understanding the nigerian business environment

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NPA/ALO-OKI FINANCIAL EDUCATION AND INVESTMENT INTELLIGENCE WORKSHOP ALO-OKI NOVEMBER, 2013.

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A Presentation prepared by Seun Adeogun for Mr. Toyin Y Lasisi 2013

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  • 1. ALO-OKI NOVEMBER, 2013.

2. The Nigerian investment environment isvolatile but embedded with so manyopportunities for investors from within andoutside. Though there are challenges mostly in thearea of leadership, resources management,security and infrastructure, etc. nevertheless,there are investment opportunities in almostevery sector of the Nigerian economy. 3. As it is, the Nigeria investmentenvironment is too large to ignore and thisis why we have so many Asians andEuropeans having huge investment in thenations economy. 4. According to statistics by the NigerianInvestment Promotion Council, Nigeriaboast of about 167 million people makingher the 8th largest population in the worldand 4th largest population under the ageof 20.A worthwhile asset! 5. Can you imagine you starting a businesslets say manufacturing an essentialcommodity and you having just a littlefraction of the total population buyingyour products regularly? May be you just have as little as 500,000people buying your products! 6. Despite the array of opportunities in Nigeria,there are a lot of bottlenecks to investing inthe countrys business environment suchproblems exist in the area of Political leadership (Unstable policies,corruption, mismanagement of nationswealth, conflicts of interest, etc.)Power supply 7. Infrastructural deficitHigh cost of running businessMultiple taxationCorruption/nepotism among citizensDemand for foreign goods 8. You shouldnt be deterred by the array ofproblems that exist in the Nigerian socio-economicenvironment. Despite some ofthese bottlenecks identified, people are outthere making millions of naira legitimately.You can also be one of such people 9. Oil & Gas Sector in NigeriaNigerian oil and gas Industry is said to be theengine of the Nations economy. Nigeria practicallydepends on oil.The Government of Nigeria is been funded with oilrevenue. As we all know, Nigeria is one of theworld's biggest oil producers.The oil & gas industry is usually divided into twomajor sectors: upstream and downstream. 10. According to Wikipedia, the Downstream Sectorcommonly refers to the refining of petroleumrefining of petroleum crude oil and the processingand purifying of raw natural gas as well as themarketing and distribution of products from crudeoil and natural gas. The downstream sector touches consumersthrough products such as gasoline or petrol,kerosene, jet fuel, diesel, oils, lubricants, waxes,asphalt, natural gas and liquefied petroleum gas aswell as hundreds of petrochemicals. 11. The Upstream Sector includes the searching forpotential underground or underwater crude oil andnatural gas fields, drilling of exploratory wells, andsubsequently drilling and operating the wells thatrecover and bring the crude oil and/or raw naturalgas to the surface. As it is you can only tap into some of the variedproduction activities in downstream sector giventhe fact that this is the only are some of us caninvest in based on the capital we have at hand. 12. The Upstream production activities aremostly handled by the multinationalsand big investors who have thewherewithal to invest and based ontheir expertise. 13. So you can invest or start a business inthe area of fuel importation, haulage,supply and distribution (offuel/kerosene/diesel station), oil andgas installation maintenance andservicing, etc. 14. The agricultural sector is another viableinvestment hub for Nigerians in which youare included. This sector can never beignored in anyway because agriculture isan essential aspect of every society. 15. Opportunities are open in the area ofpoultry farming, fishing, cassava,production, snail farming, crop farming,sales and distribution of food products,food products packaging, fruits farming,food processing, catering services, foodrestaurant business, etc. 16. With the recent full privatization of thepower sector coupled with the hugedemand for power in Nigeria, opportunitiesnow abound for business and investmentgestures. 17. The power sector is divided intoGeneration, Transmission & Distribution.Presently, the core investors are shoppingfor sub investors who will play active rolein the marketing and distribution of powersupply across different parts of the nation. 18. Transportation industry in Nigeria is veryviable for business and investmentopportunities. Business and investmentopportunities such as haulage, roadtransportation (cargo & commuters), watertransportation (commuters & cargo), carwash, importation of vehicles* and spareparts, etc. 19. A policy by the federal government is inthe making to stop the importation ofvehicles so you might have to look inthe direction of manufacturing,assemblage, marketing and sales. 20. The manufacturing sector of the Nigerianeconomy is one of the previously neglectedsectors gradually bouncing back to reckoning. Though this industry has suffered fromneglect, but obviously, as the governmenttries to diversify the economy, it is working toreinvigorate the manufacturing sector so as toincrease its contribution to Nigeriasprosperity. 21. The manufacturing sector is thereforeanother solid investment hub and businessarea for you. Manufacturing can either besmall or large scale but whichever,opportunities abound in the manufacturingof the following: Electric/wire cables,Cement, Pharmaceutical products, Textiles& Garments, Automobiles, Iron & Steel,Furniture, etc. 22. The real estate sector in Nigeria happensto be one sector that has been proven tobe a profitable investment hub in Nigeriawith relative returns.As it where, the real estate industryinvolves the purchase, ownership,management, rental and/or sale of realestate for profit. 23. The two viable aspects of Real estate investmentare the commercial Real Estate i.e. an aspectthat covers the use of properties for businesspurposes. Such as erecting a building for officeand business activities and collecting rent fromeach business that operates within the structure. Some of the major categories of commercial realestate include: shopping complex, Ultra-modernmalls, event centres, Office buildings, RecreationalCentres, Hotels and guesthouse, Restaurants &Fast Food Outlets, etc. 24. This is whereby properties are beingerected for living purposes. According to Maslows hierarchy of needsshelter ranks second in the hierarchy ofhuman needs, which is the next mostimportant human need after food. 25. According to the Nigerian InvestmentPromotion Council, Nigeria is richlyendowed with a variety of solid minerals ofvarious categories ranging from preciousmetals to various stones and alsoindustrial minerals such as gypsum, kaolinand marble. Much of these are yet to beexploited. 26. Statistically, the level of exploitation ofthese minerals is very low in relation to theextent of deposits found in the country. 27. There are tremendous opportunities forinvestments in the solid mineral sector inNigeria. Prospecting licenses for investors(both local and foreign) to participate in theexploitation of the vast mineral resourcesin Nigeria is granted by the FederalMinistry of Solid Minerals. 28. Mineral resources that are present in Nigeriabut not yet fully exploited are coal and tin.Other natural resources in the country includeiron ore, limestone, niobium, lead, zinc, andarable land. Agricultural products include groundnuts,palm oil, cocoa, coconut, citrus fruits, maize,millet, cassava, yams and sugar cane.Nigeria also has a booming leather and textileindustry, with industries located in Kano,Abeokuta, Onitsha, and Lagos. 29. Opportunities exist for the exploitation andexport of natural gas, bitumen, limestone,coal, tin, columbite, gold, silver, lead-zinc,gypsum, glass sands, clays, asbestos,graphite, and iron ore, among others 30. There are vast opportunities in other areasof the Nigerian economy such asConsultancy services especially in yourindustry based on your level of experienceand expertise in the maritime relatedindustry. 31. And not leaving out the Nigerian Stockmarket. Investment opportunities alsoabound here. But expert advice andcounsel coupled with knowledge of themarket is essential to invest in this aspectof the economy. 32. And other General Service areas such asConsultancy, Dry Cleaning, Retail, Productmerchandising, supplies and marketing,Telecommunication, Postal Services,Photography, Security outfit, Tourism/Hoteland Hospitality, Waste Management,treatment & recycling, Entertainment(Talent management, bar, club, pub, etc.) 33. THANKS FOR LISTENING!