Africa's Gateway to Investment in the Continent- an Overview of Nigeria's Business Environment
Nigeria, October 27, 2014 (Newswire.com) - Africa has been termed investors sauce but Nigeria is the hot sauce. Nigeria is increasingly fastening itself as an investment hub on the African continent and as appetite for other African countries. Nigeria has trudged its way to be the largest economy by GDP size in Africa and has moved to be the 26th largest economy in the world after the economic rebasing exercise in the first quarter of 2014.
Going by regional ranking and GDP base, the top five economies in Africa are; Nigeria (522. 470 billion USD), South Africa (350,779 billion USD), Egypt (271,427 billion USD), Algeria (211,906 billion USD) and Angola (121,704 billion USD).
That Nigeria is the gateway to investment in Africa is not a cliché neither is it leading because of the recently rebased economy nor because reports says so. Nigeria is big not because of its population dividends of over 173.6 million people; the parameter to go by in measuring the investment worthiness of Nigeria is its business environment.
Augustine Apuamaga, CEO PadronConsulting, and founder of naijainvestgateway.com in a business summit highlighted that Nigeria is Africa’s gateway to investment and the key parameter to go by when measuring the claim is an examination of the Nigerian business environment. According to him, companies that successfully enter the Nigerian market, have more potential in penetrating other African markets. He also pointed out the concept of "Think Global Act Local" as a guideline for companies intending to do business in Nigeria. For companies to succeed in a foreign market, it is important to pay attention to the local culture of that country.
Recent growth and forecasts
The positive outlook of the Nigeria’s economy stems from the improved performance of the key non-oil sectors which are; agriculture, information and communication technology, trade and services. The Nigerian creative industry was a major catalyst and still is a major facilitator to the boost in the economy. Report shows that Nigeria has maintained its impressive growth over the past decade with a record estimated 7.4% growth of real gross domestic product (GDP) in 2013, up from 6.7% in 2012.
According to reports, the growth rate of Nigeria’s economy is higher than the West African sub regional level and far higher than the sub-Saharan Africa level. The performance of the economy continues to be underpinned by favourable improvements in the non-oil sector, with real GDP growth of 5.4%, 8.3% and 7.8% in 2011, 2012 and 2013, respectively.
Investors are beginning to explore the non-oil sector of Nigeria and more potentials and opportunities are been unravelled each day as each layer gets peeled.
Economic and political governance
Nigeria’s business environment has shown considerable enhancement over the past few years. Nigeria is one of the 20 economies (out of 189) that have made the most progress towards the “frontier”, or best performance, in getting credit between 2006 and 2014.
Although Nigeria has slipped in ranking to 120th out of 148 countries in the 2013-14 Global Competitiveness Index (GCI) from 115th out of 144 countries in the 2012-13 GCI, it is bouncing back and putting measures in place to remain competitive.
Public sector management, institutions and reform
The Nigerian government has continued to pursue a fiscal-consolidation policy and to advance efficiency in the use of public funds. Although heavily criticized which makes more room for improvement, the Nigerian government as well as the Nigerian citizens are participating in surveillance and correlation of different responses to the society.
A typical example is the government-owned Power Holding Company of Nigeria which recently unbundled into 15 subsidiaries, comprising 5 generation companies (GENCOs) and 10 distribution companies (DISCOs). To say the least, Nigeria has experienced considerable stable power supply over the last month in major cities of the country.
Augustine Apuamaga also noted that the development of the renewable energy sector in Nigeria will promote increased investments and development in all other sector of the economy. According to him, the government is providing a comprehensive, integrated and well informed plan that will grease all other sectors, especially in the aspects of Solar Energy, Wind Energy, Micro-Hydro Energy, Biomass and Biofuel, and Geothermal Energy.
Social Context
Nigeria is grappling with security challenge and ranks really low on global scale in matters related to security. This has posed a major setback to investment but just like Russia, Israel and Korea, investors know that security does not hamper investment. The Nigerian government is frantically collaborating with international bodies to contain insurgency in the country and the Nigerian citizens are actively involved in ensuring social stability.
Report by UNESCO’s Education for All Global Monitoring Report 2012 says that Nigeria has an estimated 10.5 million children still out of school and 26% of those enrolled do not complete the primary cycle. Nevertheless, 72.1% of the population falling within the ages of 15 to 24 years are literate. This analysis reveals that there are huge investment opportunities ,yet untapped in the educational sector in the country.
Nigeria beyond doubt is leading in Africa, and the gateway for investment in the continent. Consequently, Naija Investment Gateway aims to take the lead in assisting investors to identify viable investment opportunities in the country.
About Naija Investment Gateway
Naija Investment Gateway (NIG) is an online portal owned by PadronConsulting, showcasing investment opportunities in Nigeria. NIG provides real time informed insight on the Nigerian economy, providing a guide for foreign and local investors interested in doing business in Nigeria.