There was a massive panic in the startup world when Nigeria’s Corporate Affairs Commission (CAC) dropped a notice, telling the general public that companies with foreign participation must have a N100,000,000 (about US$100,000) minimum paid-up capital. First, for most startups and companies with foreign investors and shareholders, this is nothing. Of course, that is not where Nigeria is going; Nigeria is not going after the Delaware- and London-holding companies, but their Nigerian subsidiaries.

In other words, if you have a startup in Nigeria but have a holding company in Delaware, USA, the government expects that paid-up capital to be applied in the Nigerian subsidiary. Of course, when that is done, there is a stamp duty and other fees which can also help the economy.

Understand that most major startups are structured in such a way that Nigeria’s slow, opaque and unpredictable legal system will not derail them. In other words, most investors will not invest directly in the Nigerian entity because our legal system can make a dispute which Delaware can resolve in 3 months to run into a decade. And if you are a fund manager who must return money to your limited partners (investors in your fund), you have no luck with the Nigerian legal system if there is a disagreement. As a result of this, about 90% of all startups in Nigeria which have raised at least $1 million are headquartered in the US or UK.

This setup deprives Nigeria of huge foreign direct investment which ends up affecting the economy in many ways since most of the raised funds are left in American banks (not in Lagos). As I have noted previously, if the funds raised by Nigerian startups are kept in Nigerian banking, our FX paralysis will not be this severe.

Of course, you cannot blame the founders and the investors. He who pays the piper dictates the tune. If the investor does not want to wire $20m to a Lagos bank, because he is afraid of Nigeria’s legal system, you will likely agree to set up a company in Delaware, re-domicile, and then access that money, since no one is going to make-up in Lagos on that investment. 

People, Nigeria has lost the next generation of its finest companies to America and England. Imagine if GTBank, Zenith Bank, etc of the 1990s were not Nigerians, possibly, we may not have them in the stock market today. By 2030 when we are expected to replenish our stock market with new species of companies, Nigeria will not have any because we have lost them already:

“Every ten years, something great happens in the Nigerian/African economy. In the 1990s, the new generation banks were established, and they used technology to create competitive advantages in markets. In the 2000s, the voice telephony era came at scale, led by MTN.  The 2010s provided the mobile internet era as mobile phones connected to the internet, enabling new vistas of opportunities. Right now, in this decade of the 2020s, we’re in the application utility era where the power of cloud computing, mobile internet and software will redesign market sectors across territories in Africa. “

Yes, the 2020s belong to the application utility era which most of the digital startups fall under.

Back to the notice, the CAC has clarified that it was not “paid-up” but “issued capital” [issued share capital refers to the total shares that have been given to shareholders while paid-up share capital refers to the amount of issued share capital that has already been fully paid for].  Nonetheless, even if it did not clarify, that notice would not have affected many companies as many are well paid–up to in excess of $100k even locally. Also, the fee may not even be much (possibly less than N100,000 using recent guidance).

Nonetheless, Nigeria should focus on why its young people and its young companies are abandoning it even as it clarifies that it was “issued capital” and not “paid-up capital”.

To adapt to recent changes in the work environment, workplaces are now adopting a two-tiered workforce. This means having some completely remote workers and some that are entirely on-site. This is different from a hybrid work plan where your workers work a couple of days remotely and the remaining days on-site.

With a two-tiered workforce, the employer would define the job descriptions and define those that a remote talent can do and those that require physical presence at the office location. For instance, you could decide to have the customer service and marketing team work remotely so long as they deliver on their targets and KPIs. On the other hand, the logistics department may need to be entirely on-site to ensure that orders are correctly packaged and sent out for delivery.

It may not always take this form, though. For instance, even within a department, one or two roles could be remote, while the others would be on-site. The implication is that you could have people work together for months without physically meeting.

Why a two-tier workforce?

The global talent pool has many more options for you as an employer and could give you the ability to get some of the best talents in a role outside your physical location. So, while you can have the on-site team doing their part, it is okay to tap from some outstanding talents outside your location. Remote work allows organizations to access a diverse talent pool, breaking geographical barriers and fostering a more inclusive hiring process.

Since this offers the employer flexibility to tap into a wealthy global talent pool, it comes with challenges. Mainly, it can create a sense of division and isolation between team members if there is no proper structure or culture to manage the situation. There could be a breakdown in communication, collaboration, and overall team cohesion.

Conversely, many remote workers report higher productivity levels, citing fewer distractions and a more comfortable work environment as contributing factors. Also, the on-site team may experience increased productivity due to a focused work environment and immediate access to resources.

Challenges you can expect with a Two-tier workforce

1. Communication Disparities:

The absence of casual, in-person interactions that typically characterize an on-site team will be missing in a two-tier workforce, impacting team building and camaraderie. Also, occasional breakdowns in effective communication can lead to misunderstandings, missed information, and a lack of cohesion.

2. Cultural and Team Dynamics:

Team dynamics may differ between remote and on-site teams, potentially leading to feelings of exclusion or a lack of understanding. This way, establishing a unified organizational culture transcending physical locations becomes crucial to maintaining a cohesive workforce.

How to get the best of a Two-tier workforce

1. Make use of Unified Communication Platforms: The use of robust communication tools can facilitate seamless collaboration and real-time interaction for both remote and on-site teams. Also, the management will need to include regular video meetings into the schedule, plus some other virtual team-building activities that can help bridge the communication gap and build some camaraderie.
2. Equal Access to Opportunities: Ensure remote and on-site employees have equal access to career development opportunities, promotions, and recognition programs. Implement transparent performance evaluation processes to mitigate bias and ensure fairness.
3. Cultural Integration Initiatives: Establish initiatives that foster a sense of unity and shared identity among all employees, regardless of their physical location. Come up with fun projects that get team members across departments to collaborate and work together.

Nigeria’s monumental $19 billion Dangote Refinery project is set to commence fuel production as the first crude shipment arrives at the facility, marking a significant milestone for the country’s oil industry.

The OTIS tanker, carrying a 950,000-barrel cargo of Nigeria’s Agbami crude, set sail on December 6 and is en route to Lekki, the nearest land port to Dangote’s offshore crude receiving terminal, according to industry sources and tanker tracking data reported by S&P Global. The tanker is expected to arrive on December 7 around 8pm.

This development follows months of delay that has dampened the hope of many Nigerians who are hoping on the refinery to ease the pain of the high cost of petroleum products, orchestrated by the petrol subsidy removal.

The state-owned Nigerian National Petroleum Company (NNPC), which holds a 20% stake in the refinery with a payment mechanism that includes both cash and crude oil supply, chartered the Suezmax tanker, symbolizing the initiation of crude supplies for the refinery’s operations, according to industry reports.

While many attribute this development to the NNPC’s reported plans to supply the Dangote Refinery with six crude oil cargoes in December for a test run, it unequivocally signifies the initiation of the refinery’s full-scale operation.

Despite the refinery’s official completion in May, the lack of domestic crude feedstock had hindered oil product manufacturing. To address this, the NNPC recently entered an agreement to supply 6 million barrels of crude oil as feedstock to the Dangote refinery in December, aiming to kickstart operations.

However, a development last month, when a report emerged that the NNPC is facing challenges in meeting its obligation, cast doubt on the refinery’s capacity to commence operation. The NNPC is expected to supply crude oil worth $1 billion to the Dangote Refinery, part of its payment for the acquisition of a 20 percent equity stake in the refinery.

The Agbami crude, operated by Chevron, is one of Nigeria’s major deepwater developments with a daily output of approximately 100,000 b/d in the central Niger Delta. It is known for its light sweet crude qualities with a specific gravity measuring 47.9 API and a low sulfur content of 0.04%, yielding significant proportions of naphtha and kerosene.

NNPC has chartered further shipments from various Nigerian offshore fields to the refinery, signifying the beginning of a series of scheduled crude supplies throughout this month, according to industry insiders.

The Dangote Refinery, located on the outskirts of Lagos, faced recurrent delays since its announcement in 2013. Despite substantial installation progress in 2019, delays persisted.

In June, a report from Energy Times indicated that the refinery is not anticipated to become operational until March 2024. This delay was attributed to the refinery being at an 88% completion stage, with some equipment still awaited from manufacturers. Additionally, those components that had been installed were yet to undergo the necessary integrity tests at the commissioning stage.

The refinery, designed to process multiple crudes concurrently, aims to process three Nigerian crude grades — Escravos, Bonny Light, and Forcados. At full operational capacity, the facility is expected to produce a daily output of 327,000 b/d of gasoline, 244,000 b/d of gasoil/diesel, 56,000 b/d of jet fuel/kerosene, and 290,000 mt/year of propane/LPG.

While Dangote officials anticipate an initial output of 370,000 b/d, industry analysts expect the refinery to reach its full operational capacity around mid-2025, though potential delays still loom.

The commencement of Dangote’s operations raises hopes for Nigeria’s aspiration to reduce its reliance on petrol imports, potentially transforming the country’s oil industry landscape.