Family-owned businesses are undeniably the backbone of the Nigerian economy, a fact that merits more frequent recognition.
From small local shops to expansive factories, these businesses significantly impact Nigeria’s economy and society. Examples abound, such as FCMB Group, led by Ladi Balogun and built on his father’s legacy; GiG Group, now under Chidi Ajaere’s leadership, following in his father’s footsteps; and Brila FM, managed by Deborah Izamoje, while her father, Larry Izamoje, chairs the parent company.
Outside major cities and large enterprises, countless success stories emerge in the informal sector. Take Alhaja Betterlife in Ibadan, who inherited her mother’s food service business and is now preparing two of her children to carry the torch.
This phenomenon extends beyond Nigeria, with family-owned businesses estimated to contribute 70% of global GDP. In Nigeria, these businesses are particularly resilient, having weathered economic and political challenges without relying on outside investors, sometimes even accepting pay cuts to keep operations afloat.
Though precise data is scarce, 2018 figures reveal that education and healthcare were Nigeria’s leading family-owned business sectors, generating over $1 billion in revenue. Globally, these enterprises are often found in consumer goods like food and fashion, and in mobility, indicating that Nigerian family businesses have room to diversify further.
But what does a family business truly look like? And how do they operate and endure?
Across Nigeria, young people are frequently seen learning the ropes of business from a parent or another authoritative family figure. Establishing a business in a parent’s trade is appealing for new entrepreneurs. Many go on to create complementary businesses, leveraging the original brand’s reputation and goodwill. This approach ensures that during tough times, thriving parts of the business can support others in need.
Regardless of the industry or structure, trust is a vital asset for any business. Family-owned businesses often have a strong foundation of trust, both internally and with customers, who are 12% more likely to trust them. Strong cash flow, typically reinvested into the business, is another key to their success. Family businesses must ensure profitability across generations and maintain strict processes to prevent financial issues.
This focus on cash flow and process management creates a solid foundation for expansion. However, access to capital is often the critical factor for businesses seeking growth.
Fortunately, technology has become a vital tool for family-owned businesses, enabling them to thrive. Digital business banking systems offer effective cash flow management and smooth payments, helping these businesses establish credit histories and access working capital loans. What was once a significant challenge for growth is now more attainable.
The story of Nigerian family-owned businesses is one of resilience, adaptation, and lasting legacy. At Moniepoint, I’m proud to be at the forefront of providing financial security to millions of family-owned businesses nationwide through reliable business banking, seamless payments, and cash flow management products that enable access to working capital loans.
With the right support, these businesses can navigate modern challenges and secure their place in Nigeria’s economic future.
