There is huge, untapped potential here. Nigeria is an enormous market for investors. A market where telecommunications grew, with the explosion of mobile phone subscribers, from 60,000 in 2000 to 125 million today.” – Christine Lagarde, Managing Director, International Monetary Fund
If you give me $5 billion today, I will invest everything here in Nigeria. Let us put our heads together and work.” – Aliko Dangote, Founder/CEO, Dangote Group
There are 53 countries in Africa, so deciding where to do business can be a daunting task. Financial and business resources provide limited guidance, as they consistently spotlight several different African countries as viable places to do business.
Nigeria frequently appears in business and financial publications as a fast-growing economy that offers immense business opportunities. Many Western business professionals have expressed a reluctance to transact business in Nigeria because of negative stereotypes about the country. Nigeria does have local challenges that business leaders need to take into consideration. The country has critical infrastructure gaps, particularly in the power sector, which is holding Nigeria back from its full growth potential. Nigeria’s electricity generation capacity is just 10 percent of South Africa’s, but Nigeria’s population is more than three times greater. Nigeria’s unemployment rate is over 35 percent.
But, there is another side to Nigeria. Nigeria’s economy continued to grow by 6 percent despite the global recession. Nigeria is home to two of the billionaires on Forbes World’s Billionaires list. Folorunsho Alakija, the richest woman in Africa, with a net worth of $600 million is from Nigeria. A substantial number of Nigerians have advanced degrees from U.S. and European institutions. Nigeria’s Finance Minister and former Managing Director of the World Bank, Ngozi Okonjo-Iweala received degrees from Harvard University and the Massachusetts Institute of Technology.
Eight countries (Algeria,Angola, Egypt,Morocco, Nigeria,South Africa and Tunisia)account for 70 percent of the continent’s GDP. The Boston Consulting Group, “The African Challengers: Global Competitors Emerge from the Overlooked Continent” (June 2010).
Africa’s oil and gas exporters have the highest GDP per capita – Algeria, Angola, Chad,Congo, Equatorial Guinea, Gabon,Libya and Nigeria. McKinsey Global Institute, “Lions on the Move” Progress and Potential of African Economies” (June 2010) www.mckinsey.com\insights\africa\lions_on_the_move.
Some of the larger economies with a growing middle-class – such as Nigeria, South Africa, Kenya and Ghana – are increasingly attracting investment flows to their rapidly expanding consumer sector (retail and consumer banking). The World Bank, Africa’s Pulse, vol. 7 (April 2013).
The Nigerian economy may surpass the South African economy in size within ten to fifteen years. “The Lion Kings,” The Economist (January 6, 2011).
In 2012, Nigerian domestic bonds were added to JP Morgan Emerging Market Global Bond Index and in March 2013,were included in the Barclays Index. The World Bank, Africa’s Pulse, vol. 7 (April 2013).