It is hard to believe that a country in which most of the people live on less than US$2 a day could be one of the fastest growing markets in the world for French Champagne and digital televisions. Yet Nigeria, Africa’s most populous country, is just such a place. The pursuit of wealth has even become a religion, literally. Could it be the next big growth frontier for luxury goods?

In March last year, Germany’s luxury car maker Porsche opened a new dealership on Victoria Island. This is the wealthiest district of Nigeria’s capital Lagos. Its immediate catchment area is home to one of the biggest concentrations of millionaires in the world. What is more, they have a seemingly insatiable appetite for luxury brands.

These high net worth individuals are mostly oil industry executives (Nigeria is Africa’s biggest oil producer), entrepreneurs in commodities such as sugar and cement, owners of booming consumer-driven businesses (Nigeria’s economy has grown by an average annual rate of 7% in the last five years, and by 8% in Lagos), well-heeled politicians (corruption is allegedly rife) or millionaire pastors (see below).

Over the past five years, Nigeria’s high net worth individuals have done most of their shopping in Milan, Paris, London and Dubai. The retail infrastructure in Lagos has never really been seen as hospitable to luxury brands despite the apparent demand. Things are changing, however. Lagos still has some way to go before it will be seen as a good fit for luxury retailers (the malls lack sophistication, for instance), but a cluster of international players have followed Porsche and are setting up shop nonetheless.

In April this year, Italian luxury menswear label Ermenegildo Zegna opened a franchise store on the same strip as Porsche (five years down the line this strip could be the Lagos equivalent of Bond Street, London or Calle Serrano, Madrid). Two months earlier, Hugo Boss opened a franchise store in the Palms Shopping Mall (located on a 45,000m² plot of land in the city’s Lekki Peninsula). Other global brands are certain to follow. Prada, for example, has confirmed plans to open in Angola and is a good bet for Nigeria in 2014.

From the open forecourt of the Porsche dealership you can see a huge advertisement for LVMH’s Hennessy cognac. Remarkably, Nigeria is now one of the top 10 biggest markets in the world for Hennessy. The brand launched a commemorative bottle in honour of Nigeria’s 50th anniversary of independence last year, which shows just how important the market has become to its global strategy. This year, consumption of cognac is forecast to break the 1m litre mark (which is higher than in markets such as Mexico, Canada and South Africa).

A long-term investment

Anyone looking to make a fast dollar in Nigeria will probably be disappointed, however. This is a country where the opportunity lies in the future. Porsche knows, for example, that Nigeria’s roads are so badly maintained that anyone buying one of its sports cars is unlikely to be able to drive it very fast, or even very far. For the moment, wealthy Nigerians are buying Porsche not for performance but as a badge of status.