A Case Study of Nigeria

HRMT 744 M01: MANAGING THE GLOBAL WORKFORCE

Team Report on Country Culture: A Case Study of Nigeria

Durjayeta D. Lall

Gaius N. Ehihon

New York Institute of Technology

Country Snapshot

Like most land that is situated near a river, the inhabitants of such estate are referred to as the people of that river, and a derivative of the river becomes the name of that land. Located near the Indus river, the people near the water source became known as the people of the Indus. The land they occupied became known as India. The land situated in west Africa, comprising of the Niger river running through it, became known as Nigeria.

               With a population size of 182 million and an annual growth of 2.3%, Nigeria is the largest Nation in Africa and is expected to surpass the United States by 2050 (World Bank Data, 2017). This increase in population size can be attributed to the fact that half the populace of Nigeria is currently under the age of thirty (User, 2017). The gross domestic product (GDP) refers to the goods and services provided within a year. It is a basic economic indicator and measures the level of total economic output relative to the population of a country. It reflects changes in total well-being of the population. The GDP for Nigeria as of 2015 was 481.07 billion USD. The GDP per capita refers to the GDP divided by the total population, essential calculating for the goods and services produced per person. As of 2015 the GDP per capita for Nigeria was 2548.20 USD (Nigeria GDP per capita, 2017).

               Nigeria is a nation abundant in natural resources such as gold, tin, lead, limestone and coal, however the mineral industry only accounts for 0.3% of the country’s GDP. While the nation may have a wealth of natural resources, the cornerstone of Nigeria’s exported goods is oil. The oil and gas industry accounts for roughly 35% of the GDP (OPEC Annual Statistical Bulletin, 2016). Due to the height of corruption and crime in Nigeria within the oil sector, sustainable growth and development of the industry is lagging, which limits the capacity of its overall GDP contribution to the country's economy, and such enables other prominent sectors to step up to supplement the oil industry's contribution to the country’s economy. These industries include agriculture, telecommunication and finance.

Since independence, Nigeria has experienced significant turmoil – political economic, cultural, social and otherwise. Most importantly, the challenges Nigeria face stems mainly from political inconsistencies, and can be observed in the fallouts from power battles between Military rule and civilian rule of government. More so, power shifts between dominant political parties of the north (APC - All Progressive Congress) and that of the west (PDP - People’s Democratic Party) also accounts for some of the problems in Nigeria’s politics. It wasn’t until 1999 that the rule of government of the country became more consistent with civilian ruling and remained so till date. This revolution brought Nigeria into a new republic called the Fourth Republic and it was named so because it marked the beginning of a new and consistent democratic rule based on the fourth republican constitution. Despite this development, the country’s economy still suffers. Even though most of the government attempts to improve the country’s economy, the outcome does not relief the majority from poverty, leaving the country’s unemployment rate at 5.8%, not to mention the uprising rate of inflation which is at 9% and continues to increase. These fluctuations in economic indexes are attribute to the impact of political instability on the country’s economy. Each time power shifts from north to south or vice versa only a few people benefit, and those are the in-groups of the incumbent party, say, religious or tribal affiliations.

In Nigeria, citizens’ property right protection is weak, even though the World Bank’s 2016 Doing Business survey reported that fees for property transfers had been reduced. The judiciary has some independence but is hobbled by political interference, corruption, Islamic insurgence and budgetary shortfalls caused by plunging oil prices. Corruption is rarely investigated or prosecuted, and impunity remains widespread at all levels of government. Protectionism driven by currency devaluation has led to increased smuggling.

The top individual income tax rate is 24 percent, and the top corporate tax rate is 30 percent (REF). Other taxes include a value-added tax and a capital gains tax. The overall tax burden equals 2.8 percent of total domestic income. Government spending has amounted to 12.6 percent of total output (GDP) over the past three years, and budget deficits have averaged 2.8 percent of GDP. Public debt is equivalent to 11.5 percent of GDP. Despite recent reforms, the structural changes that are needed to develop a more vibrant private sector have not emerged, and the oil sector still dominates overall economic activity even in the industry’s deep corruption crisis. In the absence of dynamic non-energy growth, a more vibrant labor market has not emerged. To tackle chronic shortages, the government cut gasoline subsidies in May 2016 by 67 percent. Nigeria regulates prices on electricity.

Trade is moderately important to Nigeria’s economy; the value of exports and imports taken together equals 31 percent of GDP. The average applied tariff rate is 11.3 percent. In general, foreign and domestic investors are treated equally, but the judicial and regulatory systems impede foreign investment. The banks are highly exposed to the energy sector, and non-performing loans have been increasing rapidly.          

Hofstede's Cultural Dimension

               The four cultural dimensions according to Geert Hofstede are, power distance, uncertainty avoidance, masculinity versus femininity, and individualism versus collectivism (Hofstede, 1984). Hofstede’s cultural dimensions explains how “values in the workplace are influenced by culture” (Hofstede, 2017). To get a better understand of the Nigerian culture, it can be compared to the United States using the Hofstede’s dimensions. Power distance refers to the degree at which power is either equally or unequally distributed. On the dimension for power distance the U.S received a 40 whereas Nigeria got an 80. Nigeria scores high on power distance reflecting that of a culturally accepted hierarchical order. The Individualism versus collectivism refers to the strength of the ties that people have to others within their community. This dimension shows that scoring high, reflects that of an individualistic society where the community is loosely-knit and everyone has their own best interest.  However, scoring low on this dimension reflects that of a collectivistic society, where loyalty is emulated in strong relationships. For this aspect, the U.S scored a 91 and Nigeria a 30, considering Nigeria to be part of a collectivistic community. Uncertainty avoidance dimension describes how well people can cope with the unknown. In a civilization that scores highly in this section, people attempt to make life as predictable and controllable as possible. On the contrary, people with a low score indicates that the people in the country are comfortable with ambiguity, more likely to take risks and less dependent on structured rules. Within this section both the U.S and Nigeria scored a low score indicating that both countries can manage uncertainty. Masculinity versus femininity dimensions indicates that a society is driven by either achievement or nurture. A high score reflects a society that is driven by wanting to be the best and is a masculine culture. Or, a low score means the society is driven by liking what you do and is a feminine culture. Both the U.S and Nigeria are masculine cultures indicating an emphasis for competition in the workplace.