Nigeria’s emerging market presents both opportunities and challenges for businesses. The country’s heavy reliance on oil production and export has made it vulnerable to fluctuations in global oil prices, leading to challenges such as a decline in government revenue and negative effects on the country’s GDP.
The lack of investment in downstream industries has further compounded the impact of oil price volatility on Nigeria’s economy. However, the country’s emerging market also presents opportunities for businesses, particularly in the areas of infrastructure development, transportation, and tourism. The government’s focus on infrastructure investments, including upgrades and repairs to roads, the airport runway, and the wharf, can create opportunities for businesses in construction, transportation, and related services.
The government’s efforts to attract skilled labor back to the country, such as through seasonal worker programs, can also create opportunities for businesses in the tourism and hospitality sector. The country’s small size and unique culture provide opportunities for niche businesses, particularly in the tourism and hospitality sector.
However—the lack of investment in downstream industries has made the country’s oil and gas sector vulnerable to fluctuations in global oil prices, leading to challenges such as a decline in government revenue and negative effects on the country’s GDP.
The continuing influx of Asian, especially Chinese, suppliers and manufacturers into Nigeria constitutes a major competitive challenge to foreign investors in many industry sectors. The high cost of doing business, the need to duplicate essential infrastructure, insecurity, corruption, the lack of effective judicial due process, and nontransparent economic decision-making in government procurement are other challenges faced by foreign investors in Nigeria’s emerging market.
Another challenge faced by foreign investors in Nigeria’s emerging market is the lack of transparency in the property market. The lack of transparency in the property market makes it difficult for foreign investors to assess the risks associated with investing in the market. The banking system is also a significant challenge for foreign investors in Nigeria’s emerging market. The country’s bank lending is relatively inefficient, even though it is the most common source of finance.
