On average, news stories about Nigeria are typically negative. Despite the country's problems, it has proven to be a magnet for companies and investors. Its natural resources, skilled workforce and robust economy make it ideal for investment. Unfortunately, underdeveloped infrastructure and corruption make doing business difficult. Nevertheless, investors continue to see profits in Nigeria.
Nigeria is primarily known as an oil producer. However, the country is rich in many other resources that are yet to be exploited. Sectors such as agriculture, mining, semi-precious and precious stones and other resources have taken a back seat to the petroleum industry. These present opportunities for investors.
The Nigerian economy is the third-largest in Africa and the largest in the West African region. Despite the global downturn, Nigeria's stock market performance is considered one of the strongest in the world in 2010. Additionally, the country is expected to see a GDP increase of 7.53 percent in 2010, one of the highest in the world. These factors are key indicators of a robust economy that is good for business.
As of 2010, Nigeria is believed to have about 150 million people. The country's large population means that businesses are not short of customers. The telecommunication sector, for instance, expanded by 34.2 percent in 2009, an increase spurred by customer demand.
Desire For Foreign Investment
The Nigerian government recognizes that foreign investment is key to the country's development. Thus, it offers incentives to investors that use local materials and hire citizens. Investors can obtain "Pioneer Status," which affords a tax holiday for qualifying companies. A break from taxes means more profits for investors. The country actively courts investors from around the world to invest in many key sectors.
Although Nigeria is one of the world's largest oil suppliers, the country's infrastructure is underdeveloped. The roads connecting the country's regions are bad, making transportation of goods difficult. Even more crucial is the country's epileptic power supply. Nigeria's power stations are in bad shape and in some cases, pipelines leading to power stations are either not maintained or vandalized.
Nigeria has been ranked as one of the most corrupt nations in the world. In fact, it lost more money to graft than any other country in the world between 1970 and 2008. However, over the last eight years, the country's anti-corruption agency has worked to discourage corruption by arresting and prosecuting offenders. Unfortunately, corruption remains an issue that increases business costs and limits efficiency.