Nigerian entrepreneurs under the auspices of Business Founders Coalition, Tuesday, sent a Save Our Souls (SOS) message to President Muhammadu Buhari, over what they considered hostile takeover bids of foreign private equity firms on their businesses.
At a briefing in Lagos, the its coordinator, Dr Richardson Ajayi, lamented that the nation’s dream to build and nurture vibrant private sector businesses that can compete with other global brands on job creation for country’s teeming youth is coming under serious threat following attempts by foreign investors to push founding entrepreneurs out of their businesses.
He said “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 woes’ which has 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.”
According to Dr Ajayi, most local businesses have been struggling due to unfavourable operating environment and lack of access to local finance to grow their business and have no choice than to approach foreign investors and venture capitalists. But as progressive as this appears on the surface, they usually seek for controlling rights as one of the conditions to invest. Against the ‘spirit of the letter’ they often use this to wrestle control from the founders and force their positions which can be inimical to the growth of the business and overall national development. While acknowledging there are many good private equity companies that have consummated successful private equity transactions as well as patient private equity players that understand the challenges of the market, Ajayi said there are some who come into Nigeria literally to hijack 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.