Economic Overview & Business Opportunities
Nigeria, also known as the Federal Republic of Nigeria, is a West African country. Bordering the Republic of Benin in the west, Chad and Cameroon in the east, Niger in the north, the Gulf of Guinea with the islands of São Tomé and Príncipe and Equatorial Guinea in the south, Nigeria is the home to a population over 200.96 million, making it the most populous nation on the African continent. Strategically located in the Gulf of Guinea with direct freight access to North America, South America, Europe, and Asia, Nigeria is the ideal production hub to access the developed markets of North America and Europe with a combined GDP of over US$43 trillion.
As the seventh largest country in the world (in terms of population), Nigeria is the largest economy in Africa and growing fast to be one of the world’s largest economies in the 21st century. The large population translates into a huge potential workforce as well as a large consumer base – an ideal scenario for the manufacturers where investors will not only get the potential customers, but they also will have potential employees.
As a member of the Economic Community of West African States (ECOWAS), Nigeria adopts the ECOWAS Trade Liberalisation Scheme (ELTS). The ELTS offers an exemption of customs duties and tax on goods that fulfil the “Rules of Origin” from any ECOWAS member countries. Currently ranked at the fourth place in terms of return on investment in the world (GDP size of $510B) as well as the highest destination for Foreign Direct Investment (FDI) in Africa, the Nigerian economy is fast gaining traction as the investment hotspot for investors from across the globe.
Nigeria’s structural transformation (from a mono-product economy to a diversified, industrialized economy) has resulted in good economic performance. Consistently ranked as one of the top three destinations for foreign direct investment (FDI) in Africa, Nigeria’s FDI stock registered a record of 98.73 billion in 2016. Agriculture is one of the key pillars in the Nigerian’s economic diversification. The sector has accounted GDP of more than 22%. At the same time, the manufacturing sector contributes to around 10% of GDP. Though there are many areas remains below its potential, manufacturing is no doubt the ideal sector to drive Nigeria’s industrialisation and structural transformation.
The Nigerian government has since put in the effort to create a business-friendly environment for investors with its streamlined administrative and bureaucratic procedures as well as the modernised with policies and programmes. With that in mind, the Nigerian government has introduced a slew of incentives to attract and better assist global investors. Among many others, the Nigerian Investment Promotion Commission Act ensures that investors can repatriate 100% of profits and dividends. The 100% ownership of companies is permitted in all sectors other than oil & gas.
In addition to its dynamic investment environment, Nigeria’s stable political environment with rich natural resources are other reasons that attract foreign investors. Nigerian economy thrives with its liberalised exchange control regulations that ensure the free flow of international finance and Foreign Direct Investment. Besides, investors in Nigeria get to enjoy the easy access to working capital and other credit facilities due to the sound banking system in the country.
On a final note, the Nigerian economy thrives with its rich natural resources and the unique location with geostrategic significance. Nigeria is not only the largest producer of oil in Sub- Saharan Africa, but it also holds the largest natural gas reserves on the continent. If you are looking for an opportunity to gain a foothold in West Africa, Nigeria has a lot to offer.
- Nigeria Company Setup
- Audit and Assurance Services
- Accounting and Bookkeeping Services
- Strategic Tax Planning/Consultancy
- Forensic Accounting and Investigations / Litigation Support Services
- Secretarial Services
- Business Advisory Services
- Insovency and Business Recovery Services
Victor C. Uzodinma MBA, ACTI, FCA