Guide to doing business in Nigeria

Download Frontier's complimentary eBook and learn how business is conducted in Nigeria.

Nigeria is one of Africa’s powerhouses with the potential to be a key player on the global platform, thanks to its huge population, a fast-growing economy (the second largest in Africa), an expanding middle-class that wants to spend money, substantial natural resources, and diplomatic influence.

As one of the largest producers of oil in Africa, it has attracted significant investment into the sector. Current policy initiatives indicate government’s commitment to overcome existing challenges and to diversify the economy. Diversification, for example transforming the agriculture sector, can bring double-digit growth rates by next year, which would put Nigeria’s growth rate ahead that of Brazil and Russia, and slightly behind India and China.

The explosion of sectors such as mobile telecommunications and construction drove growth in the past decade, with many non-oil foreign businesses making profitable investments and often in partnership with reputable indigenous companies. Rapid economic growth is expected to continue; Nigeria aims to be one of the 20 largest economies of the world by 2020.

Crude oil exports dominate the economy and account for about 90% foreign exchange earnings and 70% of budgetary revenues. Other exports are rubber, cotton, cocoa, timber, palm oil, groundnuts and ginger. Major imported goods include machinery, chemicals, equipment, food and live animals. China is the largest import partner followed by the U.S., India, The Netherlands and South Korea. The top three largest exporters to Nigeria are the U.S, India and Brazil.

The country has many investment and business opportunities available to companies seeking growth in fast-growing frontier markets. There are generally no restrictions on foreign investment. However, a few areas are strictly regulated, for example, defence, supply of uniforms for officials of the executive arm of government, and narcotics. Various sectors, for instance, oil and gas, may have specific investment.

Download a complimentary Frontier Market Network eBook on Nigeria and learn:

• How to set up a business 
• Taxation
• Investment climate
• Legal system
• Intellectual property
• Incentives
• Human resources
• Employment law
• Useful facts

Expert advise on doing business in Africa

The investment potential of Africa is real, says five experts we interviewed for this report on doing business in Africa. However, companies need to overcome many challenges in order to be successful - from underdeveloped infrastructure, a fragmented retail landscape and unreliable market research to unclear and fickle government regulations, and limited pipeline of experienced managers.

"Understanding the market size and structure before you enter the market is critical to developing a proper approach when planning investments in Africa." - Hendrik Malan, operations director for Africa at Frost & Sullivan

"When operating in another country, remember you are a guest in that country and should behave accordingly." - Dianna Games, African business analyst and CEO of Africa at Work

"Africa's inadequate infrastructure poses a huge logistical risk. Successful companies invest in their own reliable support systems." - Jean craven, head of corporate finance at Export Trading Group

"Perceptions of investing in conflict-affected countries are changing, especially among investors who are seeking new frontiers for growth. Many of the conflict affected countries are enjoying rapid economic growth, albeit from a low base." - Colin Shepherd, the head of the IFC's Conflict Affected States in Africa Initiative

"We are investing in South Sudan because it represented an exciting investment destination, growing rapidly after years of civil war and under investment by the Khartoum government. When investing in such a place we look for investment opportunities that offer near term returns, given the risk profile." - Managing partner at Maris Capital, Charlie Tyron.

Download Frontier's complimentary eBook featuring these five experts and get insight on:

• What companies must take into consideration when planning investments in Africa
• Insight on the reality on the ground for investors in Africa
• Doing business in conflict and post-conflict countries in Africa
• Challenges and opportunities of operating in South Sudan

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