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The “Giant of Africa” has enjoyed sustained economic growth for a decade with annual growth averaging above 6 %. Nigeria is now Africa’s largest economy with a GDP of $ 568.5 billion per year. This robust growth faces challenges, including insecurity, falling crude oil prices and exchange-rate volatility. The Government of Nigeria is focusing on improving the business environment by reducing corruption, increasing security and strengthening monetary policy.
Non oil sector grows
The economy is diversifying and the non-oil sector becoming the key driver of growth, with expanding financial, aviation, service, communications and entertainment sectors. Its emergent manufacturing sector is the third largest on the continent, producing a significant proportion of goods and services for the West African region. There is a strong focus on agriculture and agri-business.
Some of the more prominent growth sectors with opportunities for companies are:
Internet and telecoms: The total number of active telephone lines in Nigeria stood at 149.24m at the end of Q1 2017, according to recent data released by the Nigerian Communications Commission (NCC). Sector leader MTN Nigeria continues to dominate the Nigerian telecoms market, followed by Globacom, Airtel, and Etisalat. Nigeria is Africa’s leading ecommerce market and the largest internet market on the continent as well. There has been a steady increase in the adoption of mobile and internet banking solutions in the country. It is projected that the number of internet users will grow from 69.1 million in 2016 to 93 million in 2019. At the moment, internet penetration is estimated at 53%. Creating coverage and bringing value-added services is a major challenge/opportunity but Irish companies already active in the communications sector.
Financial services: Nigeria has some of the continent’s largest banks by assets, including Zenith, First Bank, GT Bank, UBA and Standard Chartered Bank. Zenith Bank and GT Bank dominate in the wider West Africa region. While the sector is well regulated, only 28.6 million adults, representing 32.5% of the population have bank accounts. Cashless applications, mobile banking and software in general are in high demand by the leading banks.
Construction: Nigeria is in the top 3 of the biggest construction markets in the world. Continued growth in oil and gas, hospitality, retail and power sectors will drive demand for construction activities. Nigeria currently needs 20 million new houses, as well as commercial constructions and large-scale infrastructure projects including around the major airports.
Education & training: factors including insufficient capacity leads to opportunities for international educational institutions interested in establishing in Nigeria or in attracting Nigerian students abroad. Significant opportunities also exist in vocational training.
Other sectors with great potential include health care, mining, logistics, oil & gas, hospitality and power.