Foreign Equity Firms, Threat To Nigerian Entrepreneurs-Business Coalition

Posted on September 30, 2020

 

Foreign equity firms have been identified as representing a major threat to the well-being of Nigerian entrepreneurs and their businesses. The perceived threat was the focus of interactive session organised by Business Founders Coalition (BFC) in Lagos on Tuesday.

Speaking at the session, Dr Richardson Ajayi, BFC Coordinator, lamented that foreign investors are preying on Nigerian businesses and are seeking to push their founders out.

This, according to him, threatens the nation’s dream to build and nurture vibrant private sector businesses capable of competing with global brands and also reduce employment opportunities for the youth.

“The objective of this meeting is to draw the attention of key stakeholders, especially the Government of the Federation and the business community to the plight of Nigerian entrepreneurs who out of “sweat and grit” started their business but at some point in the pursuit of growth, have had to access venture capital funds or foreign investments. 

“Our experiences have largely been tales of woe, which have the possibility of stunting the growth of indigenous businesses like ours. We are also hoping that through this coalition, government can enact policies and laws that will correct that apparent lop-sidedness,” Ajayi said.

Ajayi lamented that most local businesses have been struggling due to unfavourable operating environment and lack of access to finance to grow their business, hence they approach foreign investors and venture capitalists to invest in their business.

While he acknowledged that there are many good private equity companies that have accomplished successful private equity transactions, as well as those that understand the challenges of the market and are patient with their local partners, Ajayi noted some others seek controlling rights as a major  condition to invest. 

He added that some of the investors disregard the provisions of the agreement to wrest control from the founders, thereby hijacking the indigenous owned companies.

“Our intention therefore is to lead the charge in drawing attention to-this unwholesome practice and advocate for a better investment climate for Nigerian entrepreneurs. To checkmate this unwholesome development, the group called on the government to put in place policies that do not allow an investor to have controlling rights in a Nigerian business,” Ajayi said. 

Muda Yusuf, Director-General of the Lagos Chambers of Commerce and Industry, said the Nigerian Investment Promotion Commission Act of 1995 needs to be reviewed to protect local business owners. He argued that the legislation in too lax and makes it easy for foreign investors to elbow out business founders.The latest equity firm/local entrepreneur dispute involves Alta Semper Capital, UK equity firm and HealthPlus,  the pharmaceutical retail giant. Alta Semper is seeking to take over the Nigerian firm.HealthPlus joins Wakanow, the travel firm; Chicken Republic, a fast food chain; and PathCare, a pathology laboratory service provider, on the list of local firms on the brink of being taken over by equity partners.

Leave a Reply

Your email address will not be published. Required fields are marked *

Latest News

Former goalkeeper of Nigeria’s Super Eagles, Peter Rufai, is dead. Rufai, popularly known as... Continue
The Lagos State House of Assembly has announced plans to establish a modern correctional... Continue
PWAN Max, Nigeria’s foremost real estate network marketing company, recently provide an important update... Continue
BY O’TEGA OGRA For all the ambition that has long swirled around regional integration... Continue
In a landmark move set to redefine Nigeria’s telecom landscape, MTN Nigeria Communications Plc... Continue
BY BABAJIDE FADOJU  On July 1, 2025, the Lagos State Government began full enforcement... Continue
The Lagos State Government, through the Ministry of Commerce, Cooperatives, Trade and Investment, in... Continue
News coming out from the camp of Bayelsa Queens FC says the club has... Continue
RAYMOND TEDUNJAYE Efforts of the National Drug Law Enforcement Agency (NDLEA) at curbing illicit... Continue
On July 9, GTCO Holdings is set to commence trading on the London Stock... Continue

UBA


Access Bank

Twitter

Sponsored