According to the World Bank, Nigeria’s macroeconomic performances over the past years have been commendable and include the following: growth in the non oil sector, reduced inflation rate, increase in international reserves, bank reforms, improvement in credit rating, adoption of common external tariff, liberalization and privatization.
According to Matthew Ashimolowo of Kingsway International Christian Centre (KICC), 2010 is a Jubilee year! A jubilee has been defined as a season or an occasion of joyful celebration, a specially celebrated anniversary, especially a 50th.
Discerning business people see the problems in Nigeria as opportunities for investment. Nigeria in 2010 x-rays critical sectors worth taking a look if interested in Doing Business in Nigeria. You should...this land flow with milk and honey!
1. NIGERIA IN 2010; THE JUBILEE YEAR
Ndudi Osakwe, ibgnigeria@gmail.com
The New Year, 2010 started on a wrong foot.
For what has become a way of life, many Nigerians entered the New Year
in darkness. The 6000MW of electricity promised to Nigerians failed to
materialize. Long queues at the petrol stations were carried over on to
the New Year as rumors of increase in the pump price of petrol became
rife.
Shortly before the year 2009 ended, a new helmsman was announced as the
Governor of the Nigerian Central Bank. His name is Mallam Lamido
Sanusi. He introduced some radical reforms that witnessed the exit of
several bank chiefs. The restructuring that followed in the commercial
banks was met with massive sack of workers by banks.
As if the pains mete out to families as a result of power outages,
scarcity of petroleum products and retrenchment of workers were not
enough, the nation was slapped with a label as a ‘country of interest’
by the US as a result of a botched attempt by citizen AbdulMutallab to
bomb a US bound plane. This put the nation’s rebranding project in
crisis as the Ministers scamper to correct any negative impression that
the incident may have generated.
Add these to the anxiety of the citizens on the health of its president
undergoing medical treatment in faraway Saudi Arabia. You guessed
right…!
These are challenging times… but the happy people of Nigeria cannot be
forced into despair. Never! According to Matthew Ashimolowo of Kingsway
International Christian Centre (KICC), 2010 is a Jubilee year!
A jubilee has been defined as a season or an occasion of joyful
celebration, a specially celebrated anniversary, especially a 50th.
Nigeria marks its 50th political independence in 2010. This year also
marks the beginning of the electioneering campaigns leading to the 2011
general elections.
According to the World Bank, Nigeria’s macroeconomic performances over
the past years have been commendable and include the following: growth
in the non oil sector, reduced inflation rate, increase in
international reserves, bank reforms, improvement in credit rating,
adoption of common external tariff, liberalization and privatization.
In addition, stocks are once again experiencing a bullish trend (with
public confidence gradually returning), oil prices have appreciated to
an average of $70 per barrel from an abysmal level of below $40 in
early 2009 in the international markets and amnesty to Niger Delta
militants means that oil companies are returning to the region.
Business intelligence reports show that Nigeria remains a country to be
beaten in sub Saharan African as an investment destination
Increasingly too, Nigerian states are competing with each other for
investment, visitors, events and the like. As if guided by the pre-
requisites offered by Baird’s CMC and the US Chamber of Commerce on
African Business Initiative: having an educated workforce, a fair
business environment, a stable political environment and improved
infrastructure, several governors are working hard to create facts on
the ground through infrastructure development and investments in
critical sectors, especially those that they have comparative
advantage.
2. Most states have deepened their internally generated revenue base as
well as looking at sectors that may jumpstart their economies.
Projects on ICT outsourcing and tourism; and programs on free trade
zones and business parks development are receiving a boost. One stop
investment centres are springing up in state capitals and towns for
leverage. Going a step further, many are adopting safe city norms,
gradually becoming an international standard in the choice of where to
invest, live and to do business.
However, discerning business people see the problems in Nigeria as
opportunities for investment. Only the daring make it in Nigeria! Are
you?
There is not much difference between our recommended sectors in 2009
and 2010 other than that the financial sector has opened up for
investment for those with the wherewithal and the acumen to ride the
Nigerian business wave.
As in 2009, the sectors we have outlined as below have witnessed
tremendous investment of capital by local and foreign businesspeople.
They are as follows:
Hospitality: Hotels are enjoying boom times despite their exorbitant
rates (The Sheraton, Protea, Hilton chain to name a few are reaping
huge profits). Oriental, continental restaurants and fast food eateries
are all over the major cities while bars and night clubs are packed
every evening by locals and foreigners. This is an opportunity for
franchise fast food chains to take the plunge. Kentucky Fried Chicken
(KFC) has just joined the fray. Beers and energy drinks companies are
all smiling to the banks as a result of heightened patronage by
revelers (Ask the Dutch, South Africans and Austrians). Car rental
companies would find the market attractive (Avis is already making a
‘kill’).
Information and Communication Technology: Nigerians may be earning less
than two dollars a day but their appetite for high end smart phones
with 3G capabilities are high (Nokia and Blackberry are witnesses!).
Mobile phone use is presently less than half the population of 150
million people, ample opportunity for mobile phone companies to set up
local plants for new or refurbished phones, the Nigerian Communications
Commission (NCC) permitting. Suppliers of computers, laptops and
network accessories including wireless routers, switches and data
security and encryption would find a ready market here.
Most banks have deployed electronic payment platforms and there is need
to protect ATM users from identity and password theft. Most Nigerian
banks consider expanding their offshore banking operations and need
fraud and risk technologies solutions as they deploy. Surveillance
cameras and panic alarms are in demand as financial institutions,
companies and individuals install cameras in and around their property.
Internet penetration is still low. Such services are worth considering
as Governments may be encouraged to deploy e-government platforms to
save administrative costs while providing access to the citizenry.
Agriculture: Subsistence agriculture is widespread in the country but
unsustainable if the country must feed itself. Improved seedlings,
modern farm equipment, herbicides, storage facilities and mills for
food processing are necessary in the fight against hunger, exacerbated
by the use of the crops for alternative energy development.
3. Governments are interested in partnering with companies that are
willing to go into joint venture with them for aquaculture, livestock
breeding and in the production of livestock feeds and fertilizers.
These projects have the capacity to generate employment for the teeming
youths in the various states. Manufacturers of farm equipment and
consultants in these areas would make good sales.
Services (Outsourcing)-Repatriates or returnee Nigerians from Diaspora
form a ready pool of skilled and experienced human resources for
companies that seek best practice for their business as they consider
locating in Nigeria. With exposure in management practice, health care,
accounting, HR and schools, their expertise are of immense value as
companies tap into the huge opportunities available in the country in
these service sectors. SAT, GRE and GMAT testing remain attractive to
families that desire top notch education in the US and the UK for their
children. Companies in Nigeria prefer graduates from good overseas
universities to local universities as the educational system have
become comatose. Private primary and secondary schools are enjoying a
boom and this is not likely to change soon. Preference for expatriate
teachers and administrators are high, perhaps due to absence of many
committed personnel in the country. This void has been filled by
repatriates with adequate skill set and passion to succeed.
Construction: Public private participation in road construction by the
way of concession, build, own, operate and transfer (BOOT) are avenues
considered by the government at various levels to contain the hydra
headed problem of road dilapidation in the country. Rapid economic
development is enhanced when people and products are able to move from
point A to B. Mass transit rail, water or bus service are looked at by
various governments as solutions to the transportation problems in
their states. Bullet proof cars are still in high demand by chief
executives of companies, embassies and the politicians. Technologies
for road repairs, bridge construction; signage and traffic control
would be interesting to the Governments.
Affordable housing is still out of the reach of the teeming population;
therefore economic housing projects for estate development are of
concern to Governments, local developers and banks, with which
strategic alliance could be formed. Demand for luxury and secured
housing estates is high for the expatriate population, repatriates and
middle class to upper- upper income class group therefore all the
appurtenances for housing construction, fittings and interior
decoration remain in demand. There is a huge attraction in the float
glass subsector. Sand dredging especially in urban centres remains an
attractive venture as more residential estates are built. Demand for
security doors and locks remain high especially among the nouveau rich
and the political class.
Energy: The search for reliable sources of power continues with many
Governments contemplating Independent Power Plants (IPP), set up of
small refineries and alternative sources such as wind, biogas and solar
energy. Imports of generating sets remain high as the population
subscribe to any appliance that provide them with some semblance of
regular power supply. Homes and offices are in dire need of energy to
power on their air-conditioners, office equipment and industrial
machines. Though in the long run, the Government anticipates renewable
and sustainable sources of energy development, any source of power is
acceptable in near term.
Health and Medical Equipment: Many Nigerians still travel overseas for
tests as routine as eye and laboratory testing and medical check up.
Government hospitals and clinics are comatose and without drugs leaving
the population with no choice but to seek alternative health therapy.
4. Expatriates take leave of work to return to home country for treatable
ailments such as malaria. Opportunities abound here for well equipped
clinics and specialized centres for heart-related ailments, kidney
problems etc. Good laboratories with modern diagnostics equipment would
enjoy good patronage especially among the middle class and above,
foreign residents and expatriates. Massage parlors and health spas to
ease stress of living, rheumatic pains and arthritis remain a wise
investment. Trading in generic drugs and syrups is a worthy investment
once approval is given by National Agency for Drugs and Food
Administration (NAFDAC). Consulting in alternative medicine such as
acupuncture is not regrettable.