Nigeria is still, by a slim margin, the biggest economy in Africa, despite the economic woes of the past two years. A population of anything between 180 million to 200 million people makes its consumer market in particular of great interest to investors, manufacturers and exporters around the world. The country manufactures relatively few of the products it consumes and despite efforts to increase local industry, it remains largely import dependent.
In its World Economic Outlook released in early October 2017, the International Monetary Fund (IMF) seems to be more optimistic about the global economy, but there are still many risks that can stall the recovery. It estimates that global growth in 2017 will be 3.6%, and forecasts a 3.7% rate for 2018 and 2019. The emerging market and developing economies will be the main growth engine, with an estimated growth of 4.6% in 2017, accelerating to 4.9% and 5% in 2018 and 2019 respectively.
Growth in the urban population of Africa can potentially lead to a US$1tn regional market for African producers by 2030. Agriculture and food processing are vital for creating this $1tn industry.
Electricity generation and distribution in Nigeria remains erratic. Only 50% of the population have access to electricity, and more than 90 million Nigerians – about the population of Singapore, Malaysia and Thailand combined – are without access to electricity. Access in rural areas is even worse with only 10% of the population having access.
It is undeniable that there is a correlation between a country’s business environment, foreign direct investment inflows and international trade performance. Countries that make setting up businesses easy, allow clearance of goods at ports with little hassle, grant entry and exit visas to investors and visitors alike in quick time, enable the registration of property with little trouble, provide reliable electricity, and make documentation like construction permits easy to acquire, attract more foreign direct investment (FDI).