A Western African nation surrounded by Benin, Chad, Cameroon and Niger, the Federal Republic of Nigeria shipped US$44.5 billion worth of goods around the globe in 2017. That dollar amount reflects a -50.3% drop since 2013 but a 35.2% uptick from 2016 to 2017.
The country has currently a population of around 200 million people and it is expected to reach a population of 400 million consumers by 2050 when 50% of the population will be below 25 year old. This gives a measure of the country’s vast human resources. Nigeria has 7 cities above 1 million people, 80 cities with between 100,000 and 1 million people (the majority in the southern part of the country), and 248 cities with between 10,000 and 100,000 people. The largest city in Nigeria is Lagos, with a population of 9,000,000 people.
As a measure of the country´s potential for business, Nigeria´s GDP Annual Growth Rate averaged 3.84 percent during the period from 1982 until 2018. This growth pattern has been confirmed by the performance year-on-year in the last quarter of 2018 where the country noticed a 2.4 percent growth following a 1.8 percent expansion in the previous quarter.
Nigeria GDP Forecast for 2019 is of 447 billion U.S. dollars. The economy has a strong dependency on the oil sector revenues. Therefore, the country’s priority is to diversify the sectors of activity. In that respect, the country has an aggressive and protective trade policy, which protects industries installed in the country. That has contributed to the development of large Nigerian conglomerates such as Dangote, BOA Group, are groups of continental relevance. Nigeria is the leading player in the Economic Community of West African States(ECOWAS), which is made up of fifteen member countries including two Portuguese speaking countries Cap Verde and Guinea-Bissau. The objective is the creation of a common market and Nigeria can be an entry door for neighboring countries providing access to a larger market.
FDI flows to Nigeria were in 2017, in the magnitude of 3,5 billion USD when the total stock of FDI accounted for 24.4% of the country’s GDP (UNCTAD 2018 World Investment Report). Sectors that have benefited from FDI are sectors such as the construction industries were companies such as Julius Berger (German investment with local ties) and the French group Bouygues have established strong long-term positions in the country.
Nigeria has privatized most of the leading sectors in the economy, the country has a competitive and modern telecoms mobile operators networks, and a financial system which after a previous crises Hs been gradually putting in place the mechanism to ensure sustainability. Recently and due to changes in the exchange rate policy and with the good performance the oil prices and increase in its production level the country achieved a steady decline in inflation and achieve stability in the foreign exchange market. The country as an advantageous taxation system, significant natural resources and a low cost of labor. Nigeria is ranked 146 among 190 economies in the ease of doing business.
Currently several emerging economies have identified Nigeria a strategic market. Among those countries, China has already a very significant presence in Nigeria and is developing important infrastructure and civil engineering projects, such as airport construction, roads, and railroad’s projects. There is also an important presence of Indian and Lebanese business networks.
Nigeria is country with strong entrepreneurship culture and Nigerians travel widely in the continent in search of business opportunities. Equally, the Nigeria Diaspora is gaining relevance in countries such as UK, Germany or Italy and can be used as an entry-point or facilitators to enter the market.
The country has huge potential in the creative sector with the entertainment industry (Nollywwod) and the Music industries being the leaders of production in the African continent with its content consumed all over the African continent.
Examples of European multinational companies which have been early investors in Nigeria, and by mastering the strategic alliances with local partners and the development of distribution networks include Nestle and Heineken. The contribution of the Nigerian market to the Heineken´s profit pool is if relevance for the company profitability.
There is an ongoing process of emergence of a dynamic modern distribution sector. Supermarkets such as Shoprite (South African), Spar (Netherlands, with Nigerian partner) and Game (South African, US’ Walmart acquired a majority stake in the parent company) are now operating in the country provide an important platform to develop sales in the country. Products from Portuguese companies can now be found in the shelves of these chains. There is equally a trend of developing new and modern shopping malls. This sector will grow as the government will push to convert the informal market into the formal sector to broaden revenue collection base. Currently an estimated 70% of all wholesalers and retailers still operate in the traditional markets.
Business people who will be willing to:
- invest in the market by carefully screening the emerging growth opportunities in areas were the countries need skills, such as: the IT industries, agro-industries, renewable energies, water, technologies;
- have capabilities, assets (brands, products, processes) relevant for the market
- look for the right local partnerships that can help them secure important competitive positions will be in a position to benefit from the fast future economic growth induced by the natural population growth as from well as from the availability of natural and human resources.
For business with foresight and willing to take risks on the basis of careful market analysis and partner selection, the perception gap between the image of Nigeria and the reality on its business environment can be a strong opportunity to be a first entrant and to reap benefits from the competitors more cautious attitude. No serious strategy for internationalization in Africa can ignore the largest economy in the continent.
From a continental perspective, well over a third (37.4%) of Nigerian exports was sent to European countries while 29.6% worth was destined for Asia. Another 16.5% was delivered to North America, 12.1% went to Africa with 3.3% bought by importers in Latin America excluding Mexico but including the Caribbean.
Based on estimates from the Central Intelligence Agency’s World Fact book, Nigeria’s exported goods plus services represent 12.5% of total Nigerian economic output or Gross Domestic Product. The analysis below focuses on exported products only.
Given Nigeria’s population of 190.6 million people, the total $44.5 billion in 2017 Nigerian exports translates to roughly $220 for every person in the West African country.
Nigeria Exports –
List of the available minerals;
- Pure white Talc
- Lead Ore
- Copper Ore
- Zinc Ore
- Cocoa beans
- Raw Cashew nuts
- Gum Arabic
- Dried Ginger
- Sesame Seed
- Wood charcoal