Nigeria is a fertile ground for businesses but ironically, it is one of the least exploited markets for investment by foreign investors. This is probably due largely to its penchant for attracting negative reports in the international media. I will admit most of these reports are accurate to some extent. But the reports do not tell the full gist about the country. They generally fail to mention the huge business opportunities in Nigeria. In the last ten years, there has been a series of transformation in the Nigeria economy that has made it especially attractive to foreign investors. The country’s economy is more open (relatively), bigger, diversified and generally business-friendly. Also, for no fathomable reason to me, Nigerians generally prefer to do business with foreigners than with fellow countrymen.
That Nigeria is an attractive investment haven for a foreigner is unquestionable. There is no greater proof of this than the hundreds (maybe thousands) of Chinese and Indian businesses that have sprung up in Nigeria in the last few years. Almost all of which have been recording superlative successes. Nigeria is probably one of the best places for a foreign company/individual to set up in.
However, exploiting business opportunities in Nigeria as a foreigner has its own peculiar requirements. Failure to take cognizance of these will negatively impact your activities in Nigeria. Here we go:
Researching the Nigerian market
Internet: you should start your research on the Internet to have a general feel of the country. You will probably find very few relevant information and even this will not be up to date. The reason for this is not far fetched—Nigeria is yet to evolve to WEB 2.0. Most Nigerian sites especially the government ones (where they exist) are static with rare update of information. The following are some of the few sites with useful and reliable information:
Lagos State Chambers of Commerce and Industry
Nigerian Export Promotion Council
Central Bank of Nigeria
Top newspapers like, Punch, Thisday, Guardian etc.
You can Google them but please, don’t base your decision solely on information gathered from the net. Researching the Nigerian market also requires offline activities
Your embassy in Nigeria: Contact the commercial section of your embassy in Nigeria. Any information you get from them will be reliable
Work with us: This might seem like self-promotion. However, it is included because while I cannot speak about others with certainty, I am absolutely sure of the competence and integrity of my company. Researching the Nigerian market will be easier with our help.
– The best sector for a foreign investment in Nigeria is service. (1) It is the biggest sector (relatively) (2) it is easy to enter (3) it requires little capital (4) it is the most attractive in view of the poor infrastructural base of the country
Specific sectors that are particularly juicy include:
– Web-related fields. It is still largely underdeveloped with enormous growth prospect
– Mobile telecommunication
– Retailing of high-value items
– All kinds of consulting
This list is in no way exhaustive.
Peculiar characteristics of the Nigerian Market
Cash-based: transactions in Nigeria are still largely cash-based
The concentration of business: business activities are concentrated in three main cities of Lagos, Port Harcourt, and Abuja. With Lagos accounting for over 40% of all business activities
Young population: the population is so young that more than 40% are under the age of fourteen
Poor social infrastructure: especially power supply
Poor security in some parts of the country. However, the main commercial city of Lagos and Abuja, the federal capital territory are absolutely safe.
Well educated workforce: on second thought, maybe not so well educated because of the outdated school curriculum. But you can count on their loyalty, hard work and adaptability.
Money speaks: I probably shouldn’t put this but because I wish to be truthful, it is included. In Nigeria, money answereth all things. This simply means with money, almost anything can be obtained
Extreme religiosity: Nigerians are a very religious lot (godly?).
Heterogeneity: Nigeria is a heterogeneous society with more than 250 distinct ethnic groups and languages. The south is liberal while most of the north is conservative
Insulating yourself from risks of doing business in Nigeria
Research properly before you venture into any business in Nigeria. If you are thinking of manufacturing, then you have to do a more thorough research.
If a business proposition looks too mouth-watering, beware! It’s probably a scheme by Nigerian boisterous scam artists to defraud you.
Before making financial dealing (that involves up to two thousand US dollars) with anyone in Nigeria, verify the authenticity of the party. You can contact Economic and Financial Crimes Commision, EFCC for assistance. Please endeavor to state that your purpose is precautionary.
It is advisable to set up in Lagos and/or Abuja, at least initially.
For further help, you can contact our company.