‘What is your side hustle?’
This question pervades the background of Nigeria's business landscape. In Nigeria, there are no fixed lifestyles, there are no fixed roles, and there are no fixed jobs. The attitude of most employees is to diversify their income base into other business ventures, while balancing both jobs.
This side hustle is cultural, and it is economic. Outside Nigeria, it is conspicuous in its absence. But in Nigeria, the side hustle is responsible for the extra disposable income, creating a nation of poorly paid employees living middle class lifestyles.
The side hustle is also exactly as it sounds – a business on the side, and almost everyone has one. BBC Business reporter, Nkem Ifejika has described this trend as Nigeria’s 5-9 work ethic. While many Nigerians seeks a safe, secure and salaried job to commit the daily 9-5 hours of work, there is usually an accompanying side business. This is the stereotypical ‘side hustle’ that has created a nation of wholesale and retail traders. For each civil servant you find, there is a relative abroad shipping in clothes and cars – whether from Cotonou or London. The man who sells you a car, can sell you an Iphone, or a used laptop. It's all in the business, it's all part of the hustle.
So over time, what has this mentality created in Nigeria?
The side hustle mania is partly responsible for the rise of micro and small enterprises across the nation. Arguably, a large reason for the growth of these businesses is unemployment. The National Bureau of Statistics said 28% of Nigerians aged between 25 and 34 were jobless in the second quarter of this year, rising to 49% for 15-24 year olds. Correlate that with the ownership structure of Micro, Small and Medium Sized Enterprises (MSMEs) by age which showed that the 24-50 age bracket dominates these enterprises and you have a large proportion of youthful entrepreneurs, simply trying to make a living.
MSMEs and the side hustle
According to the National Policy on MSMEs, Nigerian businesses with less than 200 employees can be divided into micro, small and medium sized enterprises. Micro businesses are those which employ less than 10 people, and whose total assets excluding land and buildings are less than ₦5 million – such as a small kiosk or recharge card seller. Small businesses are those which employ between 10 to 49 workers, with total assets between ₦5million and ₦50million, like a medium sized restaurant.
According to the research carried out by the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), in 2013, out of more than 35 million micro enterprises across the nation, 54% of them where involved in wholesale or retail, also known as ‘buy and sell’. Even manufacturing, the second most popular micro enterprise was only responsible for 13% of these businesses. Interestingly, of this distribution of micro enterprises (less than 10 people), 98% of them were sole proprietorships. The figures point to the fact that most of these entrepreneurs were traders, and were working alone – a very common trend with side hustles.
And the 9-5?
For the unemployed, the side hustle is a necessity. Yet the ‘side’ hustle presupposes the existence of a ‘main’ hustle or job, which provides the bulk of one's income. So why hustle?
One basic assumption is that the aggregate disposable income from two jobs should surpass that of one source of income. It's straightforward logic, ₦200,000 from your bank job, ₦100,000 from last month's kiosk sales. The more the merrier.
Yet there is a fallacy hidden behind this. According to Kirk Synder at the Marshall School of Business at the University of Southern California, too much multitasking makes it harder to sustain attention, and focusing on more than one professional pursuit at a time makes people more likely to abandon the pursuits that take more effort or have a longer payoff curve because there are always other options to focus on. This means that those with both proper jobs and side hustles are potentially losing out on the opportunity to fully excel at just one of those activities. But would Nigerians patiently wait for the office promotion, or would they rather trade on the side until the side hustle suceeds? You can imagine why the side hustle is so popular.
Nigerian entrepreneurial trends
Nevertheless, in his 1994 book ‘Empty Raincoat’, Charles Handy predicted the emergence of a portfolio working class. Portfolio working is when an individual has multiple strands rather than just one strand to their career – as seen with many Nigerian business owners. It means exchanging full time single employment for independence, and is a collection of different bits and pieces of work for different clients. So you might be an accountant working for a bank, but with a small food business on the side.
Sounds very familiar yes?
However, Nigeria is different. While the concept was popularised as recently as 2009 by The Economist as the ‘working style of the future’, Nigerians have been operating under this norm for a while, mainly as a result of the nation's economic failings. For Nigerians, we already have a generation of self employed-employees, transferring income from salaries, not into a savings account or stock portfolio, but into side businesses.
So what can we conclude from all this?
It is clear that there is something very unique in the Nigerian entrepreneurial spirit. It is defiant in its pursuit of more income, refusing to conform to established ideas of employee success. What is unclear is whether this is a purely reactionary effect that would disappear if formal employment was more accessible. Time will yet tell as the economy moves towards a stronger employer-employee structure through company expansions. But for now, what we know is that in Nigeria, the side hustle is real.