Against the urgent need to deepen the Federal Government’s economic agenda – financial inclusion, job and wealth creation and fiscal growth, the critical role played by family businesses as the heartbeat of Nigeria’s economy has once again been spotlighted and thrust into sharp focus.
Africa’s leading digital financial services provider, Moniepoint Inc has released its latest case study – How families power Nigeria’s economy, a reflective chronicle of how the legacy of family businesses, from centennial conglomerates to bustling local eateries, are a living narrative and solid testament to Nigeria’s entrepreneurial spirit.
It will be recalled that Dr Jumoke Oduwole, the special adviser to the President on Presidential Enabling Business Environment Council (PEBEC) and Investment, recently revealed that there are approximately 23.8 million family businesses, responsible for millions of jobs, dispersed throughout the country and collectively they contribute around $200 billion annually into the nation’s economy.
Closely aligned to this disclosure is the oft-stated data that with over 40 million micro, small and medium enterprises (MSMEs) contributing nearly 50% of the national GDP; accounting for over 84% of total employment as well as 96% of businesses in Nigeria. These figures reflect the glaring significance and the impact that family businesses have on Nigeria’s economy.
According to the Moniepoint study, which provides deep insights into what has kept these businesses going across generations, how they navigate challenges, and opportunities for growth and innovation, more than half of Nigerian family businesses don’t have strong digital capabilities with very few seeing it as a priority area.
The lack of clear governance and business management structures, as well as poor succession planning are some of the challenges that undermine the scalability of family businesses in Nigeria.
Key drivers that undergird a lot of these enterprises include, strong cash flow with a view to ensuring that they remain profitable, high levels of trust driven by shared vision and business objectives and cohesive cultural bonds where one out of every two Nigerian businesses bear the distinction of being a family business.
Furthermore, the study avers that the story of Nigerian family businesses is one of resilience, adaptation, and enduring legacy. It posits furthermore that the future of Nigerian family businesses is bright with potential even as more enterprises embrace the tools and strategies for success in a digital age, supported by innovative driven solution partners.
It contends that as they evolve, family businesses will remain at the heart of Nigeria’s economic and cultural identity, powering the nation’s economy and shaping its future for future generations while ushering in a new era of growth, sustainability, and global competitiveness.
Speaking to the rationale behind this latest study, Edidiong Didi Uwemakpan, vice president, Communications and Public Relations, Moniepoint Inc, noted that the decision to focus on family businesses was driven by their significant contributions to Nigeria’s economy despite their varying sizes and sectors.
“At Moniepoint, we pride ourselves on being more than just a financial services provider; we are an astute partner to business owners, helping them to be financially happy while ensuring that our innovative solutions power the dreams of these enterprises. We believe that the growth of family businesses directly supports the entire economy, which in turn essentially extends our ability to positively impact everyone else which aligns with our brand’s mission,” she said.
Stating Moniepoint’s commitment to helping these businesses embrace digitization;
“Our services have helped several family-owned businesses improve their operations through simplified payment collection, cash flow management, and access to capital. Our recent partnership with the CAC will further catalyze technology adoption for these businesses while providing a foundation for them to adopt better record keeping, financial reporting and governance practices which are pivotal for their efficiency, productivity and long-term viability, and also drive market access and trade facilitation into regional and global value chains for them.”
In 2023, Moniepoint MFB, was honored with the prestigious Rising Star Family Business Award in recognition of the giant strides made by the firm over the years and their contribution to the Nigerian economy at the Businessday, My Family My Business, and PwC Nigeria Family Business Summit.
To download or learn more about the case study, visit here.
