Nigeria Portugal business platform

Nigeria Portugal business platform is an online business platform that connects the business community of Nigeria and Portugal, by creating new partnerships between Nigeria and Portugal.

Nigeria, 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.

At the end of the 9th century, a small minor county based in the area of  Portus Cale was established under King Afonso III , and by the 10th century the Counts were known as the Magnus Dux Portucalensium (Grand Duke of the Portuguese). (PortucalePortugalePortugalia) The Kingdom of Asturias was later divided so that northern “Portugal” became part of the Kingdom of León. As a vassal of the Kingdom of León, Portugal grew in power and territory and occasionally gained de facto independence during weak Leonese reigns. In 1071 Garcia II of Galicia was declared king of Portugal and in 1095, Portugal broke away from the Kingdom of Galicia.

At the end of the 9th century, a small minor county based in the area of  Portus Cale was established under King Afonso III , and by the 10th century the Counts were known as the Magnus Dux Portucalensium (Grand Duke of the Portuguese). (PortucalePortugalePortugalia) The Kingdom of Asturias was later divided so that northern “Portugal” became part of the Kingdom of León. As a vassal of the Kingdom of León, Portugal grew in power and territory and occasionally gained de facto independence during weak Leonese reigns. In 1071 Garcia II of Galicia was declared king of Portugal and in 1095, Portugal broke away from the Kingdom of Galicia.

Portugal: Snapshot of  a Country Investors cannot afford to ignore.

Portugal is a market representing 10 million consumers. During recent years the country went through an austerity process. This process resulted in improved efficiencies in many sectors. Portugal is a member of the European Union, enjoying free access to the markets of the remaining 26 countries. Portugal as an open policy towards foreign direct investment and has put in place physical incentives both for companies and individuals.

The OECD Economic Survey of Portugal forecasts GDP growth for 2019 and 2020 of 2.1% and 1.9% respectively. The institution recognizes that the country’s economic recovery is now well established, In fact, the  GDP is now  back to pre- austerity levels. Recently the unemployment rate (now bellow 7%) has been reduced and a new growth trend is in place for investment and domestic consumption, tighter with a strengthened export sector. In fact the Portuguese economy experienced from 2009 to 2017 a rise of 60% in export volumes.

The country has a strong manufacturing basis with internationally competitive companies in areas such as pharmaceuticals, automotive, engineering, metalomechnics, ceramics, shoes and textile just to name the leading sectors. There is equally an emerging technology services sector operating in international markets (IT Integrators)

Portugal has an investor friendly business environment, noticed improvements in its educational system and has a dynamic University sector, with Universities now well ranked among the leading European institutions.  The country has pool of high qualified professional in sectors such as the Engineering sector in the health Domain.

Recently the country has noticed a trend towards new industries such as biochemical, agribusiness and the reinforcement of the service sectors such as hospitality and tourism. Lisbon and Oporto the 2 leading cities have become centers for international conventions, the most well-known one is the Web-Summit, which now takes place in Lisbon. That has attracted attention to Portugal as a possible destination for IT professionals and to European start-ups as a potential location

Portugal is a member of the Euro area and investors can benefit from the stability of the EUR and from the mechanisms to ensure the soundness of the financial and banking system. The policy makers are now working to reducing the country’s vulnerabilities to build resilience to future crises This means continuing the process of fiscal consolidation and reducing of the Public Debt.

The country is well linked with Europe with very good port infrastructures in Sines, Lisbon and Porto. Portugal is connected to the main centers by a modern web of highways among the best in Europe. Several low-cost airlines have hubs in the major cities Lisbon and Oporto connecting the country to the most dynamic cities worldwide. The country has also a modern IT and Telecoms infrastructure. The country is also among the leading investor in renewable energies

One of the major impact of the crises was to for domestic companies to look for  new export markets, especially in the emerging markets and to lead the companies to search new internationalization strategies which led to them being open to joint-ventures with international companies. Equally the companies had to place emphasis in value addition strategies and investments in quality, design and communication contributed to the growth of the export sector and to the attraction of new customer s in international service markets. The country has through a privatization process and most of the Telecoms and Utilities are now managed by the private sector and contributing to improved productivity levels

One of the key drivers of the country recovery has been the real estate sector with a strong influx from investment from overseas in the sector originating from areas such as France, UK, China, Angola and middle-east.

Due to linguistic and cultural proximity, Portuguese companies have historically established important business networks and economic ties with the Portuguese Speaking countries: Brazil, Angola, Mozambique, Cape Verde, among others.

In 2019, in the latest World Bank Ease of doing business index which ranks countries against each other based on how the regulatory environment is conducive to business operations and protections of property rights. Portugal is ranked 34 among 190 economies in the ease of doing business, according to annual. The index for Portugal averaged 31.91 from 2008 until 2018, reaching an all time high of 48 in 2009 and a record low of 23 in 2014.

The country’s good performance in global competitiveness and its economic recovery is due to the important structural reforms that have taken place in the last couple of decades in key areas such as skills, investment, export orientation, labor market, financial intermediation, and public finances.

In conclusion Portugal is a small open economy with a dynamic and advanced business environment open for foreign investors and liked to the large European and international markets by a modern infrastructure. Its secure environment couple with fiscal benefits and good prospects for return in many dynamic  such as real estate, tourism, Agribusiness or IT start-ups make it a investment location that informed investors cannot afford to ignore.

Important links:

Embassy of Portugal in Nigeria

Embaixada em Abuja: Chancelaria: Plot 3655, Orinoco Crescent (off River Kubani Street, off Nile Street), Maitama – Abuja

Contactos telefónicos:
Chancelaria: +234 (0) 9037808670
Residência: + 234 (0) 7065061486
Fax: +(2349) 4602629 (Chancelaria)

email: abuja@mne.pt