Monday 10 December 2018

Irish companies gain ground in future consumer dynamo Nigeria

Nigeria is already the world's 21st largest economy (Stock picture)
Nigeria is already the world's 21st largest economy (Stock picture)

Fred Klinkenberg

Many people know that India's film industry is the biggest in the world by volume. But what's less well known is that Hollywood is not second to Bollywood. That distinction goes to Nollywood, the soubriquet given to the Nigerian film industry.

It is perhaps one of many surprising facts about Nigeria, not least of which is its future as a consumer powerhouse. It is already the seventh most populous country in the world, with over 180 million people and growing rapidly. By 2050, that figure is due to reach 450 million, rising to 700 million by the end of the century.

Annual growth averaging 6.5pc in the last decade positions Nigeria as an attractive frontier market with a growing middle class with increased spending power.

The current low oil price means the economy may not grow this year. But strength in other sectors and an expected bounce in oil prices points to accelerated growth towards $1.5 trillion GDP by 2030 - almost treble the current level. Nigeria is already the world's 21st largest economy.

Ireland has been gaining ground here in recent years with an Enterprise Ireland representative office in Lagos since 2014 and two ministerial trade missions since 2013.

Education and training offers potential. Some 50,000 Nigerian students travel abroad each year for undergraduate and post-graduate study, and this month Enterprise Ireland will bring nine education companies to the country - the largest mission of its kind to date. Irish firms are already active in the sector. Computer literacy certification is a booming area with ECDL Foundation certifying thousands of graduates. The Shaw Academy, Dublin International Foundation College, the Institute of Education, Griffith College and Chevron Training are also doing business in Nigeria, availing of the high regard for Irish education established by the long tradition of missionaries providing schooling in West Africa.

There are many other links between Ireland and Nigeria stretching back decades. For instance, when Sean Lemass attended Nigerian independence celebrations as Taoiseach in 1960, half the doctors in Lagos General Hospital were Irish or Irish-educated.

Ten out of the country's 17 Catholic bishops were Irish at the time of the visit, and shortly afterwards they declared St Patrick the patron saint of Nigeria, which he remains today.

Also in 1960, Guinness established a brewing operation in Lagos. Nigeria is now the brand's largest brewing operation - and market - in the world outside the British Isles.

Looking further back, the Irish republican Roger Casement spent some of his formative years working for the British Colonial Foreign Service based in the south Nigerian city of Old Calabar in the 1890s. His experiences there and in the Congo would shape his humanitarian world view.

Nigeria is a multifaceted society with over 250 different ethnic groups. Luckily, they all speak English; but given the complexities of the market, personal contacts are essential for doing business here, and the most common route to market is through a local partner.

While new entrants may be concerned about the challenges of the Nigerian market, the highest risk is using a partner without the capacity, resources and network to get things done.

However, plenty of Irish companies have made good relationships here and have been successful in sectors such as food and beverages for some time. 'New' Irish companies in areas such as multi-channel banking software, solar energy, aviation services and products, water treatment facilities and LED lighting products and software have entered the market and grown their business.

Also, Irish engineering firms are involved in state-of-the-art data centres and high-rise buildings in the commercial capital Lagos. Considering the size of the market, Lagos, a city of over 20 million people, is the seventh largest economy in Africa, and often a good starting point before expanding more widely.

Another Irish export of note, though perhaps more cultural than actual, is the humble spud. It is likely that potatoes were introduced by European miners in the mid-20th century. However, they have long been associated with Irish missionaries, so much so, that they are often referred to as Irish potatoes.

Fred Klinkenberg is Enterprise Ireland Country Manager for South Africa

Sunday Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business