By Henry Bellingham, MP/ FCO Minister for Africa
Henry Bellingham MP
The figures speak for themselves. With GDP growth increasing year on year (forecast at seven per cent in 2011), a population of 150 million set to double over the next 40 years, an expanding middle class and rich reserves of natural resources, UK companies cannot afford to overlook Nigeria as a potential business destination.
Nigeria is the UK’s second largest market in Africa (after South Africa), exporting £2.3bn worth of goods and services in 2009. And there are ambitious plans to double this under the Government’s Growth and Prosperity agenda in the next five years.
Indeed, we have a solid foundation from which to trade. Nigerians often look to British goods and services first before considering other countries – thanks to our historic, language and constitutional ties. And with Nigeria’s huge economic potential, coupled with the UK’s rich knowledge base, underpinned by the skills and technology that can support Nigerian growth, in partnership, we can achieve a great deal.
In agriculture, for example, the Nigerian government is keen to attract investment and technical expertise in this largely untapped industry. Nigeria is also home to the most lucrative telecoms market in Africa, which is growing at twice the African average – offering
a wealth of openings for the UK’s ICT sector. Meanwhile the education and training market in Nigeria continues to grow with Nigerians seeking UK standards.
And it doesn’t stop there. Unlocked opportunities can be found across a range of sectors. That’s why I want to see more UK companies reaping the rewards from doing business in this vibrant market. And what could be more opportune a time than now? An Anti-Money Laundering Bill has recently been passed by the National Assembly and the UK bribery Act, which is now in force, will serve to promote a clean and fair business environment for British business.
Last year marked 50 years since Nigeria declared independence and Nigeria is currently a non- permanent member. The country also took over the UN Security Council in 2010, taking over its presidency for a month last year and will do so again this year – testament to Nigeria’s invaluable contribution to international peace and security and to its leadership in Africa and in the wider world.
So how do British companies go about doing business in Nigeria? One way is through UK Trade & Investment (UKTI) – the Government department that helps UK companies do business overseas and supports overseas firms to set up or expand in the UK.
Through its network of international specialists, UKTI can help firms navigate the particular issues that come with accessing markets like Nigeria so that they can achieve their export potential. As well as the hurdles posed by cultural differences, for example, there may be concerns about corruption (Nigeria is ranked 130 out of the 180 countries ranked on the global Corruption Perceptions Index (CPI) 2009); poor infrastructure and costly and unpredictable regulatory processes.
Any compelling business proposition has its challenges, of course, which is why it’s key that firms have access to the right resources and advice, all in one place, when seeking to expand overseas. One of the things we emphasize is the importance of good research. The other thing we emphasize is that support is out there.
It was with this in mind that UKTI and the Foreign and Commonwealth Office (FCO) held two ‘Making Nigeria Your Goal’ road-shows last month (29-30 March 2011) in London and Manchester. These events were designed to present realistic assessments about doing business in Nigeria whilst providing a networking environment for UK firms to connect with potential Nigerian partners.
Aside the big names – Shell, Unilever, Cadbury, Guinness, Standard Chartered and British Airways – which have a presence in Nigeria, the real excitement in recent years has come from finding smaller firms that are making inroads in the country.
Among them are McKinney Rogers, a global business performance consultancy, which plans to open a second office in Lagos by the end of the year and Van Elle, the UK’s leading geotechnical company, which has an office in Lagos.
Meanwhile, British company Angus Fire provide Nigerian firm Capital Oil & Gas with fire-fighting equipment at its new jetty in Lagos, and many people will be familiar with the yellow JCBs – tractors, fork lift trucks and loaders – that are helping to build Nigeria’s new infrastructure.
The construction industry in Nigeria is already a multibillion dollar industry and, according to recent ten year forecasts, was worth US$2.87bn in 2010. Indeed, the UK, with its rich pool of skilled engineers and architects, can help play a key part in Nigeria’s ambitious infrastructure projects – from road construction, housing projects, bridge building to city expansion.
Nigeria’s financial services sector is also rapidly expanding, and the UK, with its wealth of expertise, can play a key role in developments. Nigeria’s banking sector, for example, has gone through significant restructuring over the last decade and continues to do so, yet most Nigerians do not have bank accounts or insurance – so there is an obvious gap in the market. Specific expertise will further be sought in areas such as Islamic banking, pension reform and mortgage products.
Clearly, Nigeria offers huge potential and British companies can play a key part in helping Nigeria realise that potential. And with UKTI’s help, trading In Nigeria can be an experience that is incredibly rewarding rather than incredibly daunting.