Oil rich Nigeria is now the largest economy in Africa with a gross domestic product (GDP) of about $490 billion and a population of over 168 million.
A huge number of international organisations and business people have been cautious of doing business in Nigeria for years.
This may seem eccentric given that Nigeria is one of the most populous countries in Africa as well as one of the most oil-rich places in the world.
Combined with the fact that the country is abundant in many other natural resources you might think that international business would be fighting for a stake in Nigeria.
The GDP value of Nigeria represents 0.42 per cent of the world economy. Oil and natural gas are the most important export products for Nigerian trade.
The country exports approximately 2.327 million barrels per day, according to 2007 figures. In terms of total oil exports, Nigeria ranks 8th in the world. As of 2009, Nigeria had approximately 36.2 billion barrel oil reserves.
Prior to oil production, which surged after the 1970s, agricultural production was the largest export sector for Nigeria. After the country became a largely oil-intensive economy, the agriculture sector took a back seat.
Over the past decade exports to Nigeria have shown a gradual increase between 1998 – 2001, 2003 – 2006 and in 2008 with declines in 2002, 2007 and 2009.
The decline could be as a result of the prohibited list of products by Nigeria which restricts most products that Kenya would otherwise export to this market.
What the Kenyan business people need is a level playing field as well as investment incentives in Nigeria. The protectionist government policies, particularly over restrictions on Kenyan manufactured products entering Nigeria needs to be addressed.
Other key impediments for trade are cumbersome visa requirements, lack of infrastructure, poor power supply, inadequate security, inconsistent government policies, inability to access funds, multiple taxation and corruption.
Source: Business Daily
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.