A market of 200 million people, Nigeria has the largest population and economy in Africa and is projected to grow to 264 million by 2030, becoming the third most populous country in the world by 2050. It is also blessed with abundant natural resources, significant oil and gas wealth, and a very young population with a median age of 18.
- A middle class (around 25 per cent of the population) means a market of 50 million people with substantial spending power. With this consumer spending power forecast to grow at six per cent per annum this decade, Nigeria presents immediate opportunities for Australian exporters of consumer goods, particularly food and beverage and healthcare products. Several medium to large Australian companies have begun exploring this market over the past year.
- The commercial capital of Lagos has the third highest level of consumer spending of any city on the African continent (US$34.7 billion in 2020), behind only Cairo and Johannesburg. It is far and away the largest consumer market in West Africa, with Nigeria’s political capital Abuja (US$9.2 billion in 2020) in second place in the West African region and also top 10 on the continent.
Nigeria’s reputation as a difficult place to do business has discouraged the exploration of trade and investment opportunities, and it is true that there are real challenges for exporters. But Nigeria’s cultural exports are starting to change general perceptions of the country and for companies willing to make the effort and take some risks, the rewards are significant.
A growing tech sector and creative ecosystem
With proud traditions in literature and music, Nigeria has long been recognised as a cultural hub in Africa. And a dynamic and entrepreneurial youth are gradually changing Nigeria’s image by making international waves in fashion, film, music, gaming and tech – and monetising these digital opportunities. The Australian tech ecosystem could do well to engage and we are happy to assist our startups and tech hubs making contact with their Nigerian counterparts.
- One of the most positive business stories coming out of Nigeria is its burgeoning IT sector. The industry has strong regulatory support. The Nigerian government has sought to rebuild digital trade from the ground up, with Africa-leading data privacy provisions. A new generation of local entrepreneurs is seeking to grow the sector with international support.
- Fintech start-ups have attracted investment dollars and there have been some notable successes, such as Flutterwave and Paystack. With a young population accustomed to smartphones and mobile payments, and more than 60 million people without a bank account, there are substantial growth opportunities in this sector.
- Payment solutions currently dominate the Nigerian fintech ecosystem of more than 200 companies, but there are increasing opportunities in consumer lending, insurance and asset management. Beyond Fintech, the Nigerian software market is estimated at over US$10 billion and enterprise software in fields ranging from health to cyber security is in demand.
- Today, Nigerian fashion designers are gaining prominence internationally, many Nigerian musicians are topping charts in the UK and USA, and the country hosts the second most prolific film industry in the world, Nollywood, which is gaining a following globally despite its low production budgets. As with Bollywood, this is likely to change as the industry matures, presenting further opportunities for the Australian creative sector.
A thirst for knowledge
Nigeria is one of the fastest growing student recruitment markets in the world, with 90,000 Nigerians studying overseas before the pandemic. Nigerian student numbers to Australia have been on the rise, in a market dominated by the UK and USA. It will remain a high-growth market after the COVID recovery.
- While our borders remain closed, Australian online offerings including our high-quality higher education and VET courses provide new opportunities beyond traditional student recruitment. Young Nigerians (and their parents) value education highly and have shown a large appetite for online learning and micro-credentialling courses.
Supporting infrastructure development and energy transition
Nigeria’s industrialisation has been a stop-start affair in recent decades with dynamic periods of high growth matched by slower spells. There is still an enormous amount of infrastructure required in energy, transportation and agricultural production as Nigeria develops.
- The slow burn industrialisation and modernisation of the country presents ongoing niche opportunities for small and medium-sized Australian exporters, who have enjoyed export success in Nigeria with products as diverse as solar technology (off-grid power solutions are enjoying increasing interest), metal detectors, electrical transformers, and parts for oil refineries.
- Australian innovation and experience could support Nigeria’s energy transition. Equipment for the oil and gas sector remains in demand, especially as Nigeria ramps up its transition to gas for its domestic energy needs.
- There are opportunities in agtech and medtech too. In the agricultural sector, there is demand for food processing equipment, storage solutions, logistics and livestock and land-management expertise. Nigeria is seeking to expand agriculture, and modernise the sector, while deconflicting competing land-use claims by different community groups. There is also a substantial market for medical equipment and diagnostics.
A high potential mining and METS sector
Nigeria’s mining sector is largely undeveloped but has great potential. Ongoing geological mapping projects funded by the World Bank are delivering very encouraging data.
- In the meantime, there is an existing market for small-scale mining equipment and there will be further opportunities in METS as the industry develops. In 2020, Nigeria opened its first gold refinery and the country’s first fire assay laboratory was established in 2021.
- Australia’s METS companies can also play a positive role in organically introducing world-class METS standards and practices into West Africa, benefiting the region as well as Australian METS companies in the future.
- Toronto-listed Thor Explorations is due to pour its first gold in June and is on track to become one of the first commercial-scale internationally operated mines in Nigeria. This could catalyse more juniors to join the Australian companies already on the ground here and working towards production.
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Nigeria market insights