Nigeria is Africa’s largest economy. It stole South Africa’s crown in the second quarter of last year. The rise to pole position was as much to do with buoyant energy and telecoms sectors as it was the chaos caused by widespread strikes and civil unrest in the southern republic.
Jim O’Neill, the former Goldman Sachs economist who first coined the phrase Bric economies (for Brasil, Russia, India and China, which were at the time the world’s fastest growing marketplaces), also elevated Nigeria to his most recent ones-to-watch club, known as the Mint economies (Mexico, Indonesia, Nigeria and Turkey).
But while the oil-rich country on the Gulf of Guinea was basking in glorious global publicity about its commercial potential, all was not well.
President Goodluck Jonathan, who had lead the country for five years, was entangled in a series of multi-billion dollar oil corruption scandals and receiving widespread international criticism for not quelling the rise of religious extremist group Boko Haram. It was no surprise, therefore, that the ironically named Goodluck was booted out of office and replaced by Muhammadu Buhari, an ex-army general who pledged to fight government and energy sector corruption when elections were held earlier this year.
Nigeria is a country of paradoxes: about 60-70 per cent of the 175 million population live on less than $1 a day, according to Unicef, yet it is also home to Africa’s richest individual and the world’s wealthiest black man.
Commodities magnate Aliko Dangote is listed by Forbes magazine to be worth more than $20 billion. The middle class has grown steadily over recent years thanks in part to the growth of the oil and telecoms sectors on which the economy is so reliant.
The dramatic fall in oil prices over that last 12 months has put the brakes on growth, though a modest year on year increase in GDP is still expected for 2015. In spite of the challenges, Nigeria remains a more than attractive marketplace for international investors. Progress in the coming years will determine whether the country will retain its status as the African economic powerhouse in the long term.
Travel suppliers are acutely aware of this demand. Arik Air may be the country’s only remaining international flag carrier, but most global network carriers run regular services to Lagos, Abuja and Port Hartcourt. The private jet market is understandably buoyant.
Nigeria also has the largest pipeline of new hotels in Africa, according to Ernst & Young. The capacity is badly needed as rooms are among the most expensive in the world.
Bigger challenges lie-especially for newcomers to the marketplace-in understanding how to do business in the country.
Travel managers are, rightly, concerned with security. Having a meticulous travel risk and security policy, and partnerships with expert suppliers, is a necessity; likewise, education on security and etiquette for travel managers and business travellers should not be overlooked.
While Buhari works to stamp out high-level corruption, low-level corruption remains systemic. Kenneth Ekrete, director of GSM travel agency Network Travel Nigeria, calls it the Africa syndrome. “[In Nigeria] you have to pay people to do the most basic tasks,” he says. “It is expected, and it starts when you arrive at the airport.”
Instances of card fraud are commonplace. That said, the country’s international reputation is slightly misleading.
Stories of Nigerian email scams are ubiquitous in Western media. But, ironically, card fraud is more likely to take place in the UK, US and Middle East.
Those who thought a corporate card scheme in Nigeria could not work should reconsider.
Culturally, the Nigerian business community and consumers place huge value on products and services from overseas. In essence, people trust Western brands more than domestic brands. This trait is attractive to outside investors. But much work has to be done to improve the country’s infrastructure; power cuts are frequent and traffic congestions in major cities an acute problem.
With all this, and the necessity to change political culture, much rides on the success of the new president.