Have you ever wondered if the Nigerian dream could rival the opportunities abroad?
Should you Japa or stay in Nigeria as an entrepreneur?
Hi, I’m Simon Zaku, a proud Nigerian entrepreneur and digital marketer.
Having lived and built businesses in Nigeria, I’ve often been asked whether it’s worth staying abroad to pursue opportunities or returning home to make an impact.
Today, we’ll explore the pros and cons of being an entrepreneur in Nigeria versus staying abroad.
Using data, examples, and balanced perspectives, we’ll uncover the realities of both paths.
The Pros of Returning to Nigeria
1. Untapped Market Opportunities
Nigeria, with a population of over 220 million, is Africa’s largest economy.
According to Statista, the Nigerian startup ecosystem raised over $1.2 billion in funding in 2022, highlighting the growing interest in local innovation.
From fintech to agriculture and renewable energy, entrepreneurs returning home can capitalize on less saturated markets.
Example: Paystack, co-founded by Nigerians, thrived within Nigeria before being acquired by Stripe for $200 million.
2. Cultural Relevance and Local Insights
Entrepreneurs with firsthand knowledge of Nigerian culture and consumer behavior are better positioned to solve local problems.
For example, Flutterwave's success lies in its deep understanding of Africa’s fragmented payment systems.
3. Government Incentives and Support
Despite its challenges, the Nigerian government has introduced initiatives like the YouWin! Program and the Nigerian Startup Act to encourage entrepreneurship.
Additionally, diaspora-focused schemes such as the Nigerian Export Promotion Council help returning entrepreneurs access global markets.
4. Cost-Effective Business Operations
While initial setup can be challenging, labor and operational costs in Nigeria are often lower compared to Western countries.
Case in Point: Nollywood became a multi-billion-dollar industry because production costs in Nigeria are significantly cheaper than in Hollywood or Bollywood.
5. National Pride and Impact
Returning home offers a chance to contribute to nation-building, create jobs, and inspire others.
Entrepreneurs like Tony Elumelu (Heirs Holdings) have made significant impacts by fostering local talent and promoting African entrepreneurship.
The Challenges of Building a Business in Nigeria
1. Infrastructure Deficits
Nigeria faces power outages, poor road networks, and limited access to reliable internet.
According to the World Bank, over 85 million Nigerians lack electricity, posing significant challenges for businesses.
2. Regulatory and Bureaucratic Hurdles
Navigating Nigeria’s regulatory landscape can be daunting.
Issues such as multiple taxations, unclear business registration processes, and corruption are common complaints among entrepreneurs.
Example: Reports show that Nigeria ranks 131 out of 190 economies in the World Bank’s Ease of Doing Business Index (2020).
3. Insecurity
Kidnapping, banditry, and political instability can make certain regions less attractive for business.
Security concerns remain a major reason some entrepreneurs hesitate to return.
4. Access to Capital
While funding is improving, many entrepreneurs still find it difficult to secure investments or loans.
The average lending rate in Nigeria is 15%, one of the highest globally, which discourages startups from seeking financing locally.
5. Brain Drain and Talent Shortage
Ironically, the same brain drain that sends talented Nigerians abroad can create a talent shortage for returning entrepreneurs.
Finding skilled employees in certain sectors, especially tech, can be challenging.
The Pros of Staying Abroad
1. Stable Infrastructure
Countries like the U.S., U.K., or Canada offer entrepreneurs reliable power, internet, and transport systems, making business operations smoother.
2. Access to Global Markets
Entrepreneurs abroad benefit from proximity to investors, global customers, and partnerships.
Platforms like Kickstarter and Indiegogo often give startups based abroad more visibility and access to funding.
3. Higher Standard of Living
Many Nigerians abroad cite quality healthcare, education, and general living standards as significant advantages over life in Nigeria.
4. Innovation Hubs and Support Systems
Cities like Silicon Valley, London, or Toronto provide entrepreneurs with resources, accelerators, and a vibrant startup community, fostering innovation.
The Challenges of Staying Abroad
1. Saturated Markets
Competing in developed economies often means breaking into oversaturated markets with high barriers to entry.
2. Cultural Disconnect
Entrepreneurs abroad may lack the cultural insight to effectively target Nigerian or African markets.
Example: Diaspora brands like Jumia struggled initially to gain traction due to a lack of local trust and understanding of consumer behavior.
3. Limited Impact Back Home
Staying abroad might mean missing opportunities to contribute directly to Nigeria’s development or to tap into its emerging markets.
4. High Operational Costs
Labor, rent, and taxes abroad are significantly higher, cutting into profit margins.
Balancing Perspectives: Returning Home vs. Staying Abroad
Returning to Nigeria
Offers a sense of purpose and national pride.
Requires resilience to overcome systemic challenges.
Staying Abroad
Provides stability and access to global markets.
May limit direct impact on Nigeria’s growth.
Hybrid Models: Some entrepreneurs operate both in Nigeria and abroad, combining the best of both worlds.
Real-Life Examples
Adebayo Alonge: A Nigerian pharmacist who co-founded RxAll, an AI-powered drug verification platform.
Despite starting abroad, he returned to expand the venture in Africa, tackling counterfeit drugs.
Interswitch: Founded in Nigeria, the company expanded its operations abroad but remained rooted in solving African payment challenges.
Data-Driven Insights
The Nigerian diaspora contributes over $20 billion annually in remittances, indicating their economic power.
A report by the African Development Bank found that African entrepreneurs returning from the diaspora are 2.5 times more likely to succeed than local entrepreneurs due to exposure and resources gained abroad.
The Way Forward
Both paths have merit, but the decision ultimately depends on your goals, risk tolerance, and desire to impact Nigeria directly.
Ready to Make Your Decision?
Here’s how to get started:
1. Considering a business in Nigeria?
Join my free newsletter for actionable tips on navigating Nigeria’s entrepreneurial landscape.
2. Looking to balance both worlds?
Contact me for insights on hybrid business models.
Simon Taki Zaku, Founder, CEO, IbiFoundry.com.ng
What're your thoughts on Japa-ing? As for me, we remain here in Taraba, Nigeria :)