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Understanding the Nigerian Business Environment


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A Presentation prepared by Seun Adeogun for Mr. Toyin Y Lasisi 2013

Published in: Economy & Finance
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Understanding the Nigerian Business Environment

  1. 1. ALO-OKI NOVEMBER, 2013.
  2. 2.  The Nigerian investment environment is volatile but embedded with so many opportunities for investors from within and outside.  Though there are challenges mostly in the area of leadership, resources management, security and infrastructure, etc. nevertheless, there are investment opportunities in almost every sector of the Nigerian economy.
  3. 3.  As it is, the Nigeria investment environment is too large to ignore and this is why we have so many Asians and Europeans having huge investment in the nation’s economy.
  4. 4. According to statistics by the Nigerian Investment Promotion Council, Nigeria boast of about 167 million people making her the 8th largest population in the world and 4th largest population under the age of 20. A worthwhile asset!
  5. 5. Can you imagine you starting a business let’s say manufacturing an essential commodity and you having just a little fraction of the total population buying your products regularly?  May be you just have as little as 500,000 people buying your products!
  6. 6. Despite the array of opportunities in Nigeria, there are a lot of bottlenecks to investing in the country’s business environment such problems exist in the area of  Political leadership (Unstable policies, corruption, mismanagement of nation’s wealth, conflicts of interest, etc.) Power supply
  7. 7. Infrastructural deficit High cost of running business Multiple taxation Corruption/nepotism among citizens Demand for foreign goods
  8. 8.  You shouldn’t be deterred by the array of problems that exist in the Nigerian socio-economic environment. Despite some of these bottlenecks identified, people are out there making millions of naira legitimately. You can also be one of such people
  9. 9. Oil & Gas Sector in Nigeria Nigerian oil and gas Industry is said to be the engine of the Nation’s economy. Nigeria practically depends on oil. The Government of Nigeria is been funded with oil revenue. As we all know, Nigeria is one of the world's biggest oil producers. The oil & gas industry is usually divided into two major sectors: upstream and downstream.
  10. 10.  According to Wikipedia, the Downstream Sector commonly refers to the refining of petroleum refining of petroleum crude oil and the processing and purifying of raw natural gas as well as the marketing and distribution of products from crude oil and natural gas.  The downstream sector touches consumers through products such as gasoline or petrol, kerosene, jet fuel, diesel, oils, lubricants, waxes, asphalt, natural gas and liquefied petroleum gas as well as hundreds of petrochemicals.
  11. 11.  The Upstream Sector includes the searching for potential underground or underwater crude oil and natural gas fields, drilling of exploratory wells, and subsequently drilling and operating the wells that recover and bring the crude oil and/or raw natural gas to the surface.  As it is you can only tap into some of the varied production activities in downstream sector given the fact that this is the only are some of us can invest in based on the capital we have at hand.
  12. 12. The Upstream production activities are mostly handled by the multinationals and big investors who have the wherewithal to invest and based on their expertise.
  13. 13. So you can invest or start a business in the area of fuel importation, haulage, supply and distribution (of fuel/kerosene/diesel station), oil and gas installation maintenance and servicing, etc.
  14. 14. The agricultural sector is another viable investment hub for Nigerians in which you are included. This sector can never be ignored in anyway because agriculture is an essential aspect of every society.
  15. 15. Opportunities are open in the area of poultry farming, fishing, cassava, production, snail farming, crop farming, sales and distribution of food products, food products packaging, fruits farming, food processing, catering services, food restaurant business, etc.
  16. 16. With the recent full privatization of the power sector coupled with the huge demand for power in Nigeria, opportunities now abound for business and investment gestures.
  17. 17. The power sector is divided into Generation, Transmission & Distribution. Presently, the core investors are shopping for sub investors who will play active role in the marketing and distribution of power supply across different parts of the nation.
  18. 18. Transportation industry in Nigeria is very viable for business and investment opportunities. Business and investment opportunities such as haulage, road transportation (cargo & commuters), water transportation (commuters & cargo), car wash, importation of vehicles* and spare parts, etc.
  19. 19. A policy by the federal government is in the making to stop the importation of vehicles so you might have to look in the direction of manufacturing, assemblage, marketing and sales.
  20. 20.  The manufacturing sector of the Nigerian economy is one of the previously neglected sectors gradually bouncing back to reckoning.  Though this industry has suffered from neglect, but obviously, as the government tries to diversify the economy, it is working to reinvigorate the manufacturing sector so as to increase its contribution to Nigeria’s prosperity.
  21. 21. The manufacturing sector is therefore another solid investment hub and business area for you. Manufacturing can either be small or large scale but whichever, opportunities abound in the manufacturing of the following: Electric/wire cables, Cement, Pharmaceutical products, Textiles & Garments, Automobiles, Iron & Steel, Furniture, etc.
  22. 22. The real estate sector in Nigeria happens to be one sector that has been proven to be a profitable investment hub in Nigeria with relative returns. As it where, the real estate industry involves the purchase, ownership, management, rental and/or sale of real estate for profit.
  23. 23.  The two viable aspects of Real estate investment are the commercial Real Estate i.e. an aspect that covers the use of properties for business purposes. Such as erecting a building for office and business activities and collecting rent from each business that operates within the structure.  Some of the major categories of commercial real estate include: shopping complex, Ultra-modern malls, event centres, Office buildings, Recreational Centres, Hotels and guesthouse, Restaurants & Fast Food Outlets, etc.
  24. 24. This is whereby properties are being erected for living purposes.  According to ‘Maslow’s hierarchy of needs’ shelter ranks second in the hierarchy of human needs, which is the next most important human need after food.
  25. 25. According to the Nigerian Investment Promotion Council, Nigeria is richly endowed with a variety of solid minerals of various categories ranging from precious metals to various stones and also industrial minerals such as gypsum, kaolin and marble. Much of these are yet to be exploited.
  26. 26. Statistically, the level of exploitation of these minerals is very low in relation to the extent of deposits found in the country.
  27. 27. There are tremendous opportunities for investments in the solid mineral sector in Nigeria. Prospecting licenses for investors (both local and foreign) to participate in the exploitation of the vast mineral resources in Nigeria is granted by the Federal Ministry of Solid Minerals.
  28. 28.  Mineral resources that are present in Nigeria but not yet fully exploited are coal and tin. Other natural resources in the country include iron ore, limestone, niobium, lead, zinc, and arable land.  Agricultural products include groundnuts, palm oil, cocoa, coconut, citrus fruits, maize, millet, cassava, yams and sugar cane. Nigeria also has a booming leather and textile industry, with industries located in Kano, Abeokuta, Onitsha, and Lagos.
  29. 29. Opportunities exist for the exploitation and export of natural gas, bitumen, limestone, coal, tin, columbite, gold, silver, lead-zinc, gypsum, glass sands, clays, asbestos, graphite, and iron ore, among others
  30. 30. There are vast opportunities in other areas of the Nigerian economy such as Consultancy services especially in your industry based on your level of experience and expertise in the maritime related industry.
  31. 31. And not leaving out the Nigerian Stock market. Investment opportunities also abound here. But expert advice and counsel coupled with knowledge of the market is essential to invest in this aspect of the economy.
  32. 32. And other General Service areas such as Consultancy, Dry Cleaning, Retail, Product merchandising, supplies and marketing, Telecommunication, Postal Services, Photography, Security outfit, Tourism/Hotel and Hospitality, Waste Management, treatment & recycling, Entertainment (Talent management, bar, club, pub, etc.)