Emerging Market GrowthEmerging Market Growth--Executive InsightsExecutive InsightsA Real World Look into the Opportunities...
Strong Economic Growth Continues in Sub-SaharanAfricaNigeriaKenya0123456789GDPGrowth(%)GDP Growth, Select Developed, Emerg...
CAUTION: Abundant Opportunity Ahead
Political Considerations• Political instability declining – providingmore opportunities and opening newmarkets• 15 active ...
The Key to Sustainable African Growth - BeneficiationThrough technology development and financing beneficiation, centres c...
Nigerian Government Development Initiatives - Vision 20:2020The economic planning initiative targets specific sectors for ...
Infrastructure SectorTotal Investment($ Million)Road 6,480.0Rail 6,400.0Airports 550.0Ports 6,000.0Current and Future Inve...
Concluding Remarks• Nigeria is a formidable force in Africa and its relative importance is due to its increase in wealth• ...
For Additional InformationAngie MontoyaGlobal Webinar Marketing CoordinatorNorth Americaamontoya@frost.comSamantha JamesCo...
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What will it cost to do business in Nigeria?

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Africa’s most populated country, Nigeria, is growing at a significant pace, with GDP levels exceeding those of more developed African countries. This presents great opportunities for investment into Nigeria. However, the economy, which is highly dependent on oil production, may present significant challenges to businesses wishing to enter the market.

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What will it cost to do business in Nigeria?

  1. 1. Emerging Market GrowthEmerging Market Growth--Executive InsightsExecutive InsightsA Real World Look into the Opportunities inA Real World Look into the Opportunities inAfrica’s FastAfrica’s Fast--Growing Economic Powerhouse,Growing Economic Powerhouse,NigeriaNigeria
  2. 2. Strong Economic Growth Continues in Sub-SaharanAfricaNigeriaKenya0123456789GDPGrowth(%)GDP Growth, Select Developed, Emerging Countries and Sub-Saharan Africa, 2012-20142GDP Growth 4-6% (2013)GDP Growth >6% (2013)GDP Growth 2-4% (2013)MozambiqueAngolaSouth AfricaEstimated GDP Growth20142012 2013 2014Growth Drivers• Robust domestic consumption and demand• Angolan oil expansion• Nigerian power sector reform• Resource-rich economies and beneficiationSources: IMF and Frost & Sullivan analysis
  3. 3. CAUTION: Abundant Opportunity Ahead
  4. 4. Political Considerations• Political instability declining – providingmore opportunities and opening newmarkets• 15 active wars in 1990 to only 5 in 2010TradeEffects of the Financial Crisis• Direct effect of global financial crisis in 2009 and 2012on African banks was relatively small - because of their lowdegree of financial integration into global markets• The major impacts were the collapse of commodityprices, declines in workers remittances, declines in FDIand a fall in export volumes• Commodity prices have rebounded boosting exportvaluesAfrica’s Economic ResilienceMost of Africa’s financial markets remain relatively unaffected by the 2012 Euro Zone crisis4Source: International Trade Commission and Frost & SullivanEconomic Growth• Growth is highest in eastern Africa(approximately 8.2 per cent), followed bysouthern Africa (6.7 per cent), western Africa(5.5 per cent), north Africa (5.4 per cent) andcentral Africa (4.9 per cent)• During the pre-crisis period (2005-2008), oil-exporting countries achieved the highestgrowthTrade• Approximately 80.0 per cent of Africa’sexports are oil, minerals and agriculturalgoods• The EU and US receive nearly two-thirds ofall exports• Intra regional trade is low – 10 per cent oftotal African trade• As global oil and commodity prices rise,Africa’s terms of trade will improve
  5. 5. The Key to Sustainable African Growth - BeneficiationThrough technology development and financing beneficiation, centres can be created that willincrease the value of the exported goods by 5 to 10 times the raw material priceGhana is Africa’s secondlargest gold producer with nogold refining capability. It isexpected that Ghana willbecome the gold refiningcapital of West AfricaNigeria and Angola are the twolargest exporters of oil in Africa.Mozambique has the potential tobe one of Africa’s largest sugarZambia is Africa’s largest copperproducer. Copper is mostly exported inbulk format after basic refinement. Anumber of companies are currentlyinvestigating the potential for copperproduct manufacturing in ZambiaTop Countries on the Continent That Will Benefit From ResourceValue Add Activities, Africa, 20125largest exporters of oil in Africa.Yet they import most of theirrefined product. These countrieswill grow their value throughpetrochemical beneficiationSouth Africa is the world’s largest platinumproducer but has limited platinum catalystmanufacturing capability. With a strongAutomotive industry located in SA, there issignificant opportunity for PlatinumbeneficiationBotswana is a major producer ofraw diamonds. However, very littlevalue is added to the stones priorto export. Botswana is currentlydeveloping a polishing industrybe one of Africa’s largest sugarcane producers, and the countryis actively investing in bio-fuelcapability to beneficiate thisenergy resourceSource: Frost & Sullivan analysis
  6. 6. Nigerian Government Development Initiatives - Vision 20:2020The economic planning initiative targets specific sectors for investment and development through policyStimulation of domestic and foreign trade to optimizeproduction activities• Informal and dominated by simpletechnologies• Crop production accounts for 90%of agricultural production• Promotion of technology to improve yield• Focus on agro-processing• Strong policy focus on improvementof health• Provision is made for private publicpartnerships to provide healthcare6Nigeria, Vision 20:2020partnerships to provide healthcareservices• Local manufacture of pharmaceuticals andvaccines in Vision 20:2020• Strong policy focus on increasing manufacturing to create greater economic diversification• Policy is targeting the establishment of industrial zones, economic clusters and incubatorsPriority sectors in Vision 20:2020• Chemicals and pharmaceuticals • Non-metallic mineral products• Basic metal, iron and steel andfabricated metal• Food, beverages and tobacco• Textiles, wearing apparel,carpet, leather/leatherfootwear
  7. 7. Infrastructure SectorTotal Investment($ Million)Road 6,480.0Rail 6,400.0Airports 550.0Ports 6,000.0Current and Future Investment by Key Projects, Nigeria,2012Transport42.8%Water and Sanitation1.5%Social 18.4%Percent of Current and Future Investment in KeyProjects by Sector, Nigeria, 2011Infrastructure - InvestmentUS$45bn has been allocated to developing infrastructure across the priority initiatives andindustries7Ports 6,000.0Energy and Power 12,010.0Telecommunications 4,900.0Water and Wastewater 663.3Housing 414.4Healthcare 4,190.0Education 3,742.9Total 45,350.6Source: Frost & Sullivan analysis*Transport: includes Road, Rail, Airports and PortsEnergy and Power26.5%Telecommunications10.8%*Social: Includes Housing, Healthcare and Education
  8. 8. Concluding Remarks• Nigeria is a formidable force in Africa and its relative importance is due to its increase in wealth• The economy is still one sided, middle class is struggling to derive opportunities outside of oil andgas• Government has indicated the desire to interact with private sector participants, reform currentregulations and stimulate private partnerships in the infrastructure sector• New developments in the power sector may provide significant opportunity for private entrants todistribution• With the largest mobile subscriber base in Africa , significant investment and potential exists in theinformation and communication technology (ICT) sector8Key success factors include:• Government involvement is a critical component to corporate success• The first- mover’s advantage is critical. Market pioneers have the advantage of lobbying with theGovernment and introduce favourable trade policies- even influencing imports• Use local partners to help guide you through the Nigerian markets- this is especially adopted in thechemicals market• Logistics is key- the ability to deliver a product on time cannot be over stated so some companiesprefer to keep logistics in house. Example: Heineken, Guinness• Local content promotion or sourcing locally is critical for Government buy-in
  9. 9. For Additional InformationAngie MontoyaGlobal Webinar Marketing CoordinatorNorth Americaamontoya@frost.comSamantha JamesCorporate CommunicationsSouth Africasamantha.james@frost.com9Sathyajit RaoVice PresidentEmerging Market InnovationSathyajit_Rao@frost.comPrerna MohanIndustry ManagerEmerging Market Innovationprerna.mohan@frost.com
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