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Nigeria is the most populous country in Africa and is the largest economy in sub-Saharan with a GDP of 521 billion USD. It has huge oil and gas reserves, and thanks to economic reforms has recorded high single-digit economic growth in recent years. Growth has slowed somewhat in the meantime, in particular due to lower crude oil prices and political instability in the wake of the civil war waged by terrorist group, Boku Haram.
The solid economic growth in recent years (6 to 8 per cent) was due to the positive developments in the banking, telecommunications and agricultural sectors, in addition to high oil revenues. However, due to a fall in crude oil prices, budget deficits have arisen. This is mainly due to the government’s high dependence on oil revenue which covers 70 percent of the country’s expenditure.
Since Nigeria exports crude oil primarily, the trade balance is highly dependent on the development of oil prices. Among the most important trading partners are China, USA, India, the countries of the European Union (especially the UK, France, Spain, Germany), Brazil and South Africa. China remains at the forefront among major countries that Nigeria imports from. Meanwhile, India has overtaken the US as the main buyer of Nigerian crude oil. Main imports of Nigeria are machinery, vehicles, chemical and electrical products.
Why invest in Nigeria?
- Nigeria’s huge size and attractive positioning in Western Africa allows the country to be a regional communication and economic hub.
- Exchange control regulations have been liberalized in recent years and thus Nigeria allows a free flow of investment for foreign businesses.
- Nigeria offers the largest domestic market in the sub-Saharan region with 120 million people. The country also has a growing middle-income segment.
- Ecommerce is booming in the country with the rapid development of communication infrastructure over the past few years.
- Nigeria has a wealth of economic resources, both natural and pertaining to workforce.
- Nigeria offers a streamlined entry for foreign businesses with administrative and bureaucratic procedures having being markedly relaxed over the years.