A recent report from the Lagos Business School’s Family Business Initiative has spotlighted a looming crisis in Nigeria’s business landscape: only 22.8% of family-owned enterprises have completed formal succession plans.
Presented at the 2025 LBS International Family Business Conference in Lagos, the study paints a concerning picture. While 57% of surveyed businesses are still working on their succession plans, 20.2% have yet to begin the process at all—raising red flags about the long-term survival of these businesses.
“The absence of structured succession planning endangers the legacy and sustainability of family businesses,” the report warned.
The Next Generation Conundrum
Beyond the plans themselves, the report also dives into the readiness—and willingness—of heirs to take over. Alarmingly, only 24.6% of business leaders believe their children are interested in continuing the business legacy. Meanwhile:
- 58.8% said their children are indifferent,
- and 16.7% described them as completely disinterested.
Panellists at the conference emphasized the importance of early exposure, structured mentorship, and career path planning to bridge this growing generational gap.
“Leadership must be earned, not inherited,” shared a second-generation CEO in the electrical cable sector.
Another first-generation founder added,
“If the next generation isn’t ready or willing, businesses must look beyond bloodlines to ensure sustainability.”
Retirement Realities & Resistance to Letting Go
The study also explored retirement trends among founders:
- 65.5% of leaders plan to retire between ages 55–65,
- while 34.5% intend to remain in control beyond 70.
This reluctance to hand over control, the report cautions, could block succession efforts and stifle innovation. A gradual transition—where founders shift to advisory roles while successors lead operations—was widely recommended.
Reconsidering Leadership Outside the Family
The data also indicates a gradual shift in openness to non-family leadership:
- 14.9% are fully open to it,
- 28.1% see it as a temporary solution,
- 35.1% are indifferent.
However, cultural hesitation and trust issues still hold many back from embracing external leadership—despite growing calls to prioritize competence over kinship.
“The heir with the greatest hunger for success is the most deserving of leading the succession,” noted one panellist.
When Should Successors Join the Business?
Onboarding strategies vary:
- 51.8% prefer heirs to join right after secondary school,
- while others advocate for post-university involvement or prior external work experience.
The conference ultimately recommended a blended approach—merging early exposure with external experience to develop well-rounded leaders.
The Bottom Line: Plan or Perish
The report closes with a resounding call to action: without intentional, long-term planning, many Nigerian family businesses may face leadership vacuums and eventual collapse.
“Early planning, inclusive leadership development, professionalisation, and strong governance can help family businesses transition smoothly from one generation to the next.”
