Thursday, June 30, 2011

In Nigeria, Cars have nicknames...

In Nigeria, preowned cars take on the gloss of status symbol and have developed nicknames. The 2000 Honda Accord is widely known as "Baby Boy." The flashy 2003 Accord earned the sobriquet "End of Discussion." Then came the redesigned, equally impressive 2007 Accord: "The Discussion Continues."

Wednesday, June 8, 2011

Citigroup, Goldman Sachs and others offer tips on investing in Nigeria and the African Continent

Business experts at the just concluded West Africa Global Trade & Investment Forum in London advised current and potential investors in Africa "not to be caught up in the (business) hype" common on the continent reports 234next newspapers.

David Cowan, chief economist and director of Africa at Citigroup, a multinational financial services company, said while "gold rushing (seeking for investment opportunity)" is important for investors in Africa, there are "simple rules" that need to be observed in order to succeed in business.

"The first is, don't get caught up in the hype," Mr Cowan said. He said that the big hype at the moment around Africa is meeting the need of the middle class. "But there is no real middle class in Africa. There is growing wealthy elite and there is very rapidly growing poor population which in itself provides huge market opportunity for discerning investors," he added.

Mr Cowan also said that investors should always think about the exchange rate before carrying out a project in Africa. "Once you get the exchange rate forecast right, it will make a big difference in your projects," he said, adding that although the rate of return on investment in Africa is "very high," investment in the continent requires patience and accurate time-frame.

China Onyemelukwe, managing director, Goldman Sachs, said current and potential investors in Africa should not "follow or be put off by hype."

Mr Onyemelukwe said investors should have local knowledge and local partners before embarking on any project. He said some important qualities that investors need to have in order to succeed in business in any part of the world include transparency, corporate governance and professionalism.
Meanwhile, some investors doing business in Africa said while they are trying to contribute to the economic growth of the continent, "African governments should provide, as a matter of importance, support and real participation in projects, including the guaranteeing of the completion of those projects."

Phil Baines, chief operating officer, HSBC Bank, said, "The only thing that Africa lacks is basic infrastructure in terms of power generation, transportation, telecommunication, and refining capability for oil." However, Mr Baines said if African governments can tackle the issue of infrastructure, the region would attract more foreign investment.

"Africa is a huge emerging market and Africa generally possesses natural resources and people who are entrepreneurial by nature," he said, adding that with efforts from various governments "the retail development banks and Africa development banks will play crucial roles in financing developmental projects."

Arnold Ekpe, group chief executive officer of Ecobank Transnational Incorporated, said the aftermath of the global financial crisis saw foreign investment in Africa dip by about 14 percent on the average.

However, Mr Ekpe said, "Policy makers in West Africa in particular have worked consciously to improve the investment and the banking environment in those markets as we see interest rate, for example, in single digit and inflation in single digit; a development that has not happened for a very long time."

He said with the "intense competition" across the world in terms of attracting available trade and investment capital, there is need for "a more coordinated and organised approach by African leaders to trade and investment issues in order to attract foreign investors into the region."

He said the demand for cars, electronics, mobile phones and other consumers variables which is on the increase in Africa is a good signal for investors to take advantage of, adding that the increase in demand was "due to the emergence of a young technology-driven society with growing disposable income and great expectations."

Monday, June 6, 2011

Positioning in an emerging market: YOUR OFFICE IN LAGOS AND NIGERIA.


Definition: A Representative Office is an office established by a company to conduct marketing and other non-transactional operations, generally in a foreign country where a branch office or subsidiary is not warranted.

Representative offices are generally easier to establish than a branch or subsidiary, as they are not used for actual "business" (e.g. sales) and therefore there is less incentive for them to be regulated.


• Coordinate your company’s activities and schedule appointments
• Establish contacts with local clients by personal visits, phone calls, emails etc
• Assist in business networking and liaison with local clients and prospects and attend meetings
• Provide local logistics support including hotels and vehicles reservations, airport protocols, security escort arrangements and visas facilitation
• Relate with relevant professionals, trade associations and government institutions
• Offer market research assistance; provide security advice and cultural information.

BENEFITS: You commence business from Day One! How?

• It takes away the burden of your company recruiting local staff and planning logistics
• It shortens your learning curve of a new business environment and its cultural nuances
• It fast tracks your market entry
• It saves you the stress of dealing with government bureaucracy
• It provides you with instant access to a pool of relevant professionals

Our Office as your office

Our experience in and exposure to international business facilitation and our understanding of the local business environment (the organized private sector and the tiers of government) put us in a good position to offer these services at affordable fees to you.

Call us on +234 1 878 2864 or email for more information.

Visit our website on or check out our blogs on

U.S. Companies Race to Catch Up in Africa

This has become a familiar storyline...

During a series of trips to Africa last year, Tim Solso had a realization: China was beating him at his own game. So the chief executive of Cummins Inc., a maker of truck and machinery engines, vowed to catch up. He plans to quadruple the company's sales in Africa to about $1 billion within five years, investing $15 million annually to train staff and build sales offices from Johannesburg to Casablanca. The company recently installed in South Africa an executive to oversee Africa operations, previously supervised from Europe and Indiana.

Cummins joins a growing number of U.S. companies vying for a stronger foothold on the continent. Caterpillar Inc., the giant maker of construction equipment, is selling more trucks to Mozambique and Zambia. Harley-Davidson Inc. is opening dealerships in Botswana and Mauritius. General Electric Co. has its first aircraft-leasing office in Ghana for Central and West African airlines. Google Inc., Archer Daniels Midland Co. and Wal-Mart Stores Inc. are among the dozens of other U.S. companies moving in or expanding.
U.S. companies' game of catch-up shows the perils of waking up late to the next big frontier market, Africa. The continent's economy is forecast to grow to $2.6 trillion in 2020 from $1.6 trillion in 2008, fueled by booms in mining, agriculture and development of ports, roads and other infrastructure, according to McKinsey Global Institute. The middle class is growing, and total household spending now exceeds that of India.
Getting in early to a developing market allows companies to build up strong brands and sales channels that can reap big profits in the long run. That's what China has done in Africa over the past two decades. It has aggressively promoted trade and investment, courting countries by offering aid in exchange for favorable trade terms. China's exports to Africa last year totaled about $54 billion, up from $5.6 billion a decade before, according to the IMF. U.S. exports to Africa totaled $21 billion last year, up from $7.6 billion in 2000.

The status quo is likely to change as many U.S. companies (and Europeans too!) now are "starting to wake up to the African opportunity," says Acha Leke, a Lagos-based director of the McKinsey Global Institute. To succeed, he says, they will need to find good local partners..."

Take for instance, Cummins. For decades, Africa wasn't a priority. However, in 2010, Africa accounted for about $264 million of sales for Cummins as it hopes it can now become a leader in power generators in African countries whose electricity supplies are notoriously unreliable.

Nigeria, where Cummins has a 50-50 joint venture with a local company, AG Leventis PLC, is among the most attractive African markets. Cummins estimates that only 40% of Nigeria's 150 million people have access to electric power.

Many businesses and wealthy homeowners buy diesel-powered generators either as primary or backup sources of power. Generators also power cell-phone towers, street lights and various types of equipment. Some 30,000 generators were sold by various companies in Nigeria in 2010, according to Cummins estimates, bringing total industry sales in the country to about $420 million. Of that, the Cummins joint venture has just an 8% market share, according to the company.

Expanding that share means overcoming the challenges to doing business in Nigeria. In Lagos, one of sub-Saharan Africa's biggest cities, grinding traffic means service vehicles take longer to arrive at customers' doorsteps, and employees have grueling commutes. "Just to get to work is a big challenge," says Koulis Schizas, general manager for Cummins power projects in Nigeria. "The average employee has a two-three hour drive to get here in the morning and a four-five hour drive to get home. It does affect the business."

Having a Representative Office goes a long way in reducing most of the teething problems of setting up in Nigeria. We have experience with two US federal states as Country Representatives, East Mediterranean Regional Office. We can help! Contact Ndudi Osakwe on +234 1 8782864 or email for more information.

Article written by James Hagerty and Will Connors, Correspondents, Wall Street Journal with contributions from Peter Wonacott and Jacqueline Bischof.