This article explores diaspora networks and entrepreneurship in Nigeria.
Although small and medium enterprises are believed to play a crucial role in the economic growth of developing countries.
However, these businesses face a lot of challenges and many countries are seeking for ways to nuture their small and medium enterprises.
Network needs of small and medium enterprises
Many challenges SMEs face often discourage some people from doing business with or investing in small businesses.
A major challenge faced by small and medium enterprises in Nigeria is that, most of them cannot access loans from banks and other formal sources of finance.
In addition, these businesses operate within conditions of market uncertainties. Many are interested but find it difficult to expand beyond the domestic market.
Many SMEs that hope to export their products to international markets cannot do so.
This is because a lot of SMEs do not have adequate knowledge about exporting. Therefore, their products do not meet international export requirements.
These factors and many others are the challenges that undermine the domestic growth and export potentials of small and medium businesses in Nigeria.
As a result, SMEs tend to rely on networks to help them overcome the challenges they face.
Therefore, they gain the resources and support they need through informal networks.
For example, many SMEs get their initial capital from networks of family and friends.
Historically, African entrepreneurs have relied on their personal networks such as ethnic, religious and family networks to achieve their business aims.
Diaspora networks in Nigeria
Diaspora networks are bridging institutions between migrant communities and their country of origin.
The diaspora network linkages play an important role in facilitating cross‐border professional support, risk-mitigating knowledge and connections, technical know-how and investment capital.
Diaspora networks are often self-organised and self-sustaining. However, there are overlaps between them.
Examples of diaspora networks are:
- Professional networks .
- Knowledge networks
- Business networks.
- Ethnic networks.
So, if you are looking for an existing network called diaspora network that represents the Nigerian diaspora you will not find one.
The nature and how lasting a diaspora network is, is often a reflection of conditions back home in the country of origin.
In addition, diaspora networks are self-sustaining, dynamic and complex networks.
Nigerians in diaspora tend to come together and organise themselves in different forms to play network roles back home as and when they deem it necessary.
Forms of diaspora networks in Nigeria
If you are interested in knowing more about diaspora networks. Here are some forms of diaspora networks that exist/have existed and the type suport they offer.
These are diaspora networks that are made up of diaspora professionals or intellectuals from a particular country.
For example, some Nigerian physicians and health professionals, such as those belonging to the Association of Nigerian Physicians in the Americas (ANPA), occasionally visit Nigeria collectively.
They do this in a voluntary capacity, to assist in implementing community health projects.
However, such medical missions have been criticised.
It is argued that instead of such visits, diaspora medics and their associations should focus on developing the wider infrastructure by supporting businesses that can maintain medical equipment in Nigeria.
Knowledge networks are diaspora networks that are established for the benefit of knowledge transfer.
They are created by expert diaspora members who have gained not only new knowledge but also skills.
The members of such networks have also established valuable professional and social contacts. Through transnational education and experience in the job market.
Such networks provide a strong entrepreneurship supporting platform of Science, Engineering, Technology and Innovation.
Nigerian diaspora does not appear to be highly entrepreneurial compared to the India or Chinese diaspora.
However, the Nigerian diaspora business owners are a relatively highly educated group.
Although Nigerian businesses with international network links are spread across a number of sectors, the strongest ongoing links tend to be those in the food sector.
For example, agribusiness startups such as Kola Masha’s Babban Gona agribusiness franchise and AACE foods by Ndidi Okonkwo Nwuneli were started by diaspora returnees.
As startups, they also depended on their Harvard Business School alumni diaspora network connections.
Ethnic networks are traditional networks which continues to grow even in modern times.
Historically, ethnic networks are known to facilitate trade by trust based on affect, norms, kinship, or ethnic identity.
The use of ethnicity as a tool for obtaining trust, minimising transaction costs and as a tool to legitimise dominant market positions is strong among the Igbos.
Generally, this is a very easy to type of Nigeria diaspora networks to identify. Nigerians in diasporans tend to identify themselves along ethnic lines, town or village of origin
Therefore, they form Hometown Associations (HTAs).
Through these connections, they offer varied support such as collective remittances aimed at health, financing local cooperative enterprises, education and public infrastructure projects ‘at homeʹ.
Diaspora networks in all forms are capable of supporting and co‐ordinating beneficial linkages between the host country and the country of origin.
However, most successful diaspora networks linked to entrepreneurship and SME development tend to be self-sustaining.
They tend to come together for specific projects at different times.
Akiode, M (2017): An Analysis of Nigerian Diasporans’ Willingness to Participate in Transnational Entrepreneurial Activities