Customs and no political support (BTI, 2016). The

Customs Administration

There
is a significant risk of corruption in Nigeria’s customs sector. Bribery is
common among Nigeria’s customs and port authorities just like every other
country, and smuggled goods regularly enter seaports and cross borders. Customs
processes are handled exclusively by the Nigerian Customs Service (NCS) and the
Nigerian Ports Authority (NPA). Corruption in the custom service ranges
from unlawful disruption of procedure for obtaining licenses to import and
export to clearing of goods in the port. The Nigerian customs also allow the
smuggling of contraband goods through the land borders. This affect local manufacturing
and minority companies in a great way.  Corruption
in the Nigerian customs Service have resulted in the closure of over 500,000
startups since its inception (Akabueze, 2002)

 

Public Procurement

Corruption
is common in Nigeria’s public procurement sector, with up to one-third of
companies expecting to give gifts or payments to secure a government contract (ES, 2014). Companies report
that irregular payments are very common in public procurement procedures (GCR, 2015-2016). The diversion of
public funds to well-connected firms and individuals as well as favoritism in
decisions of government officials is widespread (GCR, 2015-2016). Difficulties in obtaining payments for
projects has rendered companies reluctant to bid on public contracts (ICS, 2016) (Ayozie, 2010).

Politicians
have hijacked public procurement. As reported by strive Masiyiwa of Econet in
the introductory story we find out that corruption has greatly affected the
peace and progress of Nigeria’s businesses. Almost all companies complained
that they were faced with harassment by public officers who demand for illegal
payments to secure what they already qualify for by law (AYOZIE, 2006)

Legislation

Nigeria
has a well-developed anti-corruption legal framework, but enforcement is
very weak. It has been estimated that corruption could cost Nigeria up to
37% of its GDP by 2030 if corruption is not dealt with (PCW, 2017) TheCriminal
Code criminalizes corruption and the abuse of office, and the Corrupt
Practices and Other Related Offences Actcriminalizes active and passive
bribery, as well as attempted corruption, fraud, extortion and money
laundering. The institutions established to combat corruption, namely the independent
Corrupt Practices Commission(ICPC) andEconomic and Financial Crimes Commission (EFCC),
have proved ineffective in curbing corruption, owing to incompetent leadership,
insufficient funds, a lack of capacity, and no political support (BTI, 2016). The EFCC has proved
itself to be incapable of diligent prosecution, often by not providing
substantial evidence for charges or making mistakes allowing the defendants to be
acquitted on technicalities (mondaq, 2016).

Civil Society

Freedom
of expression is protected by the Constitutionbut is not always respected
in practice; courts do not always judge fairly in cases involving journalists (FotP, 2016). Journalists
occasionally face interference from public officials, especially when
reporting on high-level corruption (FotP, 2016).
Government officials do not always provide information to the press that they
are legally bound to disclose (FitW, 2016)
Journalists and reporters continue to suffer from intimidation and harassment (FotP, 2016). Small-scale
bribes and gifts to journalists are very common, but journalists themselves do
not consider them a problem (FotP, 2016),
which calls their independence into question. Nevertheless, the media
landscape is described as one of the most vibrant and diverse on the African
continent (FotP, 2016).
The press is considered ‘partly free’ (FotP, 2016).

It
has been a known fact that the civil society in Nigeria is weak, fractionalized
and lacks pro-activeness even with private sector support in recent times, the
result is not yet felt. Labor unions; the autonomous Nigerian Labour Congress
(NLC) and her subsidiaries suffer similar limitations. Private media and
religious groups have increasingly taken on the tasks of civil society (BTI, 2016).

2.2.10: THE STRONGHOLD OF EASE OF DOING BUSINESS IN
NIGERIA AS A ROOT CAUSE FOR STARTUP FAILURE

From the report table below, we observe that Nigeria
still score very low marks in 2017 in all the areas reviewed. Nigeria scores
130 out of 145 nations when talking about starting a business; our topic in
focus. Which means getting registration, permits, electricity, credits, and
protection is very challenging. The Nigerian government have failed to make
necessary laws to encourage startup founding. Existing startups are not
protected from foreign investments that are way stronger than them. Minority
companies are generally at risk of failure (world, 2017)

In conclusion, it is still very difficult doing
business in 2017, then let’s think of how difficult it was in 2003 when the
Econet wireless company failed. It was 10 times difficult (AYOZIE, 2006).

By this literary review, a number of root causes of
startup failure in Nigeria have been identified. They are number one, Lack of
sufficient preparation and prospecting which focused on the rough and quick
estimates that the entrepreneurs make before starting a business. Secondly,
Breakdown in the nation’s Infrastructure have not helped businesses over time.
Poorly constructed roads and absence of roads and rail system in many semi
urban and rural areas frustrate logistics and transportation. Epileptic power
supply is a significant routine in Nigeria and government have not done
anything about it even when the significance of adequate power supply in
Business cannot be overemphasized. Thirdly, we talked about how much requisite
labour is unavailable in Nigeria and its effect. The Econet group had to fly in
about 200 foreign experts in 2003. Nigeria have not made any investment in
training and formal education. We also looked at the effect of insufficient
financing in Startup. How the Econet group gave out 95% shares to 22 other
investors to secure their license and how it backfired. Poor social integration
and support which is also related to problems tagged Indigenous challenges were
two other factors we looked at. These have to do with traditional, social,
behavioral and cultural practices that hinders and kill startup in Nigeria.
Language barrier is one of those prominent challenge. When people do not
understand themselves and yet have individual interest there is going to be a
problem all the time. Corporate internal factors; how the startup entrepreneurs
behave also affect their business. Most entrepreneurs are geeky and over
ambitious. They always want things done in a preferred way that may not be very
realistic on the long run. Corruption has been elaborately labelled a key cause
of startup failure in Nigeria. Government officials and their agencies are full
of bribe takers. The various areas government agencies and parastatals exhibit
corruption have been discussed. And finally, Nigeria ranks 130 out of 145
countries reviewed by the World Bank in the getting a business registered
index, this is a major concern. Generally, businesses are just trying to
survive in Nigeria. Government have a lot to do to help progress the nation’s
index on the global ratings