The week of 10 March sees acclaimed journalist Nikiwe Bikitsha travel to Lagos, Nigeria as part of the Africa Connected quest to uncover the truth about our continent’s emerging economies.Nigeria's GDP composition
Known formally as the Federal Republic of Nigeria, the West African country is also colloquially termed “Africa’s Giant” – and not just for its vast population, which is the largest in Africa. The country is also Africa’s largest economy and a member of a collection of countries that are widely seen as the globe’s next BRICS-like economies, MINT.
Along with Mexico, Indonesia and Turkey, Nigeria makes the MINT line-up, because it is an emerging middle-income mixed economy with developing financial service, communications and technology sectors. It also boasts a re-emergent manufacturing sector that is currently the third largest on the continent.
Altogether, Nigeria is on track to become one of the world’s 20 largest economies by 2020 – at least, it was: in 2016, Nigeria battled recession as a global slump in oil prices (its main export) coincided with rebel attacks in the country’s oil-rich Niger Delta region, hobbling production. Consequently, Africa’s Giant ended that year on course for another of negative growth. But the International Monetary Fund predicts that Nigeria should find its way out of recession in 2017, with Focus Economics saying, “the first green shoots of recovery are starting to emerge.”
In March this year, Nigeria’s government published a reform policy aimed at jump-starting the economy through the selling of state assets and the liberalising of the naira, among other measures. The slow-down in the oil sector also eased due to government negotiations with rebels who have since stopped attacks.
In light of the above, Nigeria’s economy should grow if oil output holds steady or increases. Unfortunately, growth in non-oil sectors will continue to suffer from double-digit inflation, foreign-exchange shortages and unreliable power production. These are just some of the challenges one faces when doing business in Nigeria. Others include the poor state of infrastructure; limited internet access; endemic corruption in the public and private sectors; and an expatriate quota that limits foreign employment.
It’s not all negative, however. Nigeria presents a number of potentially lucrative investment choices for business people who are willing to consider the long term: middle-class consumption should more than triple, providing opportunities for the FMCG industry; the value of agriculture is expected to rise to USD263 billion a year by 2030; and, as most Nigerians rely on mobile phones for internet access, opportunities exist for new phone-compatible internet solutions.
To hear more about Nigeria’s potential, follow Nikiwe on Twitter or tune in to 702. The intrepid journalist will showcase her exploration of the country’s various sectors, as well as expert opinions from the likes of Omasan Ogisi, MTN’s manager of Corporate Affairs; Zik Zulu Okafor, renowned Nigerian film producer; and Tonye Cole, founder of the Sahara Group.