Interview with Pamela Watson, Author, Gibbous Moon Over Lagos, and Strategic Adviser to Smart Ventures in Africa

In 1992-94 Pamela cycled alone and unsupported for 14,500km over 18 months from Senegal to Tanzania. Following more time spent in Africa, in 2002 Pamela founded her own strategy consulting business in Lagos and two years later a social enterprise alongside. In 2005 she was appointed Honorary Consul for Australia in Lagos. In 2009 she left Lagos and returned to London where she continues to work as a strategy consultant and regularly visits Lagos.

Pamela has a forthcoming book, Gibbous Moon Over Lagos, which will be released in February 2020.

What led you to entrepreneurship and which characteristics do you feel entrepreneurs benefit from?

It was a long and winding road that took me to Lagos. I had been a strategy consultant, originally in Australia, then at some of the larger international firms here in the UK. I always had a hankering for Africa - and later I felt like I could be myself there. This hankering for Africa was what lead me to the UK in the 1980s – in search of taking my strategy consulting skills there.

Africa was not a place for private sector management consulting in the 80s or really even in the 90s. It was democratising and coming out of the cold war era. Enterprise of all types had been nationalised. I originally took my strategy expertise into privatisation work but in those early post-cold war days, it was a game of politics between the recipient government and the donor government. The countries had to have a democratic election and to privatise a certain number of state-owned companies in order to be able to get access to a donor loan. The donor put pressure on our teams when we suggested that privatisation was not necessarily the model that would bring the most benefits to the country. I was frustrated that the impact was not authentic, that it was a political game. It didn’t suit me to play it.

Also, I was working alongside people in the aid community, who I discovered have very long time spans, of 10 or 20 years to get change and impact. I admired their tenacity but that was when I knew I was a private sector person; I like getting things done - within five years or next year.

In fact, I learned through my adventures and these early work experiences in Africa that I have the disposition of an entrepreneur.

I take risks. I like to have control over my destiny. I am a bit of a stubborn person and I don’t like being told what to do. I like the unpredictability of not knowing how the day will end which, for me, is what a true adventure is about. These are the characteristics I recognise in other entrepreneurs and entrepreneurship delivers this in spades.

For me though, it is not all about wealth. Indeed, I probably could have been a lot wealthier if I had stuck with the corporate path and become a partner in a large corporate practice.

So, in the mid 90s, following my solo bicycle ride across Africa, I realised I wanted to have a business and a life in Africa. Like most people, I was a bit nervous about Nigeria and I actually first went to Ghana in 1997 to set up a consultancy practice - but its private sector was too small.

Eventually, in 1999, I went to Lagos, Nigeria and joined Accenture locally to make a contribution, earn a living, have fun and to understand the market. I probably would have stayed with them, however, it became clear that the head practice partner assumed that I would leave if my partner (another expat) was transferred out of Nigeria. Despite me expressing that I intended to stay even if he did go, my progression was blocked. Realising the limitations, I went out on my own. A few years after that, my partner was transferred out of Nigeria, and having already established my own businesses, I stayed.

It was a very different environment after my partner left, and I don’t think I really understood how different it was going to be. He was an oil and gas executive, so was sent out on an expat package, he had housing, cars and we had a staff of 12-16 people (mainly guards, but also domestic staff). After that was all taken away, just finding housing was a challenge.

It is my experiences during this period that are the focus of my new book; it really was a new challenging adventure for me. And yet, Nigerian entrepreneurs face these challenges every day, to this day.

I was exposed to having to sort out the myriad daily problems – and there are always a lot of those -by myself without the big support staff in my previous expat lifestyle. Nigeria trumpets that it has moved up 16 places on the World Bank’s ease of doing business index since 2015 or 16, but it is still pretty low. When I was there it was very near the bottom; it is very hard to do business there.

First, I set up a consultancy practice (where I made money), and later a social enterprise (where I spent money).

The social enterprise was concerned with recycling; we made handmade paper out of recycled office material and plants and then turned them into cards and calendars for the domestic corporate and souvenirs markets. Already it was clear that urbanisation was happening and there had not been policy attention by governments or the aid world to the numbers of under-skilled individuals that needed jobs. I had been involved in different approaches to aid to Africa, so am aware of the pitfalls as well as the need. In the mid 2000s, urbanisation and environmental and employment issues were not being addressed - at all. My social enterprise was a drop in the ocean, but to me it was something I could do to improve the environment and work opportunities.

The social enterprise and the consultancy were run alongside each other; in retrospect a mistake. In a complex and challenging environment trying to run two businesses in parallel – on a small scale - was a big ask of myself and my teams.

Could you talk more about the business climate in Lagos and how this has changed since the time you were setting up your business there to now.

I continue to go to Nigeria quite frequently so have marked the changes.

Despite recent diversification attempts, Nigeria remains an oil dependent economy, and so it follows a different cycle to other African countries that are not. That said, there are some elements to the business climate that are familiar.

For example, democratisation and particularly the introduction of the mobile telecommunications industry in the early 2000s completely transformed the business landscape in Lagos and Nigeria – and elsewhere in Africa.

It was a very exciting development in Nigeria as before there were only around 10,000 fixed phone lines, which really meant that you never had an operating phone line. The only way people got an operating phone line was to send a driver to the local NEPA (then the Nigerian Electricity Power Authority, also known as Never Expect Power Always) office to complain, and offer dash. That basically meant the NEPA technician would take one line out and put yours back in. You would then get a line for a day, until somebody else went to the NEPA office to have it reversed. So, most of the time, people could not phone others: we sent a driver with a note.

Within one year it went from this to most staff and clients and suppliers having mobile phones. Everybody in the city had them, including domestic staff, drivers, gardeners, tailors and painters. People were suddenly in touch, could organise work to be contracted more easily, and business took off as a result.

It reduced the number of cars on the road, too.

This created a lot of excitement about the potential of the economy and everybody was saying: “If only we could do the same to power.” With power and telecommunications, the potential of the Nigerian economy and dynamic Nigerians would be unleashed.

However, in 2019, Nigerians are still waiting for power to be transformed, and for access to cheap 24/7 power to unleash the economy.

From about 2006-2014, the wider world increasingly began to recognise that Nigeria was changing and open for business. The diaspora returned and foreign direct investment increased. However, I would say that since 2008 the federal political leadership - from both major parties that have been in power - has been more dysfunctional and unhelpful than helpful. The oil price crash in 2015 ended the good days of plentiful money and investment.

The Buhari government, now in its second term, might have well-intentioned policies but they are re-tread socialist policies of the 1980s, already proven to be economically damaging and unsurprisingly delivering the same result now. Their zeal for protectionism to help an agricultural sector grow is admirable. But their method - closing their land borders to stop food importation and smuggling - has been immensely damaging to manufacturing and trade and has sent food prices skyrocketing. In 2019, GDP growth is sluggish around 2%pa not keeping up with a population growth of over 4%pa. Inflation rates are nearly 12%pa and unemployment is staggering at well over 50%; this is a recipe for instability and unrest.

That said, Lagos has had somewhat better political leadership delivering policy reform and investor confidence in selective sectors. There are limits to what can be achieved against an unhelpful federal political backdrop and infrastructure creaking with rapid population growth. But increasingly, Lagos is seen as a city-state much more friendly to entrepreneurs than other parts of the country.

In 2019, there are business opportunities in Lagos, but in selected industries. The bright spots at the moment are in media, technology, financial services and telecommunications. Nigerians are amazingly creative, so the movie industry is really flourishing. Fintech and mobile related payment services are doing well. Microsoft has just invested in an Africa Development Centre in Lagos. The closure of the land borders has less impact on the services industries. Despite what I see as counterproductive economic policies at the federal level, Nigerians are creating businesses and livelihoods in non-oil sectors. This is encouraging.

Foreigners too should be active in Lagos now, certainly in the growth sectors, but in others too. Taking time now to create relationships, understand the business environment and to invest, will position them for the economic upturn once it comes.

How have you seen levels of corruption change in Nigeria?

Despite the growth of corruption under the stewardship of various military regimes, it was unfortunate that the levels of corruption actually got worse – in my view - with the introduction of a presidential system of government in 1999.  The democratic constitution brought in a presidency, a federal house of representatives and a federal senate; plus 36 states with a governor for each state and a house of representatives for each state; and then over 1000 local governments. Many more touchpoints for corruption were created than under the military regime where you basically had the head of state – a general - and his cronies.

In a sad way, one could say there is more “equality” of corruption now: it is everywhere and touches everyone in every walk of life and so many basic transactions - attempts to get something done, to be paid for services rendered, to get a licence, to pay your taxes, to improve things.

The current government is trying to claw back the corruption, but it is hard because things continue to be plagued by cronyism and vested interests. There are also many observers who assert that those who get convicted for corruption and sent to jail tend to be from the opposition. Not that turning a blind eye to corruption amongst one’s political allies is something unique to Nigeria.

For now, in Nigeria, the reality for businesspeople is that all activity and relationships can be impacted by corruption, and entrepreneurs are frequently confronted with ethical choices. Choosing the moral high road has consequences, and so does the reverse. Everyone must make their choice of which line to cross and which not, in large and small transactions. It is not impossible to be ‘clean’ every day in every way but doing so will have consequences for your business’s growth path and profitability.

At least there is a sensitivity now to corruption and a conversation about it, so I hope things will improve, but it will take individual courage, better leadership at all levels and time.

As an outsider, do you find yourself more vulnerable to requests as you don’t have the protection of a larger company, or are you more likely to be left alone?

I don’t think an outsider’s vulnerability to corruption is a matter of scale; it is still a matter of personal choice.

You need to go in understanding that corruption is in the environment and to have worked out how you as an individual or an enterprise are going to deal with it. Scale helps as you need more resources and time upfront to understand it, plan your stance and policies to cope, and to invest in training and controls, but the process is the same.

Corruption and fraud will impact every scale of business in many more ways than you can imagine. It is not just the government contract or the policeman who is going to ask you for dash. It is imperative you do due diligence to find the right trusted partnerships. Identify individuals you can trust and those who can help you check and cross check others. Bayo Adaralegbe, a Nigerian lawyer I spoke to recently, recommended doing due diligence investigations, not just your business partner but your customers, your staff, your suppliers, right through to your domestic staff.

In Nigeria, there is an adage to ‘never take anything at face value’. One should always be sensitive to the fact that whatever seems to be going on, there is always another angle. For example, one should expect that somebody may have a vested interest behind the scenes that might explain motivations and situations. As a result, the more sources that can be checked the better;  it will provide more insight into what is actually going on and facilitate making the right partnerships.

An entrepreneur needs a really good reliable and experienced lawyer and accountant who will each help with due diligence investigations and with putting in place the policies, processes and auditing trails to help control the business from the outset. Once you lose control of your business, you won’t get it back.

It puts a lot of pressure on the entrepreneur to start out as he or she wishes to go on – which has both ethical and financial consequences.

I have an antenna for corruption that I did not have before. I spot it in the UK, I spot it in a lot of situations. I was very naïve about it when I went to Nigeria. It exists in human relationships where people are trying to get an advantage. In a place like Nigeria where the system is very corrupt, for every individual trying to get their kid into a school, they are going to be facing somebody who is basically, though possibly not overtly, putting up barriers. To vote is difficult. To get exam results a challenge. It has recently been exposed that there is a culture of sexual favours in the universities for women to be able to be awarded their hard-earned grades or results.

It is horrible, and it makes one very conscious of ethics.

Ethics is very abstract in our world. In Nigeria, you really have to know your lines in the sand. For example, personally, I will not pay dash to a policeman. When they ask me “What have you got for me?”, I reply “My best wishes to you and your family”. But each person makes his or her own choice, and that choice is driven by the situation.

Unfortunately, in Nigeria the law is not free of corruption. To get a case lodged the court clerks may want payment from a lawyer. This is shocking, but if the lawyer does not pay then their case may not commence. Some lawyers make the decision that they will do this, but then draw the line at paying the judge.

When I was Honorary Consul for Australia in Nigeria, I met some shifty Australian individuals who I suspected thought that they could get things done in Nigeria by nefarious means. I suspect some got away with it, others got their tail whipped; it was their choice, but it is not a choice I could advise.

In the current environment, with the UK Bribery Act and the US Foreign Corrupt Practices Act, no UK or US  company can afford to engage in any of these practices.

For any legitimate company operating honestly in Nigeria, this must be made clear to company employees. If any unethical behaviour is discovered, there must be consequences. There must be auditing and tracking, and training and whistle blower policies in place. People become proud that they are working for a company that is part of the changing Nigeria because everybody laments the state of things, but no one individual can change it.

The country’s leadership are taking some action, but it is uneven in application and coverage and will take time. Every company that comes in and takes this tough but clean ethical line is part of the solution.

Your current role involves working with companies, social enterprises and NGOs wishing to set up in Africa, what are the key pieces of information you think organisations need to consider?

It will take much longer to plan and establish a successful enterprise in Africa than an inward investor in for-profit or social enterprise activities can imagine. It will need possibly triple the planned investment to cover delays and unexpected costs, and commitments for the long haul. There will be setbacks and without commitment an investor will exit early.

Companies take on the challenges and risks as there is great potential.

The population of Lagos is currently around 20 million. The Nigerian economy is still touted as the largest GDP in Africa despite the oil price drops and poor economic policy.

By the end of the century Nigeria is forecast to be the 4th or 5th largest country by population in the world. It is already huge and becoming more so. What happens in Nigeria affects the other countries in Africa. Lagos is growing not just because other Nigerians are moving there, but because other Africans are. They recognise that it has the momentum to become one of the megacities driving African economic growth.

Some who are in Africa, avoid Nigeria because they are cautious. It is right to be cautious and to learn from others who have gone before. High reward comes to those who take on risk, and I would suggest entrepreneurs take a measured look at Lagos and Nigeria as a long term stake in Africa’s future.

How did you find establishing your business over here, having done it over there?

Honestly, it felt like a piece of cake; bank accounts, loans, tax regimes are so much easier here. Although the paperwork can be heavy, at least it is predictable. That said, things still go wrong here. The number of times I pull my hair out as my day has been derailed - something going wrong or someone letting me down, and then I tell someone in Lagos, who says, “Wow, I thought that only happened here”.

How do you feel that gender has played a role through your career?

I am of an age that I experienced “Me Too” incidents and they were shocking and humiliating, and they made me make some of the choices I did. I decided to get out of places rather than put up with stuff. So, I am really pleased that the world is different now.

It feels like there is zero tolerance in our environment here, but I don’t think it is the same in Nigeria where patriarchy continues. Nigerian women are very strong but encounter these incidents every day.

On the other hand (and I may be wrong), I don’t think they suffer from the same baggage as Western women, in particular the notion that women need to nurture and be kind, that if they are an independent woman with a brain they are considered aggressive, that anytime they bark at somebody they have a character defect. In my experience, there seems less expectation that a Nigerian woman is soft and nurturing - but they have other expectations placed on them.

Nigerian women are assertive, educated and strong yet women are still not represented enough in positions of real power in government or business. A recent McKinsey study has shown that Africa is leading the way in terms of the number of women on boards – at 25% versus 23% in Europe – but this is due to higher representation in South Africa and in a few other countries, but not in Nigeria. Also, these women are largely not in the roles that are the usual pathways to becoming Managing Director.

Will there be change soon? Nigerian women and African women have a much greater tradition of working together (than Western women), and this is powerful for getting change done. It makes me  optimistic about the role they will play in shaping their country’s political and economic future.

How do you see the demographics of entrepreneurship changing?

I think the pathway to entrepreneurship is opening up so that for young people it can be the path they start out on, rather than something they move to. Also, back in the day if you hadn’t started your own business by the time you were 40, you were seen as not having the right stuff for it, that you did not have the right attitude to risk. Now, when people are starting up, they often do it as a side hustle. I think this 40 age barrier has gone. It is more open to everybody.

When I started out as a strategy consultant, people did not really know what my profession was. And it was for freshly minted MBA graduates. Later, management consultancy became more mainstream, especially when mid to late career professionals, joined the field. In the same way, I think people will embrace entrepreneurship in mid-career or even in what would have been their retirement years. They may move into offering access to their expertise or try out a life they always wished they had.

Women have embraced entrepreneurialism for many reasons – some are escaping still patriarchal work environments or glass ceilings, or are creating work environments on their own terms, or for the apparent control it gives over their daily schedule. I am sure this will continue.

Entrepreneurialism is also being sold to young Africans, partly because there are so many opportunities opening up – especially due to technology - and partly because there are not enough jobs for them. Being an entrepreneur in Africa is still not for the faint-hearted and perhaps not the panacea it is being touted as. I would like to see more focus on supporting enterprises scale up as then they are more sustainable and create jobs, and because not everybody is cut out to be an entrepreneur.

The 54 African nations are at different stages, but each is intent on building its independent economic future.

Lagos and Nigeria have the potential to be the economic powerhouse of Africa, and small and large-scale entrepreneurship will play a big role. It will be exciting to see how it unfolds and to be part of making it happen.

Interview conducted by Amy Wevill. Photographs courtesy of Pamela Watson.