Nigeria is a huge potential market, which continues to experience GDP growth averaging 6-7% despite the global recession. In spite of its environmental and infrastructural constraints and challenges, Nigeria remains a high return business environment, and one, which stands poised to experience economic and social transformation.
Nigerians are entrepreneurial, dynamic and amenable to global lifestyles and consumption-oriented. It is Africa’s second largest economy in terms of GDP ($194bn as at 2010) second only to South Africa. The country is the largest in terms of population in Africa (20%), with population estimates now approaching 170m people. The population distribution is weighted in favour of younger citizens with 52% 19 years and below; and over 80% below 40 years of age.
Poor infrastructure, weak public service delivery and disregard for customer service, corruption and eroding societal value systems introduces a “scientific” principle – things will not proceed the way you want, except if you constantly monitor the process.
Unfortunately this does not apply only to the public services. The decline in quality of human capital produced through Nigeria's public education system means firms must almost totally re-educate fresh hires through expensive management trainee programmes in some cases including basic mathematics and education.
Fortunately for those willing and able to overcome these “slight” obstacles, the rewards can be substantial.
There are many successful foreign firms who have mastered the Nigerian environment, usually in concert with local investors who know the terrain, and are accustomed to the peculiar demands of the Nigerian market.
The combination of a large and youthful population; a consumerist orientation and global lifestyle; and developing markets means opportunities are vast and potential is huge.
Consumer’s psyche
There is penchant for imported brands; the premium outlets in shopping malls confer on shoppers some perception of quality and convenience though at a relatively higher cost. Increasing health consciousness of the consumers, children take preference in consumer spending, food is top on family budget allocation, while communication ranks second.
Distribution channels are broadly classified into two, BTC – Business to Consumer and BTB – Business to Business. BTC flow through company nominated mega/key distributors to sub-distributors/retailers, who operate mainly in the open market and neighbourhood shops.
While BTC constitute 95% of distribution efforts, BTB channel covers institutional customer/formal supermarkets. Medium to large shopping malls have evolved slowly over the years.
Nigeria has experienced its longest period of uninterrupted civilian rule after independence in 1960. This period started in 1999, even though there are questions about the quality of the electoral process, especially after the 2003 and 2007 elections.
The recent 2011 general elections were however largely perceived as credible, and the national electoral body appears to have recovered a lot of credibility.
Local and international observers agree that the elections reflected the will of the electorate.
There has also been various economic reforms since 1999, particularly between 2003 and 2007 in telecommunications, banking, pensions, insurance, downstream petroleum, mines and minerals etc.
The current president appears to be resuming reforms suspended by his late predecessor, particularly the power sector privatisation, which is now proceeding under a re-invigorated power sector road map.
Nigeria is still very green.
