By Lemmy Ughegbe, Ph.D
Businesses do not vote in elections, but they vote in other ways. They invest, expand, scale down operations and, sometimes, they leave. This week, Uber cast the last of those votes in Nigeria.
After 12 years, the global ride hailing company ended its operations in the country on 2 September, bringing to a close a journey that began in Lagos in 2014 and later expanded to Abuja. Inevitably, its departure raises an uncomfortable question: why would a global brand leave one of Africa’s largest markets?
The easiest answer would be political. Critics of government could present Uber’s exit as another verdict on Nigeria’s economy, while government supporters could dismiss it as nothing more than an internal corporate decision. Both interpretations would be convenient. Neither tells the whole story.
Uber itself has not blamed the Nigerian economy. The company says the decision followed a review of its evolving business priorities and investment focus across Africa. It also withdrew from Uganda on the same day while continuing operations elsewhere on the continent, suggesting a wider corporate recalibration rather than an isolated retreat from Nigeria.
Those facts matter. But another fact matters too: Nigeria should still be asking why.
A serious country does not wait until multinational companies publicly accuse it of being difficult before examining the conditions under which businesses operate. Neither should every corporate departure be dismissed simply because the company involved offers a diplomatic explanation.
Uber entered Nigeria with enormous advantages. It was already one of the world’s most recognisable technology brands and helped popularise app based ride hailing, changing how thousands of Nigerians thought about urban transportation. For many people, “Uber” almost became a generic expression for ordering a ride.
But markets do not reward pioneers indefinitely simply for arriving first. Competitors came. Bolt expanded. inDrive introduced a model that allowed passengers and drivers to negotiate fares directly. Local operators also entered the market and competition intensified.
Some industry observers believe Uber failed to adapt sufficiently to the peculiarities of the Nigerian market and consequently lost ground. If that assessment is correct, there is an important lesson here: not every multinational that leaves Nigeria has necessarily been chased away by Nigeria.
Sometimes companies lose market share. Sometimes competitors innovate better. Sometimes business models cease to fit particular markets. Sometimes corporate headquarters redirect capital towards places where they expect better returns. That is capitalism. We should therefore resist the temptation to convert every corporate departure into political propaganda.
But Nigeria should equally resist the temptation to become comfortable whenever a business leaves because companies do not operate in a vacuum. Whatever Uber’s internal calculations may have been, they were made within a Nigerian business environment that remains undeniably challenging.
Inflation has raised operating costs. Higher fuel prices have increased transportation costs. Currency volatility has complicated business planning, while vehicles and spare parts have become considerably more expensive to acquire and maintain. Drivers are squeezed between commissions demanded by platforms and the fares passengers can afford, while passengers themselves are battling shrinking disposable incomes.
In such an environment, the economics of a single ride become complicated very quickly. The passenger wants a cheaper fare. The driver needs a higher one. The platform wants its commission. Fuel stations and mechanics must be paid. Government expects taxes, levies and regulatory compliance. Somewhere along that chain, somebody must absorb the pressure.
Yet there is another side to the story. Uber’s major competitors are not all leaving Nigeria. Bolt has reaffirmed its commitment to the Nigerian market and signalled its intention to continue expanding. Other ride hailing platforms remain active too.
That complicates any sweeping claim that Nigeria has become impossible for ride hailing businesses. If one competitor leaves while another remains and seeks to expand, then perhaps part of the story lies with the individual company rather than solely with the country.
But even that should not end the conversation. Nigeria needs to become a country where businesses do not merely enter with enthusiasm but find compelling reasons to remain, expand and reinvest.
Governments frequently celebrate investment announcements. A foreign company promises millions of dollars, officials shake hands, cameras flash and press releases announce renewed investor confidence. Such announcements have their place, but attracting investment is only half the assignment. Retaining it is equally important.
The better measure of an attractive economy is not simply how many businesses it welcomes, but how many survive, expand, reinvest their profits, employ more people and remain after five, ten or twenty years. A country that repeatedly celebrates new investors while existing businesses quietly disappear may eventually discover that investment announcements and sustainable economic development are not the same thing.
Indeed, the lesson extends far beyond multinational corporations such as Uber. Perhaps the more consequential businesses are those whose departures never make headlines: the neighbourhood bakery that shuts down because electricity, diesel and flour have become too expensive; the small manufacturer that can no longer afford imported machinery; the restaurant that quietly dismisses its workers and closes its doors; or the entrepreneur who abandons a promising idea because affordable financing is unavailable.
There will be no international headline when those businesses disappear. Yet collectively, their disappearance may matter far more to Nigeria’s economy than Uber’s departure.
That is why the appropriate response to Uber’s exit is neither panic nor propaganda. It is curiosity and introspection.
Government should constantly engage businesses to understand what makes operating in Nigeria difficult. Regulators must distinguish necessary regulation from bureaucratic obstruction. Tax authorities have a legitimate responsibility to collect revenue, but successful enterprises should not become magnets for overlapping demands. Infrastructure must improve, power must become more reliable, and security must cease to be an additional private tax businesses are compelled to provide for themselves. Above all, economic policy must become sufficiently predictable for investors to plan beyond the next government announcement.
Businesses themselves must also adapt. Nigeria may be a difficult market, but it is fiercely competitive. A famous global name does not guarantee permanent market leadership. Consumers will migrate towards whoever offers the best combination of price, convenience, reliability and value.
Uber’s Nigerian experience may therefore contain two lessons at once. Nigeria must make itself easier, more predictable and more rewarding to do business in. Businesses entering Nigeria must also understand that a population of more than 200 million people is not, by itself, a business strategy. Market size offers opportunity, not guaranteed profitability.
Uber arrived as a disruptor. Twelve years later, competitors appear to have disrupted the disruptor. There is something almost poetic about that.
But Nigeria should not simply wave goodbye. Every significant corporate departure deserves examination, not because it automatically indicts the country, but because it can teach the country something.
Businesses may not vote at polling units, but their decisions still communicate. Capital speaks when businesses arrive, when they expand, when they hesitate and when they leave.
Nigeria must learn to listen when they arrive, and perhaps listen even more carefully when they say goodbye.
Lemmy Ughegbe, Ph.D, FIMC, CMC
Email: lemmyughegbeofficial@gmail.comWhatsApp ONLY: +2348069716645
