UK companies should follow the big boys' lead and consider doing business in Nigeria.
The Nigerian economy is big; its GDP was recently estimated at $510 billion, so it’s little wonder that big British names such as Diageo, Virgin Atlantic, British Gas, HSBC, Barclays, Cadbury and Unilever all have bases in the west African state.
It helps, of course, that the official language is English and that the country has strong – albeit chequered – links with the UK.
Nigeria is a growing economy in which businesses can invest. According to UK Trade & Investment (UKTI), it has seen an average GDP growth of 6.9% over the past 10 years.
The big booming sectors tend to be farming-based. According to a report from Wealth Result last summer, the most lucrative sector is poultry farming. Rice production comes in at number six, while water purification (eight), oil and gas (nine) and hotels (11) show how the nation is developing its industrial and tourism sectors.
Looking for a French connection? Try snail farming, which the report says is the fifth most lucrative industry. “It is a low capital investment with high yield and the market is big. There are few people currently doing this – and most of them are doing it in a very low scale. If someone invested heavily in snail farming, they are sure to make good money within a year,” states Wealth Result.
UKTI highlights oil and gas, wholesale and retail, and telecommunications as the big growth sectors in Nigeria, where an investment should generate a good return. Telecoms is booming on the back of a rise in mobile use. The size of its land mass (it’s the 32nd largest country) and its 175 million inhabitants means services such as banking are turning to mobile solutions.
The country’s large customer base includes a growing middle class and a young, educated population. Nigeria is also the biggest beneficiary of Foreign Direct Investment (FDI) in Africa, has abundant natural resources and many Public and Private Partnerships (PPPs) in the developing infrastructure.
So how easy is it to set up a business in Nigeria?
According to UKTI, all business enterprises must be registered with the Corporate Affairs Commission. There are several ways a company can be operated in Nigeria. The most common are partnering with a local company, establishing a Nigerian subsidiary by registering as an Nigerian company and registering as a foreign company.
The Nigerian Investment Promotion Commission, a federal government agency set up to promote, co-ordinate and monitor all investments in Nigeria, can help.