Nigeria is fashionable. It’s the “N” in the MINT countries – the next high-growth markets. As you may remember, earlier this year Nigeria was declared the largest African economy. It surpassed South Africa for the first time.
A recent survey by KPMG on High Growth Markets Outlook reveals that Nigeria – along with Kenya – is beginning to appear in the radar screen of companies looking for international growth opportunities. More companies are planning to invest there this year than there were in total last year.
According to that KPMG report,key industries in Nigeria include petroleum, food, telecom, retail, clothing, chemical, construction, and shipbuilding. Some of these industries are driven, clearly, by demographic growth: last year, more children were born in Nigeria than in Europe as a whole (any doubts about where the future lies…?). In particular, the middle class is expanding: it’s estimated to be 52M (about 30% of the total population), and they live on $6-10/day.
A considerable barrier for companies wishing to tap this growth is competition for talent. In my visits to Nigerian companies, one of the things that caught my attention was their investment in developing talent, which at times they lose to competitors.
In addition, Nigeria is still perceived as a challenging country to enter in comparison to other high-growth markets. I’ll talk about some of these challenges in future posts.
On a different note: last week, I wrote about Ebola and malaria. At the moment I’m attending the annual meeting of the Strategic Management Society (SMS), which is taking place in Madrid. Some American colleagues have told me that they won’t visit Africa until the Ebola scare has gone away. Even if I tell them that there’s no risk in going to East Africa and other countries, they remain unconvinced. To me, this is one more sign that we still think of Africa as “one,” and that we do not have a good sense of its vast size!