Nigeria, one of the world’s biggest emerging markets and an economic powerhouse on the African continent, is showing immense promise of being at par with the best economies on the planet. Its population not only makes it the largest African nation but also places it as one of the world’s youngest with nearly 65% of the population below 25 years of age! Despite its recent challenges with peace and stability, the Nigerian market is growing at a great pace and continues to be one of the favorite destinations for new businesses.
Nigeria is the most important country in the West African region and is one of the leading recipients of foreign investments in the African continent.
With a GDP of $397 billion (2017), Nigeria’s economy is also the biggest in Africa. Much of the government revenue comes from oil, but oil contributes only 9% of GDP. Over 30% of Nigeria’s workforce is engaged in the agricultural sector, which contributes 21.6% of GDP.
Now, there are a lot of things to note when doing business in Nigeria.
When doing business in Nigeria, be conscious of the fact that the country has a corruption problem. Nigeria ranks at 144 out of 180 in the world on the Corruption Perception Index, a poor ranking indicating relatively high levels of graft. PricewaterhouseCoopers (PwC) estimated that corruption could cost Nigeria 37% of its GDP by 2030.
Stable electricity remains a huge problem for Nigeria. The country has an installed power supply capacity of 12,522 megawatts, but currently only an average 4,000 megawatts of this reaches consumers. This is paltry compared to other countries like Iran that produces 80,000 megawatts of electricity.
Thriving Startup Environment
Nigeria is one African country with a growing number of tech startups and investments. Since 2014, the country has seen the emergence of startups like Andela, Flutterwave, Paystack, Carbon, Kobo360 and many others. Many of these companies have each raised over $10 million with Andela securing over $100 million from investors like Mark Zuckerberg, the founder of Facebook. The importance of startups in Nigeria is that they are emerging to solve particular problems in the country using disruptive technologies. With a population of over 190 million and a growing middle class, the opportunities are huge.
Like many capitalists economies, Nigeria has quite a few regulatory bodies that help to provide common rules in certain parts of the economy. Although Nigeria ranks poorly on the World Bank’s ease of doing business index, the country’s government regulations have enabled it to enjoy a relatively high score in terms of enforcing contracts and protecting minorities.
Nigeria’s 1999 constitution holds several laws that protect workers. For instance, the law enables “equal pay for equal work without discrimination on account of sex, or any other grounds whatsoever.” Nigeria recently passed a law that increased the minimum wage from 18000 Nigerian Naira to 30000 Naira (about $50 to $83) per month. In addition, a workday is a standard eight-hour shift and forty-hour a week.