Exporting guide to Nigeria
Demand for UK goods
Nigeria is the second largest African market for UK goods (UN comtrade 2019). UK companies are well known and UK brands in high demand.
Total exports from the UK to Nigeria amounted to £2.2bn in the 12 months ending September 2021, up 7.7% on the previous year (ONS, Q3 2021). Sectors offering particular opportunities to UK companies include energy, infrastructure and agri-technology.
Diversification means opportunity
UK expertise in engineering, science and technology means UK companies are well positioned to partner with Nigeria, as the government emphasises economic diversification to reduce the country’s dependence on oil.
The government's Economic Growth and Recovery Plan has outlined 60 initiatives. These are centred on agriculture, industrialisation, energy and social investment, creating more opportunities within increased public-private partnerships.
The Nigerian economy grew by 2.6% in 2021, and is predicted to expand by 2.7% in 2022 (IMF, projected figures, last updated: October 2021). This should lead to increased spending power among the Nigerian population, which in turn should benefit UK exporters.
Nigeria: at a glance
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Opportunities for UK exporters
There are opportunities for UK companies across a broad range of industries, and particularly in the following sectors:
Nigeria is home to one of the largest oil and gas reserves in the world. Gas production reached 1,653 billion cubic feet in 2017 (Rystad Energy, Fitch Solutions, fDI markets, 2018), and is expected to increase substantially in the coming years. The government aims to increase gas production and the development of gas infrastructure in order to support the power sector.
Privatisation of power
The current Nigerian network is unable to cope with the demands of population growth. Consequently, the government has privatised parts of the power sector to encourage investment, particularly in the sphere of transmission infrastructure. This has created market opportunities and chances for more joint ventures.
Parts of the energy industry are still operating with dated equipment and technology. Rehabilitation, innovation and renewable energy schemes in the country are encouraged, and backed by international agencies including the African Development Bank. As such, they present valuable opportunities for UK companies.
Close ties to the stock market
The close commercial relationship between the UK and Nigeria led to the London Stock Exchange Group establishing a partnership with its Nigerian counterpart in 2014. This lets Nigerian companies dual list on both exchanges. It allows UK businesses to diversify capital-raising activities and trade on both markets, rather than relying solely on the domestic market.
Capital Market Master Plan
The Nigeria Securities Exchange Commission’s Capital Market Master Plan has led to significant changes in the market, with initiatives like the National Investors Protection Fund. This allows for more robust investor protection, to boost investor confidence.
Increased public-private partnerships
The Public Private-Partnership (PPP) Department of the Nigerian Federal Ministry of Works has outlined plans for a number of projects in highways and other sectors. These are looking to attract both private sector and foreign direct investment (FDI).
Nigeria’s growing population is driving the need for more public amenity initiatives. A variety of building and site development projects offer UK businesses the opportunity to provide materials and equipment, as well as consultancy and project management services.
Openings in a variety of sectors
The infrastructure gap cuts across all segments of the Nigerian economy and environment. There are opportunities for UK firms in sectors ranging from energy, transport and urban development to healthcare, agriculture and waste management.
Pro-investment government initiatives
The Nigerian government has set out its intention to reposition agriculture as the main sector to grow the economy. State governing bodies across the country have forged partnerships with local and international private sector companies to develop this plan.
Demand for UK goods and services
There’s a continuing need in Nigeria for UK companies to provide innovative technology as well as specialist agricultural equipment, education and training.
Increases in finance for farmers
To increase access to finance for smallholder farmers, substantial funds have been set aside by the government to support them, at a single-digit maximum interest rate. The Anchor Borrower's Programme will enable them to invest in advanced farming equipment, storage facilities, and quality fertilisers – all of which could be provided by UK businesses.