Nigeria recently paid a heavy price for not diversifying its economy, rather focusing almost exclusively on “black gold” to ensure wealth: in 2016, the oil price dropped and the country fell into a recession, its inadequate infrastructure failing to soften the blow of its main export losing value.
But come 2017 and things are looking up. For one, global oil demand is predicted to increase, and the Nigerian government is bent on policy reform (though unpopular in some camps) to secure an IMF loan that will bolster the ailing economy.
Oshodi market in Lagos
Touching down in chaotic, vibrant Lagos, Nigeria’s capital city, 702 journalist Nikiwe Bikitsha found that the West African country still faces major challenges that could deter investors, despite its current upswing – which will be a slow process. She reports that infrastructure is dire with only 50% of businesses accessing the internet with broadband (the rest rely on mobile phones); electricity generation cannot meet demand; and though Nigeria is one of the top oil-producing nations in the world, it has limited refining capabilities.
However, within these challenges are investment opportunities. According to Nikiwe, for Nigeria to become fully optimal in terms of power generation, it must produce at least 50 000MW a year. It currently produces only 4 000MW. Thus, she says, the electricity sector offers the biggest opportunity in the country.
Refining oil represents another. Nigeria’s government owns a few oil refineries, but they’re badly maintained. However, when interviewing Tonye Cole, part of the trio that founded one of Nigeria’s largest oil, coal and gas conglomerates, Sahara Group, he shared that Africa’s richest man, Aliko Dangote, has plans to build a refinery just outside Lagos. This should generate huge opportunities.
Besides oil and electricity, Nikiwe reports that potential investors can set their sights on Nigeria’s growing middle class, who are demanding more and more consumer goods, and the agricultural sector, which is being expanded in a move towards greater economic diversification. There is also potential in agro-processing.
Third Mainland BridgeThough struggling out of a recession, Nigeria boasts numerous assets – the very same that saw the country become Africa’s biggest economy. No doubt the most valuable is the country’s vast, youthful population. Endowed with an industrious and entrepreneurial spirit, Nigerians yearn to succeed. Take Dr Ola Brown, for example, Founder and MD of Flying Doctors Nigeria, the first air-ambulance service in the country.
After her younger sister passed away partly as a result of the unavailability of emergency medical services, Dr Brown dedicated her life to building a better medical system in Nigeria. Today, Flying Doctors Nigeria transports victims of medical emergencies from all over West Africa, and sometimes Central Africa.
Foluso Phillips, Chairman of Phillips Consulting, believes that Nigeria’s people are “the gem in Nigeria’s economic crown”. Oil will always be important, but it’s the Nigerians themselves who have the will to move Africa’s Giant forward.