12 June 2014 | Tom Reid
Nigeria has been in the news recently. In May the country hosted the World Economic Forum, confirming its status as a global economic powerhouse. It’s no wonder many British companies see the country as a growth opportunity.
For RPM, the experience of operating in territories from Brazil to Russia has been invaluable in understanding how to approach frontier markets.
From threats of crime and violence and issues with the basic infrastructure, to a dearth of high-calibre suppliers and fundamentally different attitudes to insurance, there are plenty of challenges.
The reality is that UK best practice won’t survive first contact. Certain risk-management factors cannot be compromised; such as security, and fundamental ethical and legal considerations - this is not a call to ignore international standards. But for SMEs that don’t possess the resources or time to fully develop the supply base before activating, it will be necessary to make a series of judgement calls.
The margin of compromise is greater than in the UK. Experience has taught us that taking a ‘belt and braces’ approach to everything can create its own problems. Repeat requests for documentation of compliance with every obscure by-law and covenant can result in unnecessary delays and additional ‘permit charges’ from officials keen to oblige – and all without achieving the water-tight position sought.
These steps can mitigate he challenges:
• Research the local socio-political environment - the legal and regulatory framework, business culture, banking, currency and taxation.
• Consider commissioning a specialist security agency. Generic advice will not necessarily suffice.
• Understand your insurance policies. Many ‘worldwide’ policies include exceptions. Local legislation may require insurance to be purchased from local providers. Consider kidnap and ransom insurance.
• Focus on simplified agreements covering core terms and detailing deliverables as explicitly as possible. Strip out any ‘legalese’ and terms that cover every theoretical eventuality.
• Ascertain the company’s attitude to risk on the project, so you can make decisions with a degree of autonomy.
• Never underestimate the potential for delays.
• Trust your judgement and value suppliers that say ‘no’.
☛ Tom Reid is the commercial and procurement manager at marketing communications agency RPM