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Family-owned businesses face obstacles

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By Mercy Kelani

Over half of family businesses in Nigeria are lacking in strong digital skills.

According to research conducted by Moniepoint, half of the businesses in Nigeria are owned and operated by families. On March 20, 2024, a newly published report highlighted the obstacles that family businesses in the country are grappling with, such as the absence of proper governance structure and succession planning. The fintech firm reported that family-owned businesses were expected to thrive in the future owing to the strong determination of their owners. According to the firm’s statement, over half of family businesses in Nigeria are lacking in strong digital skills, with only a small number considering it important.

Issues like unclear governance, ineffective business management, and inadequate succession planning are hindering the growth potential of family businesses in Nigeria. Many Nigerian businesses are founded on strong financial stability, building trust through common goals and values, and maintaining strong family ties within the company. These key factors drive the success of these enterprises and help them stay profitable in the long run. In addition, the research suggests that Nigerian family businesses have a history marked by resilience, adaptability, and long-lasting impact.

These businesses play a crucial role in creating jobs.

It also predicts a promising outlook for the future of these businesses as they increasingly adopt modern tools and tactics for achieving success in the digital era, with the help of innovative solution providers. Family businesses are seen as the cornerstone of Nigeria’s economic and cultural identity, driving the country’s economy and influencing its future. They are expected to lead Nigeria into a new era of growth, sustainability, and international competitiveness, ensuring prosperity for generations to come.

Dr. Jumoke Oduwole, the Special Adviser to the President on Presidential Enabling Business Environment Council and Investment, revealed that Nigeria has a staggering 23.8 million family-owned businesses. These businesses play a crucial role in creating jobs, with millions of people employed by them, and together they contribute an impressive $200 billion to the nation’s economy every year. SMEs are responsible for the creation of 60 to 70 percent of jobs in the majority of OECD member nations, as stated by the Organization for Economic Co-operation and Development.

Moniepoint serves as a strategic ally to business owners.

More so, according to data from the National Bureau of Statistics, small and medium-sized enterprises in Nigeria play a significant role in the economy, accounting for 48% of the GDP and creating 84% of the total jobs in the country. In explaining the motivation for this new study, Edidiong Uwemakpan, the Vice President of Communications and Public Relations at Moniepoint Inc, highlighted the importance of family businesses in Nigeria’s economy. She emphasized that these businesses, regardless of their size or sector, play a crucial role in driving economic growth.

Also, Moniepoint sets itself apart as more than a typical financial services provider – it serves as a strategic ally to business owners, guiding them towards financial success and fueling the growth of their dreams with their cutting-edge solutions. She explained that by supporting the growth of family businesses, they are contributing to the overall economy and furthering their ability to have a positive impact on others, in line with the brand’s mission. Moniepoint is dedicated to assisting small businesses transition to digital processes.

Related Article: Challenges Confronting Businesses in 2024

The company’s services have been instrumental in enhancing the efficiency of numerous family-run businesses by streamlining payment collection, managing cash flow, and providing access to funding opportunities. Their new collaboration with the CAC aims to accelerate the integration of technology within these businesses. Additionally, it will assist in establishing a strong base for improving record-keeping, financial reporting, and governance practices. These improvements are essential for enhancing efficiency, productivity, and ensuring long-term sustainability. Furthermore, this partnership will help enhance market opportunities and streamline trade processes for these businesses within regional and global value chains.

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