Nigeria: The land of entrepreneurs

Baldwin Berges, managing partner for business development at frontier market investment firm Silk Invest, takes a closer look at Nigeria’s entrepreneurs who are the driving force behind this increasingly assertive nation.

Apart from its status as a major global oil exporter, most of Nigeria’s value proposition to foreign investors is about domestic and regional growth. For now, most of its short-term economic drive will come from tooling up the country’s outdated or even non-existent infrastructure such as its faulty power grid, as well as from projects to address the urgent need for roads and bridges that will enable a higher level of functionality.

GDP growth and net foreign direct investment

Click on the play button to visualise how Nigeria’s economic growth has been catching up with that of South Africa. Nigeria is fast on its way to becoming the continent’s largest economy.

It’s all about the entrepreneurs

One of Nigeria’s most precious resources is its human capital. This country’s vitality serves as proof that Nigeria is home to millions of entrepreneurs. It is testimony that the people of this nation, regardless of the below-standard state of its infrastructure, know how to thrive in enterprise. As in many other emerging economies, there simply aren’t enough jobs to accommodate a vast youthful population, so people become entrepreneurs by default. What this means for investors is that there is an enormous opportunity set with which to work.

Funmi Akinluyi, head of Silk Invest’s sub-Saharan equities and a Nigerian herself, says: “If my country can grow at such dazzling rates without good infrastructure, just imagine what it can do when things get fixed.”

Looking beyond the domestic opportunity

What happens in a country with nearly 170 million inhabitants who speak English, the international language of business? They reach out to the world.

I am always amazed at how often I get approached by Nigerian entrepreneurs via Linkedin or even directly by email. This says much about the voracious attitude for which Nigerians are known.

Nigeria is the third largest English-speaking nation in the world after India and the US. This is precisely why the country is ideally positioned to connect with the rest of the world. It is not only about linguistic capabilities, but Africa’s fastest rising economy also happens to be located in one of the most digitalised time zones on the planet.

Thinking ahead, in a globally connected economy, Nigeria’s geographical location makes it very clear that the country is set to become a major future player in the global services industry. Again, these are industries that are synonymous with young entrepreneurs.

When it comes to the services sector, Nigeria certainly earned much respect for the way it dealt with the financial crisis some years ago. The Central Bank of Nigeria’s assertiveness is still a role model for those familiar with the emerging market space. The result is a financial services sector that, in many aspects, is far more robust than in most other economies around the world.

And while it may take some time before businesses around the world embrace outsourcing services to Nigeria, the regional opportunity in Africa is already big enough. Today, the continent is home to more than 700 million consumers, a number that will double in the next 15 years, even by conservative estimates. This means there is already enough opportunity associated with becoming Africa’s leading economic player.

Meet three leading Nigerian entrepreneurs

Aliko Dangote is one of Africa’s richest men. He started building his fortune more than three decades ago when he began trading in commodities like cement, flour and sugar with a loan he received from his uncle. He expanded into full production of these items in the early 2000s and went on to build the Dangote Group, West Africa’s largest publicly-listed conglomerate, which now owns sugar refineries, salt processing facilities and Dangote Cement, the continent’s largest cement producer. Dangote shares his experience and insights with other aspiring entrepreneurs.

Mike Adenuga built a fortune in mobile telecoms and oil production. In 2006, he founded Globacom, Nigeria’s second largest mobile phone network. It has 24 million customers in Nigeria, operates in the Republic of Benin and recently acquired licences to start businesses in Ghana and the Ivory Coast. In this clip from 2011 he speaks about how Nigeria is now truly connected to the world thanks to the broadband cable his company installed.

Jim Ovia founded Zenith Bank in 1990 and it has now grown into West Africa’s second largest financial services provider by market capitalisation and asset base. An equally large chunk of his wealth comes from a portfolio of prime real estate. Ovia devotes the majority of his time to managing Visafone Communications, a telecom outfit he founded in 2007. He also owns Quantum, a private equity fund focused on Africa.

This article was first published on Silk Invest’s blog.