Insider View: Nigeria a Market Best Described With Superlatives

Insider View: Nigeria a Market Best Described With Superlatives

During the nine years Joël Dido worked as a banker in the Ivory Coast before working in Canada and joining EDC, he dealt with clients from a number of sub-Saharan African countries and rubbed shoulders with the many nationalities that flock to this hub of immigration. He says Nigerians are proud to be the citizens of what is considered West Africa’s superpower. Nigeria’s large economy and rapid growth find reflection in a high – and steadily growing – number of opportunities that many local and foreign companies vie for. Yet Canadian companies have an asset that might give them an edge: their reputation.

How would you describe your experience in this market?

I started my position as EDC’s International Business Development Group’s regional manager for Africa in April 2014, after working in the banking sector in the Ivory Coast and in Canada. Since I was located in the Ivory Coast for nine years, the same region as Nigeria – and neighbouring countries have strong economic ties and are part of the same economic union – I got to know the market well.

What is the Canadian presence in Nigeria?

The Canadian presence in Nigeria has seen a huge increase: from 23 Canadian companies in 2012 to 95 Canadian companies in 2015, a large part of the credit for that growth goes to the trade commissioner service. Canadian companies are active in many areas, such as the oil and gas industry, ICT, services, power and agriculture. We are even shipping canned tomatoes there. Since the market is so large, retail is really big and all the major multinational players, like Nestle and Proctor and Gamble, have plants in Nigeria.

Where can key opportunities be found?

While Nigeria is primarily an oil and gas country, the government has been working to diversify the economy and created opportunities in a number of sectors. For this growth, the country needs power, so there is potential for anything related to power, including renewable energy sources. I’ve seen many solar power transactions in Nigeria in the first half of 2015, for example.

What socio-economic factors are driving these opportunities?

Nigeria is the largest market in Africa with a population of nearly 180 million. The U.N. projects that Nigeria will overtake the US by 2050 when it reaches 440 million people. Currently, 51 per cent of people live in urban areas, where you can find a rapidly growing middle class with more disposable income.

What about competition?

Since Nigeria has a large and fast economy, where returns and yields can be considerable and the growth of businesses can be very fast, there is a lot of competition from local and foreign companies. In addition to China, the U.K., the U.S. and France, we also see emerging countries like India, Turkey and Brazil pushing in Nigeria. You have to be very competitive to succeed.

What works in our favour is that Canadian businesses have a good reputation and the fact that we came to Nigeria to share our knowledge and are not perceived as being there purely for the business, like China, for example. People are generally welcoming us and we receive a lot of requests from Nigerian companies that are looking for Canadian partners and technologies.

What challenges should companies prepare to face?

Although Nigeria is very business-focused, it’s a challenging country. The legal framework can change overnight, so it’s important to get advice.

The power supply is not reliable and all businesses need backup plans for power generation – they mostly use generators.

Fraud is another consideration. Make sure you choose your partners carefully, and take the time to know the people and their reputation. While corruption is issue, Nigeria went through a recent election, and a new president and government was elected on the premise that they will fight corruption.

Other challenges include the fluctuations of the currency. If you want to win a contract, you have to bid in local currency at the risk that you may not get your money back in terms of dollar value. It’s important to consult with your banker or financial partner to limit that risk.

What else should Canadian businesses know?

A personal relationship is the first key asset for building business connections. That’s why direct representation in the country is so important. Nigerians can be less formal when they do business – they like to have fun, so you can expect some humour.

As in Africa in general, your appearance really counts, so dress professionally. Your age and experience also matter and will affect how your offer will be considered.

For more information see EDC Country Information Nigeria or visit Canadian Council on Africa CCAfrica)

See also: Out of … and Into … Africa

Categories Africa

Comments are closed.

Related Posts