It is without doubt that apart from regular business and environment related problems, entrepreneurs have to grapple with the security challenges in Nigeria. The activities of the Boko Haram sect have had adverse effect on businesses in the Northern part of the Country and made it tough to keep businesses alive in the region. But despite the security challenges, there are huge economic and investment opportunities in Nigeria. A combination of an improved legal framework, rich human resource of almost 170 million people, abundant natural resources and a productive climate, have made the Nigerian market one of the fastest growing markets in the world, even in the face of her security challenges.
Before crude oil was discovered in Nigeria, agriculture was the pillar of the Nigerian economy. Cocoa was produced in the West, groundnut in the North and palm produce and cassava in the South. These farm produce were produced in large quantities for local consumption and exportation to other countries. Fortunately, there has been an increased awareness on the prospects in positioning agriculture to complement earnings from the oil and gas sector. Nigeria’s New Agricultural Policy centers on increased production and processing of export crops using improved production and processing technologies. The recent Federal Government’s Agricultural Transformation Action Plan (“ATAP“) which focuses on production of rice, cassava, sorghum, cocoa and cotton has given Nigerians renewed hope. The need to create a solid foundation for the ATAP initiative to strive has led to the pending bills on agriculture development before the National Assembly. Nevertheless, poor funding and inadequate information on the modern farming methods are the major impediment in the development of the sector. Nigerian farmers would break new grounds if they get adequate financial support and technical assistance from renowned agricultural operation companies.
Furthermore, as a developing country, Nigeria’s real estate sector is still evolving. For instance, the quest for the Federal Government of Nigeria and the Minister of the Federal Capital Territory to develop Abuja has led to a policy of collaboration between the government and the private sector under the Public Private Partnership (PPP). Under the policy, the government grants a lease over a portion of land to private real estate developers for a stated period, for a nominal fee. The purpose of charging a nominal fee is to encourage real estate developers to develop the leased land in accordance with the Abuja Master Plan over the agreed period and recoup returns on their investment while the government retains the title to the land. The development of the tourism and hospitality sector has also created a huge potential in the hotel and luxury home business. Since there is a prevalence of local expertise, investors may choose to work with established local developers while bringing structure and sophistication into the project. They may also reduce their risk by partnering with local developers with valuable real estate. In such an instance, the investor would benefit from the know-how of the local developer whilst avoiding the intricate issue of the land tenure system.
Notably, the Land Use Amendment Bill (“the Amendment Bill“) before the National Assembly seeks to eliminate the hardship to holders of customary right of occupancy and Mortgagees under the current Land Use Act. Under section 5 of the Amendment Bill, the right of a holder of a customary right of occupancy to alienate such right by mortgage is now recognized. Section 6 of the Amendment Bill dispenses with the consent of the Governor in the creation of a mortgage. The flexibility of the land tenure in the Amendment Bill is a major boast to real estate development in Nigeria.
Generation of adequate power supply has been a bane to the growth of the Nigerian economy. Successive governments have pumped in huge resources into the power sector yet the epileptic power supply has persisted. For instance, 86 percent of businesses in Lagos state, Nigeria’s industrial, commercial and entertainment center identifies poor electricity supply as their most serious challenge. Resorting to self-generation of power by using generators is injurious to human health, the environment and economically detrimental to its users. Hence, the Electric Power Sector Reform Act 2005 and other regulations which led to the deregulation of the power sector by granting licenses to Independent power generating companies is a welcome development. The need to generate power for homes and public institutions, commercial and industrial activities, an integrated public transportation system and a mass housing scheme has led to considerable collaboration between independent power generating companies and the government.
The huge population in Nigeria has made manufacturing a big business. To encourage growth of local and small scale industries, the Federal Government prohibited the importation of certain products listed under the Import Prohibition List. The productions of healthcare, household, food and beverage products are all viable businesses in Nigeria. Foreign manufacturers of products exempted from the Import Prohibition List who do not understand the Nigerian market but wish to break into it may partner with local distributors to promote and market their products.
Moreover, in Nigeria, education is hugely dependent on government funding. With the huge amount of funds required for developmental projects and recurrent expenditure, the percent for education in successive annual budget is abysmal. The consequence of this is the incessant strike by staff of the institutions, exorbitant school fees by private institutions and the poor standard of education in the country. This has led to the exodus of buoyant Nigerian students to seek training abroad. But this does not solve the problem because foreign graduates upon their return to the country may find it difficult to handle local challenges. Thankfully, programs have been set up to equip Nigerian students for the challenges of a growing Nigeria. The Education Reform Act has afforded investors the opportunity to provide affordable localized and qualitative education. This can be achieved by training Nigerian teachers on the modern techniques of impacting productive knowledge while imbibing international best practices. Though more universities have been created, infrastructure deficiencies and limited capacity pose significant problems which offer investors an opportunity for investment.
In the same vein, the current security challenge in the country is in itself an investment opportunity. There is a huge demand for improved security services in Nigeria. As the Federal government rolls out its policies to combat the security situation in the country, individuals and corporate entities are now becoming aware of the fact that security is not the responsibility of the government alone. Hence, the current increase in demand for security guards, bodyguards, executive protection professionals and security gadgets or devices. Investors may choose to setup security guard recruitment or training company, or a bodyguard agency. They may also import and retail security products and safety devices.
Though Nigeria’s security challenge is a problem; business opportunities can arise from it. It is no longer prudent for businesses who wish to break new grounds and increase their profit margin to ignore the Nigerian market. With the mainstay of the Nigerian economy still on crude oil, investors with foresight can partner with Nigeria and Nigerian companies to invest in promising and untapped resources and sectors to expand their businesses while developing the Nigerian market. The Federal Government has made deliberate policies and offered tax incentives to encourage investments in non-oil sectors. The National Assembly has also taken steps to strengthen the legal framework for investments in those sectors in the face of the security challenges in the country. The pain of childbirth should not disrupt the joy of motherhood. The harvest in Nigeria is indeed rich but the laborers are very few!
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