Economic Data
Total GDP (in U.S.$): $28 billion
GDP Growth: 3% (1998), 3.8% (1997)
Per Capita GDP (in U.S.$): $254
Inflation: 8.5% (1997)
Unemployment Rate: 30% (1997 est.)
Trade Balance (in U.S.$): $7 billion
Exports (U.S.$): $15 billion (f.o.b., 1996): petroleum, and petroleum products (95%), cocoa, rubber. Partners: US 40%, EU 21% (1995)
Imports (U.S.$): $8 billion (c.i.f., 1996): machinery, chemicals, transportation equipment, manufactured goods, food and animals. Partners: EU 50%, U.S. 12%, Japan 7%
Best Prospects for Export: Oil and gas field equipment, computers and peripherals, software, telecommunications equipment, aviation, medical equipment, cosmetics, automotive parts, construction equipment, and textiles.
Rhode Island's Market Has Changed. Developers, Builders, Investors and Sellers Must Change With It.
By Emilio DiSpirito IV License Partner | Engel & Völkers Oceanside Leader | The DiSpirito…
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Nigeria’s first civilian government in the last 15 years has its work cut out for it.
The civil administration that took over power this summer, headed by retired Gen. Olusegun Obasanjo, is working to get Africa’s most populous nation out from under a heavy debt burden and to continue economic and political reforms.
Obasanjo won the country’s top office in a landslide in February and took office in late May. Obasanjo replaces military strongman Sani Aabacha, who seized power in 1993 and ruled Nigeria until his death last year.
Stronger oil prices this year are likely to contribute to a modest increase in Nigeria’s real gross domestic product, or GDP, an estimate of the total value of all the final goods and services produced by a country in a given year. But the effect of higher oil prices could be offset by production problems and ethnic fighting in oil-producing regions of the country, according to The Economist Intelligence Unit Ltd. of London.
And the improvement in oil prices this year could be further undermined by projected lower export volumes and other economic woes. Nigeria’s budget deficit, for example, hit $2.7 billion in the first four months of the year.
The outlook is a bit rosier for 2000, when a $4 billion liquefied natural gas plant enters full production. The Economist Intelligence Unit forecasts a 2.5% increase in Nigeria’s 2000 GDP.
Another concern is inflation, which is being fueled by a slide in the value of Nigeria’s currency, the naira. Observers expect consumer prices to increase a thumping 30 percent this year before easing up some in 2000.
Although Nigeria’s new government inherited an economy in shambles, foreign businesses and other nations are said to be encouraged by the country’s return to civilian rule. Nigeria was readmitted to the 54-member Commonwealth of former British colonies in May when Obasanjo was sworn in as president.
Federal Republic of Nigeria
Location: Western Africa, bordering the Gulf of Guinea, between Benin and Cameroon
Geographic Area: 923,770 sq. kilometers. Slightly more then twice the size of California
Climate: varies; equatorial in south, tropical in center, arid in north
Main Cities: Abuja (capital), Lagos, Port Harcourt, Ibadan, Ilorin, Kaduna, Kano, Maiduguri
Population: 120 million (October 1999)
Languages: English (official), Hausa, Yoruba, Ibo, Fulani
Time Zone: G.M.T. + 1
Workweek: Business establishments and government offices generally open from 7:30 a.m. to 4:00 p.m., Monday through Friday, with offices closed for lunch from 1:00-2:00 p.m. Many government offices and businesses hold staff meetings on Monday and Friday mornings, sometimes making it difficult to see people at those times. In the Muslim north, all establishments close at 1:00 p.m. on Friday.
Type of Government: Civilian democracy as of May 1999. Nigeria had been ruled by military regimes since December 31, 1983
Head of State: President Olusegun Obasanjo.
Currency: 1 naira (N) = 100 kobo
Exchange Rate: U.S.$1 = N108, forecast to decline to U.S.$1=N130 in 2000.
Economic and Political Conditions: Political instability, corruption, and poor macroeconomic management have hobbled the oil rich Nigerian economy. Nigeria remains heavily dependent on oil revenues, which provide 50% of GDP, 95% of foreign exchange earnings, and about 80% of budgetary revenues. Past government resistance to initiating greater transparency and accountability in managing the country’s multibillion-dollar oil earnings continues to limit economic growth and prevent an agreement with the IMF and bilateral creditors on debt relief. Nigeria is import-dependent. The largely subsistence agricultural sector has failed to keep up with rapid population growth, and Nigeria, once a large net exporter of food, now must import food.
On the 39th anniversary of Nigerian independence from British colonial rule on October 1, democratically elected President Olusegun Obasanjo called for “moral rebirth” of the country. He vowed to end Nigeria’s reputation for corruption and mismanagement. Former head-of-state and retired general, Obasanjo was imprisoned by dictator Sani Abacha. After Abacha’s sudden death in June 1998, General Abdulsalami Abubakar, acting as government caretaker until democratic elections could take place, freed Obasanjo and other political prisoners.
Obasanjo will face a number of major issues, including depleted foreign reserves and a substantial budget deficit. The IMF has delayed any decision on Nigeria’s request for debt relief for at least one year. Oil prices are forecast to rise, increasing GDP by 1.1 percent in 1999 and by 2.5 percent in 2000.
Tarriffs, Trade,Taxes, Trademarks
Nigeria established a new tariff structure in 1995. Under the new structure, import taxes ranging from 5 to 60 percent are levied on imported goods. This new tariff structure will be reviewed after seven years.
Taxation: The Companies Tax Act 1979 governs the taxation of companies incorporated in Nigeria and all other foreign companies operating in Nigeria. Corporate tax is based on profits of companies. Only the Nigerian income of a foreign company is taxable in Nigeria. Income from all sources is combined and taxed at a single corporate income tax rate of 35 percent. Capital gains are taxed separately at a 20 percent rate. Gains on government securities and private residences are not subject to tax.
Foreign Investment: Nigeria is Africa’s most populous nation, with 120 million people. The country offers potential investors a low-cost labor pool, abundant natural resources, and the largest domestic market in Sub-Saharan Africa. However, these advantages must be weighed against Nigeria’s inadequate and poorly maintained infrastructure, increasing labor problems, complicated, confusing and inconsistent regulatory environment, the importance of personal ties in doing business, and endemic corruption.
Free Trade Zones: The Federal Government is planning a new Export Processing Zone (EPZ) for Port Harcourt in the Rivers States of Eastern Nigeria to attract foreign investments, increase exports and subsequent foreign exchange earnings. Nigeria’s premier EPZ, in Calabar, is in its final stages of completion. Many international companies are interested in operating in the EPZ.
Trade Finance: Method of payment is either through confirmed irrevocable letters of credit, bills for collection, open account or any other internationally-accepted payment mode. Whatever the mode adopted, the proceeds must be repatriated within 90 days from the date of shipment of the consignment. U.S. exporters are advised to ship goods only on seeing confirmed and irrevocable letters of credit. The preferred method of quoting is “CIF.”
Marketing and Selling Factors: As in most developing countries, personal ties and patience are key to successful business activity in Nigeria. The best way for U.S. manufacturers and suppliers to penetrate the Nigerian market is through the Department of Commerce’s Agent/Distributor Service, or its Customized Market Analysis (CMA) program. Both aim to identify reputable and capable agents/distributors. Asian and European firms, effectively using locally based marketing strategies, present strong competition. U.S. exporters interested in visiting Nigeria to explore potential opportunities and meet with trade/industry contacts are urged to use the Gold Key Service offered by the Commercial Service at the American Embassy in Lagos.
Patents/Trademarks/Copyrights: Nigeria is a signatory to the Universal Copyright Convention and the Berne Convention. In early 1993, Nigeria became a member of the World Intellectual Property Organization (WIPO). Cases involving infringement of non-Nigerian copyrights have been successfully prosecuted in Nigeria, but enforcement of existing laws remains weak, particularly in the patent and trademark areas. Despite active participation in international conventions and the apparent interest of the government in intellectual property rights issues, little has been done to stop the widespread production and sale of pirated tapes, videos, computer software, and books in Nigeria.
Key Contacts – Nigeria
Rhode Island Export Assistance Center (RIEAC) and World Trade Center, Bryant College
Raymond W. Fogarty, Director
Edward Barr, World Trade Center Manager
Telephone: (401) 232-6407 or (401) 232-6408
Fax: (401) 232-6416 E-Mail: postoffice@itdn.net
Website: http://www.rieac.org
Rhode Island Economic Development Corporation (RIEDC)
Maureen Mezei, International Trade Director
Telephone: 222-2601, ext. 123 E-Mail: mmezei@riedc.com
U.S. Export Assistance Center, Department of Commerce
Keith M. Yatsushashi, International Trade Specialist
Telephone: 528-5104 E-Mail: kyatsuha@mail.doc.gov
U. S. Small Business Administration
Marilyn Bogue, International Trade Officer
Telephone: 528-4585 E-Mail: marilyn.bogue@sba.gov
Embassy of Nigeria
Embassy of Federal Republic of Nigeria
1333 16th St., N.W.
Washington, D.C. 20036
Telephone: 202-986-8400 Fax: 202-775-1385
Country Profile
Compiled by Providence Business News,
in collaboration with Bryant College Export Assistance Center.
