect alternative communication styles, especially as people express themselves in their native languages where singing, gesturing and pointing may be used.

Meetings should be planned for well ahead of time, up to three months in advance if the topic is important and where your company has no local representation. Sending an agenda prior to the meeting is also important as it provides an opportunity to moderate the discussion. If you plan to close a commercial arrangement you should confirm the attendance of top management to your meeting.

Business Cards
Business cards are exchanged during introductions and always presented either with two hands or the right hand. Degrees and titles are important and therefore if you have a university degree or prominent position you should display it. Do not write on any business cards—including your own—and take some time to study its content before storing it in a business card holder.

Gift Giving
Gift giving is not expected when doing business, although small gifts such as stationary and office items can be appropriate. When invited to someone´s house or a birthday celebration, it is important to bring wrapped presents. Gifts like nuts, fruit and chocolate will be appreciated. Remember that using the left hand for gift giving is considered inappropriate as that hand is used for eating, passing food and objects.

Dinner and social events
During the early stages of business it is unusual for business entertaining to take place at a Nigerian home. If you are invited to someone’s house you should be respectful of the household’s norms, provide honest compliments about the house and avoid leaving too quickly after dinner. Most initial business entertaining will occur in the capital and other large cities such as Lagos, which provide a variety of options for hosting social gatherings. If invited to a public social event it is wise to consult with your hotel’s concierge or local peers for advice on appropriate evening attire: Nigerians tend to be formal and appreciate elegant taste. You should also remember that the cultural differences between the north and south present notable differences in terms of appropriateness of conversation topics. The role of women and alcohol consumption, for example, are more sensitive topics in the north of the country and should be avoided. In the south, on the other hand, the conversation style becomes informal in social events and body language plays an important role when conversing.

The Ethical Climate for Commerce

Ethical Challenges
Since independence from the British in 1960, Nigeria has experienced numerous political disruptions including military coups, civil war, ethnic violence and religious division. These crises have fostered several power shifts between military and civil forces. Most recently in 1999, the country came back under democratic civilian rule with election of President Olusegun Obasanjo. In his reelection in 2003, Obasanjo made the issue of corruption a national priority.

Much of Nigeria’s GDP is driven by exploitation of the country’s rich oil reserves, accounting for over 40 percent of its GDP. In sad irony, the prolific oil extraction that began in the late 1950s has been accompanied by growing poverty, with Nigeria ranking 158 out of the 177 poorest countries in the world, according to the 2006 UNDP Human Development Report. Other issues such as illiteracy, HIV/AIDS and elevated infant mortality mark Nigeria’s habitual struggle for human and economic development and cast shadows over many business dealings.

With regards to commercial policies and law enforcement, Nigeria has a reputation for general corruption and deceptive business practices that make it a complex place to operate for business newcomers as well as veterans. An underdeveloped judiciary system, weak political institutions and an inherited business culture are unavoidable challenges for maintaining ethical business practices. According to the World Bank, Nigeria ranks 118 out of 181 countries in terms of the ease of doing business, placing registering property, paying taxes and trading across borders as the most important challenges.

Despite the challenges, Nigeria has unquestioned business potential. Nigeria has a strong future as an energy provider. In addition, there are significant market opportunities to provide for its large population. An example of this is “Nollywood,” Nigeria’s self-named film industry that produces more movies than India’s Bollywood or Hollywood. Success requires well thought out strategies for coping with instability, exchange rate exposure, unequal income distribution and persistent ethical issues.

Five Compliance and Ethics Issues to Consider

Corruption
One of the key development problems in Nigeria is the issue of corruption. Ranked 121 out of 180 in the Transparency International corruption index, examples of corruption can be found across ethnic groups, religious faiths and political branches. People doing business in Nigeria recognize this endemic problem affects the capability of the country to generate real economic progress even with the newly established political stability.

Deal with it
Dealing with corruption in Nigeria is an unresolved issue that generates great frustration when explored by the international community. However, there are several initiatives, regulations and even industry driven agreements that have demonstrated a noticeable impact. The international oil industry, for instance, has in some instances turned to collective action and is slowly achieving some reduction in instances of bribery and fraud. President Obasnjo has also established a set of government initiatives to fight corruption including the creation of the Code of Conduct Bureau, the Public Complaints Commission, National Open Apprenticeship, the War Against Indiscipline Council and the Independent Corrupt Practices Commission. While the effectiveness of these institutions has yet to be demonstrated, they provide new support for businesses operating in Nigeria.

Oil and gas sector
The fact that the Nigerian economy is heavily dependent on the oil sector creates economic volatility that affects the entire country. The so called “oil curse” has fostered permanent conflict in the Niger Delta, which is the major source of petroleum, accounting for a staggering 95 percent of Nigeria’s export earnings according to the World Bank. The oil infrastructure has become a target by disgruntled citizens and is continuously attacked by criminal gangs that steal the oil for sale in the black market. The economic damage is accompanied by environmental harm as ruptured pipelines pollute soil and waterways.

Deal with it
Given the violence, scam, bribery and ecological concerns, doing business in Nigeria’s oil sector is not for amateurs, but the government is trying to bring greater stability. Key agencies, such as the National Oil and Gas Policy, created by the Federal Executive Council in 2007, have set their objectives for transforming the industry and international corporations have a stake in the success. Managers in this industry can report any instances of mismanagement to the National Petroleum Assets Management Agency (NAPAM). The media has also played a role in calling the public’s attention to the problems of corruption and can help strengthen public opinion in support of anti-corruption policy efforts.

Organized Crime
Nigerian OC, as organized crime is commonly called, involves a number of well organized drug traffickers and criminal cartels that take advantage of the country’s weak law enforcement to create complex international operations. Despite an often international reach, their participation in local commercial activities is frequent, given their need for money laundering and transportation of illegal goods.

Deal with it
Organized crime affects all people living and travelling to Nigeria and therefore the most basic advice is to prevent exposure to it. This begins with simple steps, like protecting visitors and employees by formally meeting them at the airport and guiding them to their respective final destinations. Likewise, constant attention to issues like money laundering is required and precautions must be taken. Cash transactions, for example, involve a risk of illicit uses and issues like these should be accounted for in all business dealings.

Social Abuses and Discrimination
It is not uncommon to find that private businesses in Nigeria discriminate on the basis of religion, ethnicity or gender. Persistent rivalries between Christians and Muslims as well as “indigenes” and “settlers” can lead to frequent conflicts. These confrontations can be violent, like a recent dispute over Islamic law that led to a street battle and more than 100 deaths. While not usually violent, there are a rising number of disputes over the participation of women in business. Middle and upper-management in Nigeria tends to be dominated by men.

Deal with it
The constitution and law provide for freedom of religion and the penal code establishes legal sanctions for violations. However, exceptions are made. In an effort to suppress violent conflict between rival factions, for example, the federal government has at times placed limits on religious activities and public celebrations. Given the social diversity it is prudent to be aware of different perceptions people in Nigeria can have. It is therefore recommendable to understand your client’s predispositions prior to a meeting. These predispositions can include, among other things, acceptable clothing, words to be used, days of the week and times to do business. Regarding the role of women in business, there are a number of government led initiatives that support the inclusion of women at work. Despite intentions, you may still find that female colleagues are not taken seriously when doing business with locals. If you run into this situation, try to deal with the circumstances in as tactful a manner as possible, recognizing that confrontation may antagonize an already difficult situation.

419 Scams
The 419 scams, originating in the 1980s, are a well established fraud often originating in Nigeria. The fraud begins with letters or emails claiming that someone in Nigeria, usually a bank or government employee, has discovered a huge amount of unclaimed funds or gold (often belonging to a deposed dictator or dead millionaire) and will share it with the email recipient if he helps recover the funds. The victim is asked to forward money to bribe an official to release the funds, or some other request for advance payment, which is kept by the con artist. While very few people respond to these scams, it is estimated that British citizens have lost £200 million to the con artists.

Deal with it
The 419 scams are named after the Nigerian penal code that criminalizes taking funds by the act of deception. Enforcing the laws has been difficult and the scams continue to proliferate. The lessons for businesses operating in Nigeria is the need to be vigilant about their business practices, ensuring that things like receipts are requested at all times and avoiding cash transactions unless unavoidable and only then with a prior certified agreement.