Asher's Blog

Running a business in Nigeria can make you feel unusually intelligent in the morning and completely foolish by evening.

You can wake up to a market opportunity that appears almost impossible to ignore: more than 200 million people, an energetic young population, major unsolved problems and customers who adopt useful products with remarkable speed. By the end of the same day, a policy announcement, a currency movement, a power failure or a breakdown in some basic infrastructure can invalidate assumptions you spent months developing.

That contradiction is central to the experience of building here. Nigeria can reward speed, courage and creativity, but it also punishes shallow assumptions. It is full of opportunity, but the opportunity is rarely as straightforward as the headline population suggests.

I have experienced both sides of it. I have seen Nigerian customers respond enthusiastically to a product they value. I have benefited from the generosity of other founders and from a financial ecosystem capable of moving money with impressive speed. I have also watched macroeconomic changes dramatically reduce the dollar value of revenue we had worked very hard to earn.

This is not an argument for or against building in Nigeria. It is an attempt to describe the market honestly—the good, the bad and the parts that can become genuinely ugly.

The ugly: a large population is not the same as a large addressable market

The first trap is confusing population with purchasing power. Nigeria is Africa’s most populous country, and the World Bank’s latest data estimate its 2025 population at approximately 237.5 million. That number appears in almost every investment deck because it creates an immediate sense of scale. But population tells you how many people exist; it does not tell you how many people can afford your product, how frequently they can buy it or how much of their income is already committed to essentials.

The World Bank estimated Nigeria’s GDP per person at roughly $1,224 in 2025. Its Nigeria Development Updates have also continued to emphasise that inflation and the cost of food have weakened household purchasing power even while macroeconomic reforms have begun to improve some headline indicators. The World Bank’s Nigeria data show the scale alongside the income constraint.

This creates one of the ugliest surprises for entrepreneurs. You may build a projection around a tiny percentage of the national population and still discover that the genuinely addressable market is smaller than you assumed. Ten million people may need what you offer, but perhaps only one million can presently afford it. Of that one million, only a fraction may trust a new company, have access to your distribution channel and consider the problem urgent enough to pay for now.

This is why “Nigeria has over 200 million people” is not a market-sizing exercise.

A useful market definition must include ability and willingness to pay. It must account for income distribution, geography, trust, device quality, data costs, language, payment behaviour and the alternatives customers already use including informal alternatives that may appear inefficient but are familiar and free.

The lesson for me has been to build from observed behaviour rather than demographic excitement. Clayton Christensen’s Competing Against Luck expresses the underlying idea well: customers do not merely buy products; they “hire” them to perform a job in their lives. Harvard Business School summarises Christensen’s Jobs to Be Done theory here. Who has already paid? What urgent job were they hiring the product to do? How much did they pay? How often do they return? What portion of apparently interested customers disappears when the price becomes real? How many people are buying because of a temporary discount rather than because the product has become essential?

Nigeria offers scale, but you must earn the right to claim it one paying customer at a time.

The ugly: macroeconomic volatility can rewrite your business overnight

The second ugly reality is volatility, particularly currency volatility. One of the hardest periods in my own experience came after a major shift in government policy and the foreign-exchange regime. The naira weakened severely. In local currency, the business was still operating and customers were still paying us, but the dollar value of what we had built collapsed. Our dollar-equivalent annual revenue, which had approached $1 million, fell over the subsequent period to roughly $300,000.

It was painful because it exposed an assumption we had not realised we were making: that earning more Naira would continue to translate into building roughly the same amount of dollar value.

We had considered downside scenarios before allocating capital, but we had not imagined the downside would become that extreme. A plan can be conservative by yesterday’s standards and still be dangerously optimistic about tomorrow.

Currency shocks do more than alter how foreign investors view revenue. They increase the naira cost of cloud services, imported equipment, software subscriptions and other expenses priced in foreign currency. They affect employee expectations because people are also trying to protect their living standards. They change the price of capital and can make an apparently growing company poorer in real terms.

The reforms that began in 2023 were intended to unify Nigeria’s exchange-rate system and address long-standing distortions. They also produced a severe near-term adjustment for households and businesses. The World Bank reported stronger economic growth in the first half of 2025, but it simultaneously stressed that high food inflation and weak living standards remained urgent problems. Both things can be true: a reform can improve the structure of an economy while creating brutal operating consequences during the transition. The World Bank’s 2025 Nigeria Development Update describes that tension.

That experience changed how I think about capital allocation. I now pay closer attention to the currency in which revenue is earned, the currency in which costs are incurred, how long capital is committed and what happens if a policy change creates a scenario beyond the historical range in our spreadsheet.

If you build in Nigeria, resilience cannot be a motivational word. It must appear in treasury policy, pricing, contracts, liquidity reserves and the timing of investment decisions.

The bad: policy can move faster than your ability to adapt

All businesses are affected by government policy, and large businesses everywhere engage government. The United States has a formal lobbying industry. The European Union has structured channels for interest representation and public consultation. Companies need to explain how proposed rules will affect customers, employment, investment and competition.

Nigeria is no different in principle, but the practical consequences of distance from policymakers can be greater when consultation is inconsistent and policy changes arrive quickly.

Businesses and industry associations should participate in policy formation lawfully and transparently. The goal should be to help government understand the market, improve the quality of regulation and protect the public interest, not to obtain a private rule that weakens competitors or disadvantages customers.

For a founder, however, the broader lesson is that regulatory awareness cannot begin after a circular has been published. You need relationships with credible industry groups, advisers and regulators before a crisis. You need someone responsible for monitoring policy. You need to understand not only the current rule but also the direction in which regulation is moving.

This is especially important in financial services, healthcare, transportation, telecommunications and other industries in which a regulatory decision can affect the legality or economics of an entire product.

In a stable market, regulation can feel like a boundary around the business. In a volatile market, it can become one of the variables inside the business model.

The bad: you must build some of the infrastructure you expected to use

Another difficult part of building in Nigeria is the absence or inconsistency of basic infrastructure.

Businesses routinely carry costs that would be shared infrastructure elsewhere. Companies generate their own electricity, maintain backup internet connections, solve transportation problems, secure facilities and build operational redundancies because the public or commercial layer beneath them cannot always be trusted.

If you operate in logistics, poor road conditions and congestion affect delivery times, fuel consumption, maintenance expenses and the number of orders a vehicle can complete in a day. A delivery promise that looks sensible on a map may be impossible on the road.

If you build a digital product, Nigeria offers a very large base of mobile and internet users, but subscription counts do not guarantee a stable customer experience. World Bank data estimate that 41 percent of Nigerians used the internet in 2024, while access to electricity stood at 62.5 percent. Even those national averages conceal wide differences in reliability and affordability. Coverage quality, device limitations, data costs and power supply still vary enormously. A product designed on fast office Wi-Fi and tested on an expensive phone may fail in the hands of the customer it was intended to serve.

This changes product design. Applications must be lighter. Failed transactions need graceful recovery. Customers must understand what is happening when a network drops. Important actions may require offline or delayed-sync alternatives. Support teams need tools that distinguish user error from network or banking failure.

Infrastructure is not merely an operations issue. It shapes product strategy, unit economics and customer trust.

The bad: local capital often prices the risk and misses the possibility

Raising capital locally can also be difficult, particularly for technology companies whose value depends on future scale rather than current physical assets or distributable profit.

My own decision was not to focus on raising our early institutional capital in Nigeria because I expected the company to be priced too cheaply. There are sophisticated Nigerian investors who understand venture risk, long development cycles and the economics of technology, but the pool is still relatively small compared with the size and ambition of the entrepreneurial market.

Many local investors understandably prefer businesses they can value through assets, immediate cash flow or familiar industry multiples. They are also investing in an environment with high interest rates, currency risk and attractive yields on government securities. A startup must therefore compete not only with other startups for capital, but also with lower-complexity investments offering substantial nominal returns.

The result is that founders may receive an offer that recognises the present risk but assigns very little value to the future possibility. This can produce excessive dilution long before the company has had a fair opportunity to demonstrate what it can become.

Foreign capital is not automatically better. It introduces its own expectations, currency complications, governance requirements and changing appetite for emerging markets. The wiser lesson is to understand what kind of capital the business requires, what the investor understands and what assumptions are embedded in the valuation.

Cheap capital can be expensive when it comes from the wrong partner. Expensive capital can be destructive when the business model cannot generate a sufficient return.

The ugly: weak credit infrastructure shrinks the entire economy around you

Nigeria’s weak consumer and small-business credit system affects far more than lending companies.

When households cannot reliably borrow against future income, they can purchase only from cash already available. When small businesses cannot access appropriately priced working capital, they cannot hold enough inventory, invest ahead of demand or survive a temporary interruption. Suppliers shorten payment terms because they do not trust counterparties. Landlords request large advance payments; businesses preserve cash rather than invest it.

All of this reduces purchasing power and slows commercial activity. Credit is not simply the availability of loans. A healthy credit system requires reliable identity, usable credit histories, enforceable contracts, responsible underwriting, fair pricing, consumer protection and lenders willing to serve more than the safest or wealthiest customers. Nigeria has made progress through bank verification, credit bureaus, digital lending and open-banking initiatives, but access to affordable, long-duration formal credit remains shallow relative to the need.

This is one reason the apparent market and the addressable market can be so different. A customer may have the income to afford a product over twelve months but lack any safe mechanism to spread the payment. A sound product can remain inaccessible because the financial infrastructure around the customer is incomplete.

The good: Nigeria is an extraordinary place to learn and experiment

For all these difficulties, Nigeria is one of the most interesting places in the world in which to build.

I sometimes think of it as a kind of San Francisco for experimentation—not because the infrastructure or capital markets are the same, but because the density of problems creates constant opportunities for new approaches. Payments, logistics, energy, healthcare, education, identity, compliance, commerce and savings all contain friction that a thoughtful entrepreneur can address.

You can test ideas quickly because customers are actively searching for better ways to get things done. Nigerians are already improvising around broken systems; a founder who turns one of those improvised solutions into a reliable product can create significant value.

But experimentation must be diligent and responsible. A lighter or evolving regulatory environment is not permission to expose customers to harm. This is particularly important when dealing with people’s money, health, identity or employment. The best founders use the room to innovate while building as though stricter, sensible regulation will eventually arrive.

The advantage is not that there are no rules. The advantage is that, in some sectors, there is still room to help define what good should look like.

The Good: Nigerian creativity is an economic capability

Nigeria’s creativity is not only visible in startups; it is embedded in the culture.

You see it in how quickly people adapt language, technology and business models to local reality. You see it in fashion, comedy, film and music. Nollywood is routinely recognised as one of the world’s most prolific film industries by production volume, while Afrobeats has become a major global cultural export.

Claims that Nigerian music is the “second biggest industry in the world” are difficult to support, but the underlying momentum is real. IFPI reported that Sub-Saharan Africa was the world’s fastest-growing recorded-music region in 2022, expanding by 34.7 percent, with growth led substantially by South Africa and a rapidly expanding West African music ecosystem. IFPI’s Global Music Report documents that growth.

The more important business lesson is not the ranking. It is what Nigerian creators have demonstrated about distribution, identity and global relevance. They did not wait for the domestic environment to become perfect. They combined local authenticity with global platforms, cultivated devoted audiences and made the world learn their language.

That same quality appears in Nigerian entrepreneurs. The market forces creativity because copying a model from London, New York or San Francisco without modification rarely works. Pricing must be reconsidered. Distribution must be reinvented. Trust must be built differently. Products often need to serve customers across formal and informal systems at the same time.

To build here, you must be willing to be visible. You have to speak about the product, sell repeatedly and overcome the fear of appearing too eager. In a noisy and highly competitive market, quiet excellence may remain undiscovered. The product must be good, but people must also know that it exists.

When Nigerians like and trust a product, the response can be powerful. Communities talk. Recommendations travel. A strong brand can create loyalty that no advertising budget can purchase directly. Low purchasing power does not mean people have no standards; it means the product must prove that it deserves a place among many urgent demands on their money.

The Good: The founder community can be remarkably generous

Nigeria’s communal culture also shapes the experience of entrepreneurship. Building a company can be lonely, but it becomes less lonely when you deliberately form relationships with other founders. People share introductions, warn one another about mistakes, recommend employees, explain regulatory experiences and make themselves available during difficult periods. Some of the most valuable support does not appear on a cap table. It comes through a phone call from someone who has already survived the problem you are facing.

This support is not automatic, and the ecosystem contains competition and mistrust like every other market. But founders who contribute honestly to the community can find a network with a genuine willingness to help.

In a volatile environment, relationships become a form of infrastructure. They do not replace competence or contracts, but they help information, trust and opportunity move more quickly.

The Good: Nigeria’s payments system is better than many outsiders expect

One of Nigeria’s strongest pieces of commercial infrastructure is its payments system. Domestic bank transfers are commonly completed in seconds, at all hours, and customers have come to expect near-instant confirmation. That expectation has created its own operational pressure—when a payment is delayed, even briefly, trust can disappear quickly—but it is also a significant foundation for digital commerce.

The Nigerian Inter-Bank Settlement System and the Central Bank helped build instant-payment rails long before real-time payments became normal in several larger economies. Fintech companies and banks have then built consumer experiences on top of those rails. Cross-border transactions still face documentation, liquidity and foreign-exchange constraints, but legitimate transfers through banking and payment partners can also move far more quickly than many people assume.

The system is not perfect. Fraud, reversals, failed transactions and reconciliation gaps remain important problems. Yet Nigeria’s payments capability demonstrates what becomes possible when regulation, infrastructure and entrepreneurial energy reinforce one another.

It is a reminder that the Nigerian business story is not simply one of dysfunction. There are areas in which the country has built sophisticated systems and trained customers to expect speed.

What Nigeria demands from a founder

Nigeria demands toughness, but toughness alone is not enough. It demands imagination disciplined by numbers.

You must separate population from purchasing power. You must model currency and policy shocks that appear unreasonable until they occur. You must price the cost of private infrastructure into the business rather than treating it as a temporary inconvenience. You must understand regulation and participate responsibly in the conversations shaping it. You must choose capital carefully, design for weak credit and build products that work in the customer’s actual environment.

At the same time, you should not become so consumed by the difficulty that you miss the opportunity. Nigeria contains extraordinary ambition, cultural influence, commercial energy and willingness to adopt products that genuinely improve people’s lives. It gives entrepreneurs room to learn quickly and problems significant enough to support important companies.

Running a business in Nigeria has taught me not to romanticise the market and not to dismiss it. It has taught me that opportunity and hardship can occupy the same place, and that the job of the entrepreneur is to see both clearly.

Nigeria is not an easy place to build. But for those who understand the customer, protect the downside, remain close to reality and keep creating, it can be an extraordinary place to build something that matters.

References

• World Bank, Nigeria Data
• Clayton M. Christensen, Taddy Hall, Karen Dillon and David S. Duncan, Competing Against Luck: Harvard Business School book overview
• World Bank, Nigeria Development Update: Positive Economic Momentum in Nigeria, Now Time to Bring Reforms Home
• IFPI, Global Music Report: Recorded Music Revenues Grew 9.0% in 2022
• Central Bank of Nigeria, Payments System