Why should I invest in Nigeria?
Nigeria may be better suited for experienced exporters rather than early-stage start-ups since it requires significant time and resources. However, despite challenges, not least of which is the possibility of carrying a loss for a few years, there are certainly rewards to be made for the experienced and intrepid investor.
Since 2005 Nigeria has been considered to be among the "Next Eleven": the countries identified by Goldman Sachs investment bank as having a high potential of becoming, along with the BRICS, the world's largest economies. The growth is driven by a population of 193.4 million (2016 National Bureau of Statistics estimate) - growing at over 3% per annum - and by an affluent and an increasing middle class. The "cosmopolitans" (higher middle class) and the affluent, together 10% of the population or 17 million people, account for 40% of total consumption. Another 21% of the population, or 36m people, could be considered "rising strivers!" and are therefore of interest to multinationals. About 65% of the Nigerian population is younger than 25 years.
Nigeria has consistently been ranked as one of the top three destinations for foreign direct investment (FDI) in Africa over the past decade until 2014, with Nigeria's FDI stock reaching 98.73 billion in 2016, a 3% increase from 2015. While most of the investment is directed at the oil & gas sector, FDI flows are diversifying.
Nigeria has introduced a number of incentives to assist foreign investors. The Nigerian Investment Promotion Commission Act ensures that investors can repatriate 100% of profits and dividends, and that 100% ownership of companies is allowed in all sectors apart from oil & gas. (While there are no restrictions on repatriating money for foreign entities, there are restrictions if all directors are Nigerian). Other incentives include a favourable Companies Income Tax, Pioneer Status Grants, Free Trade Zones and tax relief for research and development. A full list of government incentives can be found on the NIPC website.