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Nigeria’s industrial growth depends on business succession
Nigeria’s industrial and economic growth will remain fragile unless businesses survive beyond their founders. Industry leaders say intentional succession planning is no longer optional. Instead, it is critical for sustainability.
Across the country, family-owned enterprises dominate the business landscape. However, many collapse once founders exit. As a result, jobs, capital, and industrial capacity are lost.
Last year, Coleman Technical Industries Limited marked its 50th anniversary. The company is led by its Managing Director, George Onafowokan. Together with his brother, Michael Onafowokan, he has expanded the firm founded by their father, Kayode Onafowokan.
Over the last 20 years, Coleman has invested more than N700bn in Nigeria. According to Onafowokan, such longevity requires deliberate planning. “There must be a clear effort to grow the business beyond the founder,” he said.
He added that legacy only survives when businesses are rooted in Nigeria and guided by strong succession frameworks.
Why family businesses matter
According to PwC, a family business is one where family members own or manage the company. These businesses range from small shops to multinational firms.
Globally, PwC’s Family Business Survey shows that 79 per cent of family businesses last because of strong values. In Nigeria, cultural influence makes this even more important.
In Northern Nigeria, respect for authority and religious values shape business continuity. Meanwhile, the South-West favours consensus-driven leadership. In contrast, the South-East relies on the Igbo Apprenticeship System, known as Igba-Boi, which promotes mentorship and skill transfer.
Despite these strengths, Nigeria still lacks many long-lasting firms. Analysts say weak succession planning remains the main reason.
Economic impact of legacy businesses
Nigeria’s economy depends heavily on family enterprises. In 2023, the Minister of Industry, Trade and Investment, Dr Jumoke Oduwole, estimated that Nigeria had about 23.8 million family businesses.
These firms employ millions and contribute nearly $200bn yearly to the economy. However, only a few survive into the second or third generation.
A 2024 Moniepoint report revealed that about 60 per cent of Nigerian businesses are family-owned. Yet, many founders do not realise this. Consequently, they fail to put governance structures in place.
Although Nigeria has few 100-year-old firms, examples of success still exist. FCMB Group, GiG Group, and Brila FM show that continuity is possible when successors are prepared early.
Lack of succession cultur
Onafowokan believes Nigeria lacks a strong succession narrative. “We have good businesses started by patriots,” he said. “But what happens after the founder is gone?”
He stressed that succession is not about ownership alone. Instead, it protects jobs, investments, and national industrial capacity.
Unlike foreign firms, indigenous manufacturers cannot relocate easily. Therefore, they are more likely to stay and fight for survival.
Discipline as a survival tool
Beyond succession, discipline remains essential. Onafowokan recalled how Coleman nearly collapsed after the 2016 currency devaluation.
To survive, the company cut 70 per cent of its workforce. Although painful, the decision saved the business.
According to him, many Nigerian businesses fail because they prioritise lifestyle over reinvestment. “Discipline is the foundation of survival,” he said.
He added that foreign investors often succeed because they focus on long-term growth rather than quick rewards.
Mentorship and financial realism
Mentorship also plays a key role. Onafowokan warned entrepreneurs against confusing turnover with profit.
“Revenue does not mean cash,” he said. “Profit only exists when money enters the account.”
As a result, founders must teach successors to focus on margins, cash flow, and reinvestment. Displaying wealth too early weakens businesses.
Weak succession planning persists
Dr Muda Yusuf, Director of the Centre for Promotion of Private Enterprise, said most Nigerian businesses still lack succession plans.
According to him, ownership does not equal competence. “A child must be trained and interested,” he explained.
He added that imposing leadership on unwilling heirs often leads to failure. Therefore, founders must identify capable and passionate successors early.
Importance of governance structures
Governance frameworks also shape business survival. An Andersen report revealed that 70 per cent of family businesses fail by the second generation.
Family constitutions, councils, and conflict resolution systems reduce internal disputes. Without them, businesses fragment quickly.
In Nigeria, informal arrangements remain common. Unfortunately, this increases the risk of collapse after founders exit.
Succession and economic stability
Professor Uchenna Uzo of Lagos Business School linked succession to economic health. According to him, weak business continuity signals an unhealthy economy.
Recent PwC data supports this view. Between 2022 and 2023, listed family businesses on the Nigerian Exchange grew their market value by 158 per cent.
This performance shows that well-managed family firms are resilient during economic shocks.
Closing the legacy gap
Experts agree that ego, poor talent management, and founder-centric leadership hurt continuity. Many founders centralise decisions and resist empowerment.
As a result, businesses die once leaders exit.
To fix this, experts call for education on family business management. Institutions like Lagos Business School are already addressing this gap.
Ultimately, long-term planning, mentorship, and discipline will determine whether Nigerian businesses survive across generations. Without them, industrial growth will remain at risk.
