Download NIGERIA

Doing Business in Africa
Cross-cutting presentation on doing business western, eastern and southern Africa
30. August 30 to 2. September 2015
Africa is the second largest continent in the
world with 54 countries, but only 6% of the
world's GDP
Africa facts:
 Second largest
continent in the world
 54 countries in total
 Population of 1.1 billion
projected to grow to
+2 billion by 2050*
 ~50% of the population is under
25 years of age
 Average continental GDP growth of 4,5%
in 2014, but Africa only constitutes 6% of
the world's GDP
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Africa has changed, and today we talk about
trade and not just aid
Africa before…
…and Africa today
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Source: The Economist; Time
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NIGERIA
“The Only Thing That Is Constant Is
Change-”
Heraclitus
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With over 300 tribes, 510 ethnic dialects and a population of
over 186 million people, Nigeria can truly be called a nation
of diversity.
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Plains of the North
Plateaus of the Central
Temperatures in Nigeria vary according to the
seasons of the year as with other lands found in
the tropics. Nigeria's seasons are determined by
rainfall with rainy season and dry season being
the major seasons in Nigeria.
Mountains of the Southeast
Coastal land of the South
UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
Boko Haram
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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
Boko Haram outreach
 Boko Haram home base
– the 3 North Eastern
States
 Borno State
 Adamawa State
 Yobe State
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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
Boko Haram – a Nigerian nightmare
• Unrest started in 2009
• Escalated in 2014 and 2015
• Random killings
• Affiliated with IS in 2015
• Nigerian authorities struggling to cope
• Limited international focus – only paying lip
service!
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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
Security
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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
Corruption in Nigeria
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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
Corruption index 2015 – 168 countries
measured
Rank
1
56
61
107
130
136
139
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Country
Denmark
Ghana
South Africa
Ivory Coast
Cameroon
Nigeria
Kenya
Score 15
91
47
44
32
27
26
25
Score 14
92
48
44
32
27
27
25
Score 13
91
46
42
27
25
25
27
Score 12
90
45
43
29
26
27
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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
Demographic Development
—BY 2015, one fifth of
Africa’s births will take
place in Nigeria—
translating to 5% of all
global births.
- By 2050 the West
African country will
account for almost 10%
of all births in the
world.
- By 2100 nearly 1
billion people will live in
Nigeria.
Unicef’s Generation 2030/Africa
Report
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Political Landscape and Stability
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Amid various fears and speculations following the 2015
general elections, Nigeria witnessed a historic scene in
which an opposition candidate won against a sitting
president for the first time in a democratically contested
election. This came with very high expectations for the
new president to strengthen governance, clean up
corruption, and reverse the spread of the violent
insurgency in the north.
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President BUHARI, elected in March 2015, has
established a cabinet of economic ministers that
includes several technocrats, and he has announced
plans to increase transparency, diversify the economy
away from oil, and improve fiscal management
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But even with the historic peaceful transfer of power,
the new government is immediately faced with a
flagging economy as a result of low global oil prices
made even more severe in the recent months by
unresolved conflicts in the Niger Delta and in the Middle
Belt.
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After 18 months in power - evaluation
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Main Challenges – mid 2016
Currency Peg and Devaluation
Drop in Global Oil Price and Effects
Insurgencies – Boko Haram, Militants,
Community vs Herdsmen Clashes
UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
TC-Nigeria – Food and Agriculture
Sectorial contribution to the Economy
13th largest oil producer
Oil = 95 % of export and 15 % of GDP
Nigeria National Bureau of Statistics
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The Economy
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Following an April 2014 statistical "rebasing" exercise,
Nigeria has emerged as Africa's largest economy, with
2015 GDP estimated at $1.1 trillion.
•
Oil has been a dominant source of income and government
revenues since the 1970s accounting for 90% of the
country’s foreign exchange.
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Drop in global oil prices has led to a decline in government
revenue
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Liquidity has been an issue since a currency peg held at
NGN197-199/USD for the 16 months to June this year
deterring investment and exacerbated the dollar shortages
caused by lower oil prices coupled with vandalism-hit
production
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The CBN in June finally gave in to pressure and removed
the 16-month-old 197-per-dollar peg it had put on the
naira. Trade has been thin and dollar liquidity tight,
leaving the CBN as the main supplier of hard currency.
•
BMI View: ”Despite the poor macroeconomic environment
in Nigeria, we believe that the All-Share Index will see only
modest further losses. Better prospects in 2017 coupled
with greater exchange rate policy clarity will encourage a
return in foreign investors, boosting the index’’
•
Business Monitor International forecasts a real contraction
of 0.8% in 2016 with a more positive outlook on 2017 –
estimating a 4.7% growth of the economy
Appreciation Depends On Investors' Return
Source: BMI
UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
West Africa – more than Nigeria
• Number of smaller countries/economies with
substantial growth
• Ghana, Ivory Coast and Senegal
• Burkina Faso and Mali – challenging
markets, but with MFA/Danida presence
• Sectors
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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
West Africa – Ghana
• Small country – but huge potential
• Easy accessible
• Embassy with focus on both commercial and
danida activities
• Moving from ‘aid to trade’
• Growth adviser – maritime segment - since
2015
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Lagos – Nigeria’s Economic Center
Lagos State: Quick Facts
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Established on 27th May 1967
7th fastest growing city in the world at 5% p.a
Population (2015e) 21million
Population Rank – 1st
Contributes about 30% to Nigeria’s GDP
Consumes more than 60% of Nigeria’s energy
Accounts for 90% of Nigeria’s foreign trade flows
Accounts for 70% of all industrial investments
Generates over 50% of Nigeria’s port revenues
70% of state revenues is internally generated
Lagos recently signed an MoU with Dubai for a
Smart City deal that will see Lagos emerge as the
first Smart City in Africa
Bustling Lagos Metropolis
The Eko Atlantic Project Dream
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Key Sectors in Focus
Agriculture – Dairy & Feed (Fish)
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The dairy sector has emerged the second largest segment in the food and
beverage industry in Nigeria with estimated revenue of N347 billion in
2013 and an estimated compounded annual growth rate (CAGR) of 8 per
cent over the last three years. With demand for milk estimated at 1.7
million tonnes, about 1.2 million tonnes in excess of domestic supply,
which was estimated at 591,470 tonnes. Imported milk powder accounts
for over 75 per cent of the Industry’s input.
The short shelf-life of milk and the absence of the required infrastructure
to operate cold supply chain make it difficult to distribute fresh milk in
commercial quantities, thus, limiting the development of local dairy
farming.
Domestic fish farming is becoming a major farming activity in the south
and the production of local fish feed is not optimal at this time.
UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
Key Sectors in Focus Contd.
Infrastructure
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Cold Chain Development: With the current administrations strategy
on improving agriculture and food production for both consumption and
export market, there is increased urgency and focus on developing and
maintaining proper cold-chain systems for storage and distribution of
such produce. Another such example of the urgent need for this is the
current rehabilitation of the
Nigerian Airports by the federal government through its managing
body (FAN): There is currently an ongoing interest for investment
opportunities in Nigeria airports, for both local and foreign investors.
UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
Eko Atlantic
Eko Atlantic is an entire new coastal city being built on
Victoria Island adjacent to Lagos, Nigeria, to solve the
chronic shortage of real estate in the world’s fastestgrowing megacity. It is a focal point for investors
capitalising on rich development growth based on
massive demand – and a gateway to emerging markets
of the continent. Designers Eko Atlantic have also
included the construction of a power plant of 70
megawatts (MW) with production capacity may be
increased up to 1.5 gigawatts as and as the island will
develop. The management of different infrastructures of
Eko Atlantic will be fully entrusted to private companies
Lagos Renewable Water Transportation
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Transportation in Lagos is essentially road based. The
high population, coupled with the lack of infrastructural
expansion to cope with the increasing population, often
result in heavy traffic congestion within the city
Most importantly, the existing public transport system in
Lagos is grossly inadequate and therefore unable to meet
present and future travel demand of citizens.
The cost of doing business in Lagos highly expensive and
sometimes prohibitive. It is estimated that Lagos State
lose N250b to traffic annually
The Lagos State Government which has restated its
commitment to improve and sanitize the water
transportation system safe and efficient movement of
people and goods wants to achieve this through PPP.
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Eko Atlantic May, 2016
UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
Eko Atlantic – May 2016
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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
Key Sectors in Focus
Power Generation and Supply
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With a current peak generation of less that 3,000MW and a demand of about
12,800MW, Nigeria is a strong market for renewable solutions. This also includes the
government's encouragement of localised smart metre production/assembly
With the strong focus on developing and improving revenues from industrial estates,
and the big deficit in sustainable power, there is some potential for investors here
Germany and the US are quite active in this sector
Nigeria has enormous solar energy potential, with fairly evenly distributed solar
radiation averaging 19.8 MJ/m2/day-1 and an average of six hours of sunshine a
day. The assumed potential for concentrated solar power and photovoltaic generation
is around 427,000 MW. According to estimates, if only 5% of the suitable land in
central and northern Nigeria was designated for solar thermal use, this would provide
result in theoretical generating capacity of 42,700 MW.
Wind energy potential is very modest, with annual average speeds of about 2.0 m/s
in the coastal region and 4.0 m/s at heights of 30m in the far north of the country.
Nigeria’s biomass resources mainly comprise crops, forage grasses, shrubs, animal
waste and waste from forestry, agriculture, and municipal and industrial activities.
Crops such as sweet sorghum, maize and sugar cane are the most promising
feedstocks for biofuel production. Estimates put the daily production of animal waste
in Nigeria at about 227,500 tonnes, which could produce about 6.8 million m3 of
biogas
ICT
The new generation’s path to discovery
Nigerian youths are beginning to
take their destinies into their own
hands.
They are currently making strides in
services, innovation and
entrepreneurship like most other
youths around the world.
One sector which has seen the
positive effect of this is the IT
sector.
Drawing from statistics of Nigeria’s
rebased GDP figures, information and
communication technologies (ICT) and
its sub-sectors are key drivers of
Nigeria’s impressive economic growth.
And more interestingly, the major
players in this tech-shift aren’t
foreigners but Nigerians at large. They
have taken the bulls by the horns,
cashing in on the fortunes of IT driven
businesses, and contributing
immensely to economic and
infrastructural development, job
creation and youth empowerment.
CEO of Konga;
the largest E-commerce business in Nigeria
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Mark Essien CEO & Founder of hotels.ng;
Nigeria’s Nr1 hotel booking platform
In Nigeria, the IT sector currently
contributes 8.7 percent to GDP,
according to figures from the country’s
ICT Ministry, an equivalent of N6.97
trillion ($44.3 billion) out of the total
rebased Gross Domestic product (GDP)
of N80.22 trillion ($510 billion). With
these innovative ventures seeing
largely positive returns, with regards to
profit taking, rapid market expansion
and overall development, the figures
above are expected to hit double digits
within the next decade.
Oluyomi Ojo Founder/Chief Executive Officer of Nigeria's first online
digital print shop, Printivo.com.
UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
New Forex Policy Update
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The Central Bank of Nigeria has ordered Deposit Money Banks and other authorised dealers in the
foreign exchange market to allocate 60 per cent of total their total forex purchases from all
sources (interbank inclusive) to manufacturers and end users strictly for the purpose of
importation of raw materials, plant and machinery.
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9 Nigerian banks banned from access to forex
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Indication that the central bank is trying to show responsibility and try to curb corruption
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The Chinese…..
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UDENRIGSMINISTERIET, MINISTRY OF FOREIGN AFFAIRS OF DENMARK
Upcoming Exhibitions
A number of exhibitions which have been well received in the past
The 2016 WAPIC comes at a time when the regional power industry is
facing many challenges, consequently it aims to showcase solutions. It is
quoted that doubters don’t overcome challenges, but innovators and
entrepreneurs find opportunities and solutions.
23 – 25 NOVEMBER 2016
Now in its third successful year, Agra
Innovate West Africa is widely recognised
as the region's leading crop production,
processing and manufacturing tradeshow,
connecting suppliers from some twenty
different countries across four different
continents to serious local buyers and
business partners
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7 - 9 December 2016
Danish Agriculture & Food Council in cooperation with
the Trade Council in Lagos, , Danish Seafood
Association and the Confederation of Danish Industries
are pleased to invite companies to participate in Nigeria
Manufacturing Food in Lagos at the Landmark Centre,
Lagos, Nigeria.
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Contact information for the trade office in
Lagos and the embassy in Accra
Do not hesitate to contact us if you want to hear more about
the business opportunities in Nigeria or West Africa
CONSULATE GENERAL OF DENMARK,
LAGOS
EMAIL: [email protected]
EMBASSY OF DENMARK, ACCRA
EMAIL: [email protected]