We had a quick chat with Opeyemi last week about business processes, and it turned out that one of her great frustrations in managing her textile business is the supply chain, especially the sincerity and transparency of her fabric suppliers. When they promise that they are sending her a delivery of fabrics that are 95% cotton, do they deliver on that promise? The truth though is that delivering on promises made goes both ways; the supply-side and business-side. The reality of running a Small to Medium Enterprise (SME) in Nigeria is not as glamorous as many on the sidelines think it is: securing capital, managing cash flow, and beating the competition. But there’s a quiet factor that is increasingly separating the lasting brands from the one-hit wonders: Supply Chain Ethics.
Simply put, this means ensuring that every step of your process, from where you source your raw materials to how you treat the driver who makes the final delivery, is fair, transparent, and morally sound. It’s about building a business whose success you can truly be proud of.
For many Nigerian SMEs, who account for over 48% of the national GDP and employ 84% of the workforce, focusing on ethics might sound like a luxury, however, we argue that it’s the essential foundation for long-term profit and stability.
Let’s talk about why ethical supply chain management is not just “nice to have,” but critical for Nigerian business growth.
1. The Nigerian Consumer is Watching, and Willing to Pay
A few years ago, customers only cared about price. That era is fading fast. Today, the educated Nigerian consumer, especially Gen Z and Millennials, is demanding more from the brands they patronise.
- Growing Ethical Awareness:Recent studies show a significant and growing percentage of Nigerian consumers are highly concerned about environmental issues and climate change.
- Willingness to Pay Premium:Research also suggests that Nigerian consumers are increasingly willing to pay premium prices for products they perceive as environmentally friendly and linked to quality and health
When you can prove your sourcing is transparent and your labour practices are fair, you capture this valuable, discerning market segment. Ethics become a competitive edge.
2. A Solid Supply Chain is Your Best Risk Management
In Nigeria’s unpredictable environment, from road hazards to currency volatility, risk is everywhere. Ethical practices act as a powerful buffer.
Research on Nigerian SMEs confirms that strong Supply Chain Management (SCM) practices, including ethical compliance and collaborative governance, have a favorable and significant influence on business performance. Why?
- Transparency:An ethical chain is a transparent chain. When you know where every input comes from, you can quickly identify and fix bottlenecks, ensuring better quality control and avoiding legal trouble.
- Stronger Partnerships:Ethical banking encourages building partnerships, not just transactional relationships. This philosophy extends to your suppliers. When you treat suppliers fairly, they prioritise you during tough times, like fuel scarcity or seasonal shortages.
3. The Ethical Edge: Accessing Global Finance and Trade
For any SME looking to scale beyond the Nigerian market, ethical compliance is non-negotiable. Global funders, investors, and major international buyers use ESG (Environmental, Social, and Governance) scores to vet their partners.
If your supply chain involves shady sourcing, poor waste management, or unfair wages, you may be disqualified from securing grants, global contracts, or institutional investment. Adopting ethical supply chain principles now is essentially “future-proofing” your business for global capital.
A Funding Solution Worth Exploring: AltBiz
We recognise the pivotal role funding plays for an MSME operating within the Nigerian ecosystem, and that’s why we put together a solution that helps your business grow. As a non-interest, ethical bank, our values are fundamentally rooted in transparency, partnership, and risk-sharing. We don’t just offer financing; we offer alignment.
- Transparency in Finance:Just as you must be transparent with your customers, we are transparent with you. Our non-interest asset financing model eliminates hidden charges and compound interest traps, allowing you to accurately forecast costs and ensure your business can afford to run ethically.
- Financing for Sustainability:Need to buy a more fuel-efficient delivery truck? Need better, ethically certified materials? We provide flexible, non-interest financing to help you upgrade your supply chain infrastructure without the burden of conventional debt.
The future of business in Nigeria belongs to those who do well by doing good, and have partners who believe in their vision, share their values and are invested in their growth. Let us partner with you to build a resilient, ethical, and profitable supply chain, and business.
