Historically Africa has been regarded as an underdeveloped continent, lacking major international relevance on the economical scene. Its demographic, social, cultural and economic diversities were constantly underestimated, despite offering numerous business opportunities. A distinctive example of that would be Nigeria: now a significant global oil producer for many years, it has provided an exceptional ground for investment, in many segments, especially the infrastructure sector, which remains relatively unexplored.
With 8.97 percent gross domestic product (GDP) growth recorded over the last quarter, Nigeria has secured itself the title of leading African economy in the region as well as an obvious country for Foreign Direct Investment (FDI). Taking into consideration its geographic position, demographic composition, soil rich resources, and its economic liberalisation, Nigeria has major potential to attract foreign direct investment (FDI), particularly relating to infrastructure.
Sitting at the forefront of the Gulf of Guinea, Nigeria boasts six ports enabling it to serve as a trading hub along the vital maritime transport business, connecting it to North America, South America, Europe and Asia. Armed with an extensive natural waterway network comprised of rivers, creeks and lakes, Nigeria is a promising avenue for future infrastructure development projects.
Not only that, the country has over 30 airports, seven of which guarantee international connectivity. Moreover, Nigeria has an important network of roads that allow it to bridge the gap between international markets and regional African markets. This has positioned the country to become a gateway for trade activity in the Gulf of Guinea area.
In addition to enjoying a geo-strategic position in West Africa, the country is home to a range of natural minerals for example coal, limestone, iron ore and bitumen. In addition, Nigeria has one of the largest natural gas reserves on the continent. Based on an expected increase in oil output, as well as accelerated implementation of public and social investment projects, Nigeria’s economy is expected to grow by circa 2.5 percent in 2018. Besides this, the country’s wealth in water systems sets an excellent foundation for developing transportation networks that can connect not only the inland of Nigeria, but also the rest of the region. The abundance of waterways can be used in projects of energy generation such as the building of dams.
The population, in excess of 200 million, provides Nigeria with an excellent platform for business investment. This is a consumer market with a high capacity to absorb products and services.
Unlike many of its African counterparts, Nigeria’s government has adopted many economic measures to allow the liberalisation of its market as well as the diversification of the economy. The Nigerian government has also accepted the private sector as the engine of growth and the creator of wealth, and has taken responsibility to enable the environment for investment.
Consequently, it has adopted measures incentivising private investments in various industries through a five year-concession on taxes in several taxation categories.
Nigeria’s transport infrastructure is performing reasonably well. In fact, the country has more advanced infrastructure networks that cover extensive areas of the nation’s territory. It is estimated that raising the country’s infrastructure level to that of the region’s middle-income countries could boost annual real GDP growth by around four percentage points. The country is also willing to boost its economy by completing outstanding projects and supporting new initiatives.
African countries, particularly Nigeria, present far more opportunities for investment and development. Its accessibility via maritime, land and air routes makes it an attractive destination for investment. In addition, its abundance of natural resources gives it a considerable growth potential. Apart from that, government initiatives to liberalise and diversify the economy add appeal to Nigeria’s business profile. The population that encompasses a large and capable workforce presents an opportunity not only for relocation, but also for the introduction of new products and services. This will mostly be visible in the domain of transportation and energy generation as demand continues to grow with the growth in population.
As a result, construction of highways, ports, airports, dams, bridges, tunnels and telecommunication infrastructures constitutes a pressing need and a major opportunity for investment as the government is willing to concede this task to foreign and private investors.
Any opinions expressed here are the author’s own.
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