3. Technology

Growth in discretionary spending in Nigeria is related to the ongoing telecommunications boom in the country. In 2011 it was estimated that there were 95 million mobile phone subscriptions in the country which averages out to about 59 subscriptions for every 100 people. Alongside this, Nigeria’s internet users have grown from about 80,000 in 2000 to almost 45 million last year. “Staggeringly, roughly one in three internet users in Africa are Nigerian,” adds the report.

According to Business Monitor International, mobile subscriptions are estimated to reach 130 million by 2016, with a penetration rate of over 70%. “This will in turn deepen access to the internet (much of which is through the mobile phone given prohibitively high broadband rates, and limited coverage),” the report states. “That said, new fibre-optic cables landing on Africa’s west coast will elevate the speed, affordability and reliability of broadband internet in the country.”

Standard Bank’s research also reveals that Nigerians have embraced social media with an estimated 5 million Facebook users, the 32nd largest Facebook market in the world.

“In a recent analysis of ‘tweets’ originating from Africa in the final three months of 2011, 1.65 million (15% of the total) originated in Nigeria – making it the third-most active country for Twitter in Africa behind South Africa and Kenya.”

4. Resources

Nigeria is one of the most resource-rich countries in Africa. According to the Organisation of the Petroleum Exporting Countries, Nigeria holds almost one-fifth of Africa’s total proved oil reserves and 35% of proved gas reserves.

The UN Food and Agricultural Organisation (FAO) estimates that around 80% of Nigeria’s total land mass, is classified as being agricultural. While in Africa this is only exceeded by Sudan and South Africa, “Nigeria has four-times South Africa’s and ten-times Kenya’s total internal renewable water reserves,” says the report.

While agricultural production is also improving, the report states that “yields per hectare remain significantly below international standards – indicating potential for elevated agricultural production and food security in Nigeria”.

5. Financial deepening

Behind South Africa, Nigeria has the second-largest banking system in Africa. “According to the IMF, total banking system claims stood at $86bn in 2010,” states the report. “While banking growth has indeed been compelling, the room for expansion is even more enticing.”

According to a 2010 FinMark Trust/EFinA survey, 46.3% of the adult population are completely financially excluded, and only 30% of the adult population are banked.

“It is inevitable, and evident, that as incomes elevate in Nigeria demand for more sophisticated financial products will result,” says the report. “Across Africa, economies with a higher GDP per capita, without exception, enjoy deeper levels of banking penetration. Similarly, as economies urbanise, access to financial services naturally elevates.”

Mobile banking platforms are also opening doors. “Nigeria has 95 million mobile phone subscribers, and fewer than 30 million bank accounts. Estimates vary, yet it is plausible that up to 20 million Nigerians could be drawn into the formal banking system via mobile platforms over the next three to five years.”