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 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.
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.
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 sub-sector. 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. 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.
PS: Our Office can help you with issues that bother on the decision to do business in Nigeria. Email Ndudi Osakwe on firstname.lastname@example.org