Economy
The Growth and Growth of Family-Owned Businesses: the Two Key Pillars of Success
By Kyra Motley and Chelsea Turner
Africa has seen an exponential growth of family-owned businesses (FOBs) in recent years, aligned with a fast-growing ultra-high-net-worth population – a trend that is set to continue on an upward trajectory.
This is particularly true of Nigeria. Nigeria has the largest population in Africa and is a landscape where family businesses are prominent and contribute significantly to the country’s economy. Here, FOBs contribute over $200 billion to the Nigerian economy and one out of two Nigerian businesses is a family business.
FOBs are typically resilient, exemplified by their resistance to recent inflationary pressures experienced in the Nigerian economy. Having experienced a number of challenges as they become established, family businesses are now ripe for growth, pending the stabilisation of the economic climate in the region.
Nigeria is one of the recently coined “Big 5” wealth markets in Africa, which together hold over 90% of the continent’s billionaires, and Africa’s population of high-net-worth individuals is predicted to rise by 42% in the next decade.
Therefore, at a countrywide level, the importance of these businesses to the economy cannot be underestimated, nor their wider contributions to the success of surrounding communities at a local level.
Good governance: a critical pillar for sustainable success
Given family businesses are a staple to the economy, it is therefore cause for concern that only 58% have a form of governance structure, and only 6% have dispute resolution procedures in place. Furthermore, in 2021, only 25% had succession plans and 9% had a family constitution, figures which are unlikely to have shifted notably in this time.
Family businesses must equip themselves with a governance framework to enable the business to progress further. A family constitution can ensure a clear goal for the family business and protect continuity for the business that spans beyond some of the family members themselves. This pre-emptive planning can provide beneficial opportunities for family members to settle into their roles before the practical elements of their positions are required. Another useful tool is shareholder agreements, which can ensure clarity on how the success of the business is maintained, providing peace of mind for families who may be concerned about the challenges to come and changes to follow.
Implementing a forward-thinking governance framework will benefit younger generations, who may themselves progress and lead the business forward. These generations may require specific skills or qualifications to enable them to lead with confidence.
These considerations are inherently important given it is an unfortunate fact that many of these family businesses, which are so important to Africa’s economy, do not manage to survive beyond the third generation.
Securing success through effective succession
The importance of effective succession planning should not be underestimated in combatting the challenges family businesses will undoubtedly encounter, and ensuring there is continued prosperity and success for these businesses and the region as a whole.
The challenges faced by family businesses are not inherently distinct from the challenges non-family businesses face. Family businesses do not hold a unique immunity to the challenges of economic instability, inflation, corruption, and terrorism that exist. These features are also not distinct to Nigeria and are faced by many other businesses globally.
However, in conjunction with these adverse influences, family businesses have a multitude of other considerations. Family businesses, just like every other family, will have disputes between family members. However, these disputes are susceptible to being strained, and complications can arise from contrasting management perspectives, concerns for the business, and dealing with business demands.
Furthermore, families are not fixed, instead altering substantially with time, growing with new generations, and coping with the loss of older generations. Legacy is an important aspect to consider, to withstand the changes and fluctuations of modern times, but most importantly so businesses can thrive through these changes.
The prospect of succession planning can be an aspect that family businesses avoid, yet this can cause significant instability – planning ahead can eradicate some of these fears and threats. Focusing too heavily on the present, without a lens for future generations, can result in these hard efforts being unrealised in the future.
In the unfortunate event someone in the family business becomes unable to continue running the business, there should be a plan in place that clearly sets out the steps that should be taken – these may involve drafting Wills for family members, or potentially establishing a trust structure to ensure shareholdings are passed efficiently.
These considerations are often postponed, yet incapacity and death can, unfortunately, strike suddenly and preparing for moments such as these hold the key to the business’s success and survival.
Ultimately, family businesses have a critical role to play in the Nigerian economy and with the right approaches and frameworks in place, they have the potential to propel their established success forward for generations to come.
Kyra Motley is a Partner at Boodle Hatfield, and Chelsea Turner is a Trainee Solicitor at Boodle Hatfield
Chelsea Turner
By Adedapo Adesanya
The duo of MRS Oil and FrieslandCampina Wamco Nigeria Plc weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Friday, June 5.
MRS Plc lost N19.00 during the session to sell at N171.00 per share compared with Thursday’s value of N190.00 per share, and FrieslandCampina Wamco Nigeria Plc depreciated by N8.70 to finish at N181.68 per unit compared with the preceding session’s N190.38 per unit.
As a result, the market capitalisation further lost N22.59 billion to close at N2.607 trillion versus the N2.630 trillion it ended a day earlier, and the NASD Unlisted Security Index (NSI) dropped 37.76 points to settle at 4,358.32 points, in contrast to the previous day’s 4,396.08 points.
The alternative stock market closed the last trading day of this week with a price gainer, Central Securities Clearing System (CSCS) Plc, which gained 6 Kobo to quote at N78.40 per share compared with the preceding session’s N78.34 per share. However, it could not prevent the market from going down at the close of business.
Yesterday, the volume of securities bought and sold by investors went down by 50.0 per cent to 140,345 units from the preceding day’s 280,714 units, the value of stocks decreased by 16.5 per cent to N17.9 million from the previous session’s N21.5 million, and the number of deals carried out by market participants fell by 35.7 per cent to 27 deals from the 42 deals recorded on Thursday.
When trading activities closed for the day, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, trailed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 64.7 million units traded for N4.4 billion.
GNI Plc also ended the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units worth N8.4 billion, followed by Infracredit Plc with 2.3 billion units transacted for N6.5 billion, and Resourcery Plc with 1.1 billion units valued at N415.7 million.
By Dipo Olowookere
Renewed interest in financial stocks and others lifted the Nigerian Exchange (NGX) Limited by 0.15 per cent on Friday.
Customs Street closed higher yesterday despite the 1.37 per cent loss recorded by the consumer goods sector as a result of profit-taking.
This was offset by gains in the other key sectors of the local bourse, as the insurance counter chalked up 1,14 per cent. The banking space appreciated by 0.90 per cent, the industrial goods segment grew by 0.46 per cent, and the energy sector expanded by 0.01 per cent.
Consequently, the All-Share Index (ASI) went up by 366.00 points to 242,593.31 points from 242,227.31 points, and the market capitalisation gained N235 billion to close at N155.594 trillion compared with the previous day’s N155.359 trillion.
The trio of International Energy Insurance, Abbey Mortgage Bank, and DAAR Communications improved by 10.00 per cent each yesterday to N7.26, N9.35, and N1.98, respectively, while Zichis advanced by 9.39 per cent to N32.38, with Sovereign Trust Insurance up by 8.70 per cent to N2.50.
On the flip side, Academy Press lost 9.84 per cent to quote at N8.25, University Press depreciated by 9.73 per cent to N5.10, Africa Prudential dipped by 2.63 per cent to N12.95, Chams crumbled by 2.44 per cent to N4.00, and International Breweries slipped by 1.59 per cent to N12.35.
Business Post reports that the market breadth index was positive during the session after recording 37 appreciating equities and 14 depreciating equities, implying strong investor sentiment.
Abbey Mortgage Bank led the activity chart with a turnover of 164.1 million units worth N1.5 billion, Ellah Lakes sold 76.7 million units for N767.2 million, Access Holdings transacted 44.8 million units valued at N1.1 billion, Linkage Assurance exchanged 23.0 million units worth N41.2 million, and The Initiates traded 20.2 million units for N562.1 million.
At the close of trades, market participants transacted 608.5 million units worth N32.0 billion in 53,826 deals versus the 588.5 million units valued at N27.9 billion executed in 57,352 deals in the previous session. This showed that the number of deals eased by 6.15 per cent, the volume of transactions rose by 3.40 per cent, and the value of transactions soared by 14.70 per cent.
By Adedapo Adesanya
The Naira further depreciated against the United States Dollar by N3.46 or 0.25 per cent to N1,362.21/$1 from N1,358.75/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, June 5.
However, it appreciated against the Pound Sterling in the same market window during the session by N4.47 to trade at N1,823.59/£1 compared with the previous day’s N1,828.06/£1, and gained N7.00 against the Euro to sell at N1,574.58/€1, in contrast to Thursday’s closing price of N1,581.58/€1.
For another trading session, the Nigerian Naira maintained stability against the Dollar in the parallel market and the GTBank forex counter on Friday at N1,375/$1 and N1,372/$1, respectively.
The Naira is expected to remain strong in the near term, backed by a rise in external reserves, which are nearing $50 billion, enhancing analysts’ confidence about its outlook in the second half of 2026.
Heightened global uncertainty has reduced the incentive for importers and corporates to demand FX, as cautious trade weighs on import needs. Analysts estimate a $40 billion net FX position for the year, a projection anchored in oil windfall gains.
As for the cryptocurrency market, prices remained depressed following a strong US jobs report that spurred markets to price in higher-for-longer interest rates, sending Treasury yields and the dollar up while hammering stocks, especially AI-related names. Crypto markets saw heavy leverage washouts with about $1.6 billion in positions liquidated over 24 hours.
Ethereum (ETH) gave up 4.9 per cent to trade at $1,584.68, Solana (SOL) fell by 3.3 per cent to $63.22, Bitcoin (BTC) crashed by 1.9 per cent to $61,333.23, Dogecoin (DOGE) slipped by 1.8 per cent to $0.0821, and Ripple (XRP) moderated by 1.8 per cent to $1.09.
Further, TRON (TRX) dropped 1.6 per cent to sell at $0.3197, Binance Coin (BNB) slumped by 1.0 per cent to $581.18, and Cardano (ADA) declined by 0.4 per cent to $0.1589, while the US Dollar Tether (USDT) gained 0.07 to sell at $0.9997, and US Dollar Coin (USDC) closed flat at $0.9998.
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