However, infrastructure deficits, a lamentable security situation and inclement policies have combined to deter overseas companies from venturing into Africa's second largest economy. The installation of a democratically elected government in 1999 paved the way for radical reforms calculated to reverse this trend and boost both domestic and international investment in the country. For the business savvy though, Nigeria is a country teeming with business opportunity and potential.
According to TradeInvest Nigeria, a non-government agency that provides access to business opportunities in the country, the extent of its trade potential is unparalleled in the entire African continent. Lucrative investment opportunities exist across multiple sectors, including healthcare, tourism and leisure, agricultural and agro-processing, banking and infrastructure. The Nigerian Investment Promotion Commission Decree of 1995 allows foreign companies unrestricted ownership of busine sses except in the petroleum sector, where investment is limited to production-sharing or joint-venture arrangements.
The range of prospects that Nigeria holds out for global investors is significant, especially considering the nation's long-term goals of accelerated economic development and inclusive growth.
One of the most profitable business opportunities Nigeria offers is in the healthcare services industry. TradeInvest Nigeria especially highlights the private-sector investment potential in secondary and tertiary healthcare services involving research, capacity building, health management and information technology, all of which are currently lacking. The industry offers the added benefit of serving a social cause, which is significantly relevant in a country with deplorable human development indices. In this context, Nigeria's economic capital Lagos, a city of 17 million people, is a veritable gold mine of unexplored dimensions.
For the business savvy, Lagos is as close to a dream investment destination as any in the continent. Home to some of Nigeria's richest and strategically located on the coast, it is serviced by a large seaport and international airport that offer easy access to the entire West African region. The Lagos state government is well aware of the city's business potential and offers investors attractive trade incentives and tax exemptions. Relative political stability over the last decade and progressive policies have resulted in a boom for private enterprises in Lagos, most of which operate outside the ambit of government regulation and as part of the informal economy. Together with the fact that Nigeria is home to 148 million people, according to revised World Bank estimates for 2009, the scope for profitable foreign investment in Lagos and elsewhere across the country are immense.
Information Technology Opportunities
One of Nigeria principal infrastructure lacking is in t he field of communications and information technology, which contributes in large part to its underachieved economic potential. While the poor telecommunications network is a serious bar to business expansion and proliferation for local and foreign businesses alike, it is also a high-growth sector for potential investment by global players. A case in point is VOIX Networks Limited, a Nigerian IT and communications technology products and services provider that is looking to expand with the help of overseas investors.
The company's mission of creating a more connected Nigeria has translated to a wide variety of products and services, including prepaid calling cards, wireless internet and cellular telephony. Despite the large-scale success of its operations, VOIX has managed to achieve only a fraction of its full potential in the absence of private investment to bankroll its expansion plans. Considering Nigeria's ambitious plans to generate sustainable economic growth th rough industry-wide development, telecommunications comprise a potential boom sector for private investment with uncharted growth potential.
Nigeria's most fundamental infrastructure deficit is in the field of power generation. Earlier this year, the government announced it is looking to attract $ 100 billion in investments for the power sector over the next five years1. Power supply is erratic and insufficient in most areas across rural and urban Nigeria, forcing businesses to operate on generators and face security concerns during frequent outages. The Lagos state government is once against at the forefront of efforts to rope in overseas investment in solar-power generation by announcing attractive terms of operation. Because of its tropical climate and equatorial location, Nigeria has tremendous potential not only to meet but overshoot its current electricity requirements through solar power generation.
For a country that has historically de pended almost exclusively on non-renewable resources for revenue, this marks a substantial shift in attitude. Nigeria's hot climate and wide plains make it the perfect location to achieve massive solar power generation. The added benefit comes by way of employment generation for hundreds of skilled and unskilled workers required for the construction and maintenance of such power plants. There is little doubt that solar power, potentially, is Nigeria's sunshine sector.
From fertilisers to agricultural equipment leasing services, steel production to catfish farming, chemical supplies to waste recycling - Nigeria holds within its borders a virtual cornucopia of investment opportunities for global players. The country's tumultuous history and record of outdated policies are slowly but certainly being overcome in the spirit of economic reforms and deregulation. There are still clear and present dangers that thwart substantial foreign investment from landing on its shores, the most prominent emerging out of militancy and terrorism in the Niger Delta region and civilian unrest elsewhere. Trade barriers, an investor-unfriendly tax regime and large-scale bureaucratic and political corruption still present massive challenges to any sustained effort for inclusive growth. Abuja's ambitious 2020 plans, initiated by former president O Obsanjo to take the nation to the top twenty world economies by that year, are contingent on acquiring massive private sector investment.
The fate of Nigeria's economic and human development goals rests primarily on its ability to create an environment that sustains foreign investment in diverse sectors. The real test of savvy, from this point of view, applies as much to the Nigerian regime as it does to the investors it desperately seeks to attract.