4 Misconceptions about doing business in Nigeria

4 Misconceptions about doing business in Nigeria

There is a general misconception amongst the international business community that Nigeria is a “no-go area” when planning market entry strategy to new frontier markets. This article hopes to challenge myths and question what most people associate with Nigeria and its market potential. I almost hear you thinking that the negative stories surrounding Nigeria are fact-based. But stick with me for a moment.

What most people associate with Nigeria

A poor country – Reports suggest that Nigeria is poor, with over 70 million people (about twice the population of California) living in extreme poverty. However, the situation is not as simple as it may seem. Nigeria is the largest economy in Africa, with a GDP of $441.5 billion (about $1,400 per person in the US) in 2021. The economy of Lagos, the country’s financial hub, is said to be larger than Ghana and Kenya combined. I know that there is a lot to take in but bear with me.

Oil is the focal point of the economy

In a comparable manner, another misrepresentation worth mentioning is Nigeria’s oil industry. Many believe that the oil & gas industry is the focal point of the economy. On the contrary, oil & gas contributes less than 9% of GDP. Let me elaborate. The key contributors to the economy are the agricultural sector (25.08% of GDP), trade sector (16.86% of GDP,) and the real estate sector (6.85%). There is also significant growth in the financial services, telecommunications, and entertainment sectors.

 

Moreover, the Nigerian economy recorded a seventh consecutive quarterly growth in the second quarter of 2022 as real GDP expanded by 3.54% year-on-year, an improvement compared to the 3.11% growth recorded in the previous quarter. To put this growth into perspective, the G20 GDP Growth fell by 0.4% in the same period.

E-mail fraud

A further reason business delegations tend to shy away from Nigeria is the perceived menace of scammers. In my brief research for this article, I discovered that Nigeria was not considered a top destination for online fraud. And that begs the obvious question. Why is Nigeria perceived as a fraudster haven? I believe it could be owing to negative publicity over many years. You see my point, right?

 

Nigeria has a young, vibrant, highly educated, and highly entrepreneurial population. Despite the challenges of the pandemic, over 100,000 Nigerian students enrolled in prestigious universities abroad in 2020. The current figures are astronomical. You will find Nigerians excelling in various fields. Case in point, did you know that the Founder & CEO of scheduling software company Calendly is a Nigerian? Did you know that a Nigerian owns Five airports in the UK, including London Gatwick Airport worth over £1.5 Billion?

Difficult place to do business

It is often said that Nigeria is a difficult country to do business in. Let me lift the veil for you. Issues such as a hostile business environment, difficulty finding competent staff, poor state of infrastructure, and lack of reliable information and data. Although this may be true in some circumstances, fortune favours the brave. Multinationals such as; Chevron, Exxon Mobil, MTN, Nestlé, Total, Unilever, Diageo, and Cadbury have done business in Nigeria for decades with outstanding results to show. Those who take risks often reap great rewards; those who are courageous are often the most successful.

Conclusion

The popular narrative peddled about Nigeria has been stereotypical for so many years. Nigerians have been portrayed as victims of corruption, poor leadership, poverty, diseases, conflicts, and many other vices. While the truthfulness of these description is debatable, many Nigerians home and abroad have shown that there is much more to the West African nation and its people than the often-peddled stories. From technology to entertainment and academia, Nigerians have contributed positively to their host communities and made a difference where it matters.

 

There is a dichotomy between what you hear about Nigeria and what you experience when you come to visit. There is a reason Nigeria has the highest number of billionaires in the African content. Come! Let us change the narrative and achieve remarkable things in Nigeria together.

 

For more information about doing business in Nigeria? #AskAMENA!

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