12 Most Common Dishonest Business Practices in Nigeria that is killing the Economy

Dishonest business practices in Nigeria people say, is due to harsh economic environment where useful infrastructure is lacking leading to a widespread culture of corruption in the private and public sectors of the economy, I wish to disagree with this opinion.

This article examines this topic by looking at the following: giving bribes for contracts, tax evasion, creative accounting, and embezzlement of money, misleading marketing, poor work environment and safety standards, and maltreatment of employees and poor salary.

Other areas of focus includes producing substandard goods, over invoice, wrong and overcharges to customers accounts, corporate organizations breaking the law by making false returns to regulatory authorities and delays in submitting returns to regulatory authorities

12 Most Common Dishonest Business Practices in Nigeria that is killing the Economy

At the end, you will learn that Nigeria economy can grow when she changes the negative business practices that are pervasive in the land, and she will receive positive ratings from world bodies.

World Bank Survey

In 2017 World Bank Ease of Doing Business Survey, Nigeria ranked 169 out of 192 countries. In addition, the vital indices of electricity supply and paying taxes show that it ranked 180 and 182 respectively.

Yearly, the country ranks as one of the most corrupt nation on earth, this is unacceptable. Bribery is the bane of doing business in Nigeria and this must change.

1) Giving Bribes for Contracts

Many corporate organizations bid for government jobs they are not qualified for because they have other means of winning the contract apart from tendering a practical bid.

Don’t Fail to Read: Effects of Corruption on Nigeria Economy and the Way Forward

In many public establishments, officials will receive your application for a contract and withhold it until you give them bribe to move the file from one table to the other.

Some unqualified companies get major contracts due to their ability to give bribe to top government officials only to abandon the project half way. This accounts for why there are many abandoned projects scattered all over the country. This is so sad.

2) Tax Evasion

Many companies evade Tax because they feel government will not use the money well.

The role of taxation in Nigeria economy can not be overemphasized. However, many companies evade paying tax because they know the government cannot catch them. The blame goes to the government who has not been able to create a good tax collection system that will seize defaulters easily.

3) Creative Accounting

Crooked Company Management carries out creative accounting to deliberately overstate their books to the Board of Directors as better than they are. This wrong doing continues because the regulatory bodies are unable to quickly detect it.

For example, a few years ago Cadbury Nigeria PLC submitted an annual report that did not show the true state of the company at the end of that accounting year. They overstated the financial position of the company over a number of years to the tune of N13 to N15 billion.

This cost the Managing Director and the Finance Director their jobs, the stocks price of the company in the Nigeria Stock Exchange fell.

4) Embezzlement of Money

This is one of the most rampant dishonest business practices in Nigeria. Embezzlement of monies put in the care of top management officers of companies go on with impunity.

These officials deep their hands into the funds of these companies and secretly steal money as if it is their entitlement causing bankruptcy of these companies and loss of jobs.

5) Misleading Marketing

Misleading marketing is where a company creates a marketing campaign that spreads falsehood. They would claim their products or services do what it could not do and until the consumer buys this service or product they would not find out the truth.

The consumer parts with their hard-earned money without any refunds as Nigerians hardly take these rogue companies to court to seek redress.

The Consumer Protection Agency and the Advertising Council should act promptly to stop this fraud.

6) Poor Work Environment and Safety Standards

Most companies in the country are guilty of this particular dishonest business practice in Nigeria.

The small medium enterprises are the worst offenders. Many, carry on their businesses in poor work environments without any safety standards.

Some of these companies owned by expatriates maltreat their workers who are too afraid to report this abuse to civil rights organizations since they do not belong to any labor unions and fear to lose their jobs.

Their industrial machines have cut workers hands and some even die from accidents in these factories without real sanctions to these companies. This must stop.

7) Maltreatment of Employees and Poor Salary

This is the regular occurrence in many companies in the country.

The owners of these companies maltreat the staff and get away with it. This abuse goes on daily without redress. They treat the employee as if the company does not derive any benefit from the work they do.

These companies behave with impunity, owe workers the usual low Salary, and delay payment as long as they wish. Sometimes, they owe salary for months but expect the productivity of each staff to stay excellent.

8) Producing Substandard Goods

Producing substandard goods is one of the notorious dishonest business practices in Nigeria.

Some quack factories produce substandard goods and sell to unsuspecting consumers. The goods would often have the seal of the regulating government Ministry, Directorate or Agency.

Ready examples are the manufacture of Water and Drugs. For example, some manufactures make sachet water (pure water) indiscriminately. They do so due to inability of NAFDAC to catch and punish these dishonest business owners to serve as deterrent to others.

9) Wrong and Overcharges to Customers Accounts

Banks and Telecommunication companies are the main culprits of these dishonest business practices in Nigeria.

The banks will deduct money for services they did not give and over charge your account.

For example, they would deduct commission for issuing you a manager’s cheque which you did not ask for. Deduct SMS alert for one transaction three times or even debit your account for Automatic Teller Machines (ATM) card maintenance fee when you do not have an ATM card.

Telecommunication companies would make sure you click a hidden code which would automatically deduct sums of money ranging from N25, N50 to N100 from your air time and send you a message that you have just subscribed to Sports, Business, or Motivational Tip.

They collect amounts every time you load a credit to your telephone line with fictitious recurrent billing weekly, fortnightly or monthly for things you did not willingly subscribe.

10) Over Invoice

This happens in the market place and government establishments are usually the worst hit. These companies who have contracts to supply goods and services do so and write a list of them in an invoice to present for processing and payment.

Ordinarily, this is harmless but in most cases the companies who offer these goods and services connive with staff of Federal or State government establishments, to inflate figures and put what they did not supply in their invoices.

Companies usually send these inflated bills through this corrupt staff for processing and payment. Upon receipt of approval and payment, these companies would give agreed percentages to their partners in crime.

11) Breaking the Law by making False Returns to Regulatory Authorities

This is part of recurring dishonest business practices in Nigeria. The perpetrators of this wrong doing are mainly in the financial sectors of the nation’s economy. These companies break the law fearlessly and when they catch them, pay a fixed fine without batting an eye.

12) Delays in Making Returns to Regulatory Authorities

The insurance companies quoted in the Nigeria stock exchange are notorious for this wrong practice.

For example, the rendering of quarterly and year-end audited accounts of companies quoted in the stock exchange to the Securities and Exchange Commission and the Nigeria Stock Exchange suffer a lot of delays.

These companies break this law every year and are ready to pay the fine and refuse to change. The regulatory authorities should find tougher punishment for errant companies to make them comply with global best practices.

Conclusion

Citizens should not condone dishonest business practices in Nigeria.

Government should do its best to stamp out these stains of corruption, bribery, over invoicing, etc, by strengthening its oversight functions to uphold high standards since the world is now a global village.

Now that you are face to face with the naked truth of a few dishonest business practices in Nigeria, say no to them and insist on doing things the right way.

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