The rise of new markets paves the way for new business opportunities, but it also involves a balanced and reasoned approach in relation to the context. The case of Nigeria is exemplary. A complex market but one that can be advantageous for Italian companies. Nigeria has, rightly, embarked on the path of diversifying its economy, as it has realized that without the creation of a productive economy of goods and services, it would not be able to reach those levels of partial self-sufficiency that make it progressively less dependent on the oil and gas sector.
Among the driving sectors of the Nigerian economy, we consider agribusiness, which is an important piece on the agenda of the Ministry of Agriculture as its modernization would attract new investments. It would represent a boost for both local consumption and exports.
Nigeria represents the largest market in Africa with a GDP in 2021 of US$440 billion. In terms of the long strategy, the National Integrated Infrastructure Master Plan (NIIMP) envisions investments worth US$2.9 trillion over 30 years for the expansion of the regional road network, increased energy production and extension of the grid including natural gas infrastructure, reduction of the housing and social infrastructure deficit, as well as increased schools and hospitals.
Through the plan launched by the government, Nigeria’s National Development Plan 2021-2025, investments in infrastructure, science and technology are encouraged to boost new sectors. Thus opportunities are emerging in Building&Construction and investments are increasing, mainly from the U.S. and China, thanks to important drivers such as availability of raw materials and low labor costs.
Packaging is becoming another growth sector to invest in, driven by the automotive, packaging and construction industries.
In line with the national development plan, the mining sector is also attracting investment. The government has launched a national plan that would aim to accredit artisan miners and strengthen gold reserves.
During the October 20, 2022 Italy-Nigeria Business Forum at Assafrica, emphasis was placed, as early as the opening speech by Nigeria’s Ambassador Mfawa Omini ABAM, on the priority of investing in non-Oil sectors. Indeed, the government is implementing a series of policies aimed at encouraging investment in other business areas that will drive the Nigerian economy. New sectors to focus on include IT, Telecommunications, Consumer Goods, Agriculture, Manufacturing, Hospitality, Entertainment, Automobile, and Building&Construction.
As Minister Katagum (Minister of State, Industry, Trade and Investment) also pointed out, they expect a promising future for the Nigerian economy, along with strong population growth and more investment and development. With this in mind, the value of the private sector in supporting the economy is recognized.
Among the points highlighted during the Business Forum was a growing middle class and young population, a skilled workforce, and continuously modernizing infrastructure. Emphasis was also placed on the technological development taking place in Nigeria and an increase in so-called online shoppers.
Another opportunity not to be underestimated for investment are Smart Cities. So also in Nigeria the Eko Atlantic project is already seeing the first buildings coming up. This project is based on the synergy of different sectors with a view to sustainable development, relying on technology and data sharing.
For Italy, Nigeria represents the main trading partner in the sub-Saharan region. In particular, it is the second largest destination market for Italian sales after South Africa. In fact, Italian entrepreneurship and Made in Italy are highly valued by Nigerians. The products that have potential in the Nigerian market are machinery for agriculture and mining, to furniture, building materials, textiles, automotive and the food industry. In addition to these sectors, opportunities have already been mentioned in hydrocarbons, construction, housing, electronics, catering and services.
Finally, let’s take a look at the overall values of Nigerian imports: they will rise from 48 billion euros in 2020 to 63 billion in 2021. Thanks to SACE’s contribution, we can say that looking ahead, despite the current uncertainties due to international politics, Italian exports to Nigeria are set to grow by 5.7 percent next year.
For more insights into the country, we invite you to download the Guida Paese Nigeria produced on commission by Regione Lombardia and Unioncamere Lombardia by Roncucci&Partners. The publication contains specialized information and firsthand accounts from key players to render as accurate as possible of what it means to do business in Nigeria today.
Chiara Capraro e Giacinta Acerbi