Nigeria. What is coming to your mind thinking of Africa’s most populated country? Nigeria has repeatedly made headline news in the last few weeks and months. It first emerged officially as Africa’s largest economy overtaking South Africa, it was the scene of the horrendous abductions of young school girls by Boko Haram, and then triumphed as the host of the World Economic Forum on Africa. Shortly after, Nigeria was again in the news for all the wrong reasons: the detonation of car bombs in the centre of Abuja.
Nigeria, you may agree, is a country of many extremes and much controversy – even among Nigerians it often seems. But if you look a little closer one cannot help but notice some very unique benefits and trends in regards to Nigeria’s march towards economic development. Everyone who is considering doing business in Africa should be aware of what the country holds in store. Let’s have a look:
1. Your odds to succeed are greater than anywhere else on the continent
According to a recent study published by CNN, both Nigeria and Zambia have with 39.9% the highest business start up rate on the continent followed by Malawi and Ghana. This consequently means that you will be literally surrounded by entrepreneurial spirit.
But it gets better than that for Nigeria. While many countries report a huge rate of start up discontinuation soon after, Nigeria has by a mile the biggest success rate. More businesses survive in Nigeria beyond the first five years than anywhere else in Africa.
2. It’s a hot spot for e-commerce business
Wave goodbye to the image of credit card fraud. Nigerians are confidently building e-commerce businesses, which are gaining fast in popularity. Nigeria has with 28.4% one of the highest internet penetration rates in sub-Saharan Africa, even overtaking Kenya and South Africa, making it an attractive destination for e-commerce businesses. Popular Nigerian online businesses like Jumia, Konga, or Jovago have not only sparked excitement among consumers, but also among international investors. Nigeria is well ahead of most countries in terms of e-commerce development and online business presence; and in this regard it is already successfully building the ground for a globally competitive market.
3. Nigeria’s large population is worth gold for your business
We all know that Nigeria is Africa’s largest nation – to be more precise: every fifth African is Nigerian. That in itself is not necessarily a driver for success as you will find other highly populated African countries where we yet have to find a dynamic economy. But Nigeria’s case is different, because it not only has the largest population, but also the biggest economy. Now, here comes an important point when you combine the two. According to Ernst & Young’s Africa Attractiveness report, mining will not be Africa’s fastest growing sector in the next decade or two, but agriculture and fast-moving consumer products. And if you put that into the context of a fast-growing demography and economy you can only grasp the huge potential Nigeria holds that no other market is currently able to provide in this form. There is immense potential for scalability and for the growth of your business within a single African market.
4. Agriculture is the new oil
Nigeria’s economy has been heavily depending on oil revenues in the past and the Nigerian government is very determined to change this. The development of the agricultural sector is now one of the government’s top priorities. It will most certainly become the sector of the future in Nigeria allowing you to tap into an industry right at the top of a country’s development agenda and one that feeds – literally – into the daily needs of a huge population. If you are operating in related industries such as food processing, manufacturing, rural micro-credit, and export you can still expect that the growth of the agricultural sector will be a powerful engine to your business endeavours.
Despite the many challenges Nigeria faces, and although it only ranked on place number 147 on the World Bank report for ease of doing business, Nigeria is without a doubt, one of Africa’s top business destinations and it is continuously climbing up to out-triumph what it has already achieved. There is still a lot of scope for improvement, and doing business in Nigeria is certainly not for the faint-hearted. You will be operating in a country with a high risk–high opportunity ratio. But the outlook is such that it can be done, and it is well worth the undertaking. Now, put Nigeria on your list – you got to consider it.
Dr Harnet Bokrezion is a senior international development consultant and the founder and CEO of Africa Business Jumpstart, a coaching business that supports you to make informed and strategic decisions while pursuing your business ambitions in Africa faster and more confidently. Follow Harnet on Twitter at @africajumpstart