The Federal Republic of Nigeria is often called the Giant of Africa, due to its sizeable population and economy.

The country overtook South Africa to become the continent’s largest economy in 2014, after rebasing its GDP calculation to more than S$688 billion.² Nigeria saw real GDP growth of 2.27% in 2019, the highest since 2015.

Large and Youthful Population

Nigeria has the largest population in Africa, estimated at 206 million by 2020. This also makes it the seventh most populated country in the world. At the current average growth rate of 6.5% per year, Nigeria is likely to become the third most populous nation by 2050.

Nigeria’s population is attractive to many businesses not just because of its size, but also due to its youth. Around 90 million Nigerians are under the age of 18, giving it the third-largest youth population after India and China. Indian companies should take note of the country’s sizeable population and hence available labour force, in addition to its large consumer market.

Abundant Natural Resources

Oil and Natural Resources
Nigeria has 159 oil fields and 1,481 oil wells in operation. It is the largest producer of low-sulphur “sweet crude” in the Organization of Petroleum Exporting Countries (OPEC), producing around 1.9 million barrels per day (with an estimated maximum capacity of 2.5 million barrels). It is the tenth most petroleum-rich nation by size of reserves, and 70% of Nigeria’s government revenue is derived from oil.

Besides its significant oil resources, Nigeria’s other natural resources include coal, iron ore, lead, limestone, natural gas, niobium, tin, and zinc. Local availability makes these cheaper in Nigeria, and an attractive prospect for relevant manufacturers.

Untapped Potential in Agriculture

Nonetheless, agriculture rather than oil is the base of Nigeria’s economy. 60% of its workforce is employed in this sector, and the country has 84 million hectares of arable land, of which only 40% is utilised.

Nigeria is the largest producer of cassava in the world, accounting for around 20% of global production. The country has significant agricultural resources, many of which remain untapped. These include cashew nuts, cassava, cocoa beans, cotton, palm oil, rubber, and soybeans. Indian companies in the agricultural or logistics industry can find opportunities for business here.

Friendly Business Climate

When Nigeria ranked 131st in ease of doing business in 2019, it was a jump of from 146th in 2018. Nigeria has reduced the role of government bureaucracy in business, and starting a company is now faster due to digitalisation. Nigeria has also increased the transparency of construction permits, by publishing regulations, fee schedules, and pre-application requirements online.

The government is also taking steps to remove bottlenecks for businesses as it aims to be among the top 100 business-friendly countries by 2019. Indian businesses and investors will find Nigeria to be increasingly accessible, as the government cultivates its pro-business and investment position.

Profiled Industries

Agriculture

Agriculture is a major branch of Nigeria’s economy, and about 70% of the population engages in subsistence farming. The sector accounted for around 21.9% of total GDP in 2019. Major crops in Nigeria include cashew nuts, cassava, cocoa, groundnuts, maize, palm oil, rubber, and soybeans, among many others.

Agriculture was Nigeria’s dominant sector for most of the 1960s, with palm oil and groundnuts making up 47% of the country’s exports. The country was also a major producer of cotton and cocoa, and export cash crops accounted for 66.4% of its GDP. However, Nigeria’s agricultural sector has shrunk since the discovery of oil in the 1970s, which led to a heavier dependence on oil revenues.

The country is currently on a drive to revive its agricultural industry, with signs of success. Between 2011 and 2014, Nigeria raised food production by 21 million metric tonnes, and sharply reduced reliance on food imports.

In 2016, the government of Nigeria launched the Agriculture Promotion Policy (APP), to build on its success. The APP aims to raise productivity in domestically focused produce such as maize, milk, rice, soybeans, and wheat. Other crops will be prioritised for export markets, including cashew, cocoa, cotton, sesame, and oil palm.

The APP encourages networking between private investors, farmers, and other stakeholders to enhance agricultural quality standards, and deepen the industry’s infrastructure. This agricultural revival creates opportunities for Indian businesses and investors to find a foothold in the country.

Around 60% of Nigeria’s arable land remains uncultivated. This represents many opportunities for investment, from commodity trading and transportation, to the fabrication of small-scale mechanised technologies for on-farm processing.

Consumer Goods

Nigeria is an attractive market for makers of fast-moving consumer goods, due to its sizeable population of around 190 million. Furthermore, 43% of the population is under the age of 15, and around 20% are aged between 15 and 24. This gives Nigeria the biggest youth population, just after China and India.

The country’s middle class is also growing, with Nigeria predicted to become one of the world’s top 20 economies by 2030. This combination of youth, size, and rising discretionary income present an attractive demographic to consumer goods businesses.

Consumer goods currently make up around 18% of Nigeria’s GDP, and are the third largest contributor after agriculture and services. McKinsey estimates that between 2008 and 2020, there is a S$55 billion growth opportunity in the food and consumer goods sectors within the country – the highest growth potential of any African nation.

Despite growing consumption rates, manufacturing in Nigeria is still dominated by a single sector: food & beverage, which makes up 65% of consumer-oriented manufacturing.

Indian companies can tap this opportunity to fill import-dependent niches, such as apparel, home and personal care products, real estate, and transport vehicles. These goods are seen as necessities by the growing urban population.

Consumption in Nigeria is anticipated to surpass S$34.4 billion by 2020. By 2025, Nigeria is expected to drive 15% of Africa’s household consumption growth.

Overall Relations:

India and Nigeria enjoy warm, friendly and deep-rooted bilateral relations. India, with a population of 1.25 billion, and Nigeria, over 180 million, are large developing and democratic countries with multi-religious, multi-ethnic and multi-lingual societies. India as the largest democracy in the world and Nigeria as the largest in Africa, become natural partners.

The struggle against colonialism and apartheid in the formative years after independence of the two countries laid strong foundation for the engagement of the two countries. India and Nigeria are playing an important role in the South-South Cooperation. In the multilateral organisations particularly United Nations, G77 and NAM, both countries have been articulating the voice of the developing world in a coordinated and effective manner.

Starting from November 2018 marks a momentous period in India-Nigeria relations as it ushers in sixty years of diplomatic engagement between the two countries. India established its Diplomatic House Mission in Lagos in November 1958, two years before Nigeria became independent in 1960. Political contacts at the highest level were maintained during the last 60 years.

The presence of a large Indian expatriate community of about 50,000 the largest in West Africa adds value to the importance of the long-standing relationship between the two countries.

Bilateral Visits

India’s first Prime Minister Pandit Jawaharlal Nehru’s landmark visit to Nigeria in September 1962 and his interaction with Nigeria’s first Prime Minister Tafawa Balewa had created mutual goodwill, respect and friendship between the two countries and leaders. Two Nigerian Presidents visited India as the Chief Guests at India’s Republic Day i.e. in 1983 by President Shehu Shagari and in 2000 at India’s 50th Republic Day celebrations by President Olusegun Obasanjo. Indian Prime Minister Atal Bihari Vajpayee visited Abuja in December 2003 to attend the Commonwealth Heads of Government Summit.

Nigerian leadership regularly visited India –with President Obasanjo in November 2004, Vice President Goodluck Jonathan (who later served as President from 2011-2015) in November 2007 and also to the first India-Africa Forum Summit held in New Delhi in April 2008. During the historic State visit to Nigeria by Prime Minister Dr. Manmohan Singh in October 2007, India and Nigeria adopted the Abuja Declaration for Strategic Partnership, which gave a new impetus to our bilateral ties.

Nigerian President Muhammadu Buhari visited New Delhi in October 2015 to participate in the Third India-Africa Forum Summit (IAFS-III) The meeting of Prime Minister Narendra Modi with President Buhari enabled the two countries to review the bilateral engagement, and to chart a path for further enhancement of the bilateral engagement. President Muhammadu Buhari was accompanied by a 121-member delegation consisting Governors of Kano State, Mr. Abdullahi Umar Ganduje and Delta State, Mr. Ifeanyi Okowa; National Security Adviser (NSA), Maj.-Gen. Babagana Monguno (rtd); besides Permanent Secretaries in the Ministries of Foreign Affairs, Industry, Defence, Power, Communications Technology, Agriculture, Trade & Investment.

The visit of Indian Vice President Hamid Ansari to Nigeria from 26 to 29 September 2016 and his meetings with Nigerian President Muhammadu Buhari and Vice President Prof. Yemi Osinbajo provided yet another opportunity to further deepen the bilateral cooperation. Vice President Hamid Ansari led a 13-member official delegation comprising of MoS for Finance and Corporate Affairs, three MPs and senior officials. A 22-member CII-led Business delegation also accompanied the Vice President during his visit to Nigeria.

Nigeria also participated in the Founding Conference of the International Solar Alliance (ISA), that was held in New Delhi on 11 March 2018. In September 2020, the two countries also decided to expand the alliance in Information technology, Defence and solar energy projects via the Indian line of credit (LOC).

Both countries have nurtured the relationship through periodic interactions.

Trade and Investment Relations

India is the largest trading partner of Nigeria and Nigeria is India’s largest trading partner in Africa with the bilateral trade touching US $ 11.76 billion in the 2017-18. Indian owned/operated companies are the 2nd largest employer in Nigeria after the Federal Republic of Nigeria. More than 135 Indian companies are currently operating in Nigeria in diverse fields such as pharmaceuticals, engineering goods, electrical machinery and equipment, plastics, chemicals, etc. Some of the major companies include Bharti Airtel, Tata, Bajaj Auto, Birla Group, Kirloskar, Mahindra, Ashok Leyland, Skipper, Godrej, Simba Group, NIIT, Aptech, New India Assurance, Bhushan Steel, KEC, Dabur, etc.

The bilateral trade during the year 2019-20 registered US$13.82 billion as against US$ 13.89 billion recorded during the year 2018-19 displaying a 0.48% decline as compared to the last year. India’s exports to Nigeria during the year increased to US$3.6 billion compared to US$ 3 billion in 2018-19. India’s imports from Nigeria in 2019-20 increased to US $ 9.5 billion from US$ 7.66 billion in 2016-17. Crude and petroleum products accounted for a major share of India’s imports from Nigeria. India is the largest importer of Nigeria’s Crude Oil. Nigeria has emerged as the fourth largest supplier of crude oil and second largest supplier of LNG in 2017.

Recent Business Events of Interest

Nigeria Chapter of ASSOCHAM launched (June 2016): Nigerian Minister of Industry, Trade & Investment Okechukwu E. Enelamah, President of ASSOCHAM and High Commissioner, jointly launched the Nigeria Chapter of ASSOCHAM in Abuja on June 28, 2016.

Auto Components Show (July 2016):  The Automotive Component Manufacturers Association of India (ACMA) in association with the Ministry of Commerce & Industry and the High Commission of India organized ACMA Auto Show and Buyer-Seller meet in Lagos on July 18-19 2016 with an objective to showcasing the growing capabilities and products of the Indian Auto Component Industry.

India-Nigeria Business Forum (September 2016): India’s Vice President Hamid Ansari and  Nigeria’s Vice President Prof. Yemi Osinbajo jointly launched the India-Nigeria Business Forum on 27 September in Abuja. The Confederation of Indian Industry (CII) led a 22-member Indian business delegation to the event. Among the partners of this event include Abuja Chamber of Commerce and Nigerian National Chamber of Commerce (NACCIMA) together with ASSOCHAM India-Nigeria Business Council. 

The 6th Indian Products and Services Exhibition at Lagos (March 2017): High Commission Office in Lagos organized the 6th Indian Products and Services Exhibition (IPASE) in Lagos on 23-24 March 2017. Mr. Muda Yusuf, Director General, Lagos Chamber of Commerce and Industry was the chief guest at the inauguration ceremony, which was attended by over 150 people. 

Indo-Africa ICT Expo 2017, Lagos (September 2017): The 3rd Edition of Indo-Africa ICT Expo 2017 was held in Lagos with the participation of 50 Indian ICT companies and organized by Telecom Equipment and Services Export Promotion Council (TEPC) of India and NASSCOM. Nigerian Minister of Communications, Barrister Abdur-Raheem Adebayo Shittu was the Chief Guest at the event. Other Ministerial delegates from Africa countries included Vincent Sowah Odotel, Deputy Minister of Communications Republic of Ghana and Getachew Negash Tekla, State Minister of Ethiopia’s Ministry of Communication and Information Technology, Government of Ethiopia. 3000 delegates from across Africa attended the two-day event. India’s Minister of State for Communications (Independent Charge) Manoj Sinha addressed the event through a video link.

Business event on Agriculture & Allied Activities (December 2017) : As part of Indian High Commission’s business outreach activities, a business event was organised on 5 December 2017 in Abuja, focussing on cooperation in agriculture and allied sectors between India and Nigeria.  This event was organised in collaboration with the Nigerian Federal Ministry of Agriculture, ASSOCHAM’s Nigeria Chapter and Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).  Indian companies and experts active in agriculture-related activities in Nigeria shared their experiences. The Chambers of Commerce of the various State Governments, other agencies and organisations from the Nigerian side such as Central Bank of Nigeria (CBN), Nigerian Investment Promotion Commission (NIPC), various trade and agriculture-related associations and representatives of farmers associations were also invited. Exim Bank of India was represented by the Managing Director from India.

PHARMEXCIL Business Meet (February 2018): The Pharmaceutical Export Promotion Council of India (PHARMEXCIL), in cooperation with the High Commission of India and the Association of Pharmaceutical importers of Nigeria and Pharmaceutical Society of Nigeria organized a Business Meet on 22-23 February 2018 in Lagos. A senior representative from Nigerian Agency for Food and Drug Administration and Control (NAFDAC) attended the inaugural event. The event was attended by more than 250 representatives of Pharma Companies including Indian Pharma companies based in Nigeria.

Source India- Nigeria (March 2018): Chemical & Allied Export Promotion Council (CAPEXIL) and Trade Promotion Council of India (TPCI) in association organized ‘Source India’ – Buyer Seller Meet from March 27-29, 2018 in Lagos, Nigeria.  This event was organized under the auspices of the Department of Commerce, Ministry of Commerce & Industry, Government of India. Lagos Chamber of Commerce and Industry and ASSOCHAM’s Nigeria Chapter partnered in holding of the event. About 110 reputed Indian entities representing various sectors such as Rubber, Plastics, Paper, Book, IT, Chemicals, Pants, Printing Ink, Glass, Ceramics, Auto parts, Engineering, F&B, etc., showcased their products and services at the event with an objective to find right Nigerian partners for collaboration in trade, investment and joint venture opportunities. 

4th Edition of Indo-Africa ICT Expo 2018 (May 2018): Telecom Equipment and Services Export Promotion Council (TEPC) of India along with High Commission of India, Abuja and the Ministry of Communications of Federal Republic of Nigeria hosted the 4th Edition of Indo-Africa ICT Expo 2018 in conjunction with IT and Telecom Summit, on 22-23 May 2018 in Lagos. The third edition of the event took place in Lagos from September 6-7, 2017. About fifty (50) Indian ICT companies and eight Nigerian companies participated with more than 1400 visitors and 90 delegates from India.  India’s Minister of State for Communications (Independent Charge) Manoj Sinha addressed the event through a video link.

Business event on Solar and other Renewable Energy Sources (June 2018) : As a follow-up to the Founding Conference of the International Solar Alliance and the Solar Summit that was held in New Delhi in march 2018,  High Commission of India organized a business event on “Nigeria-India Cooperation in Solar & Other Renewable Energy Sources – Opportunities and Way Forward” in association with Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Abuja Chamber of Commerce & Industry (ACCI) on 21 June, 2018 in Abuja.  The event was also attended by representatives of Minister of Power, Works & Housing, Minister of Environment and Federal Capital Territory (FCT) Minister.  The Governor of Cross River State and representatives from Kaduna State had also attended the event.  Senior representatives of Indian Renewable Energy Development Authority (IREDA), EXIM Bank, BHEL and Avada Group visited from India to participate in the event. Several senior representatives of Indian companies based in Nigeria such as Skipper Siel, Simba Group, etc. operating in renewable energy sector participated in the event.

Participation of Indian companies in various events organised in Nigeria: Indian High Commission also attended and also facilitated the participation of Indian Companies in various business events held in Nigeria such as the (i) Kaduna International Trade Fair (24 Feb – 5 March 2017); (ii) Nigeria Pharma Manufacturer’s Expo, Lagos (From 30 Aug- 1 September, 2017); (iii) Power Nigeria Exhibition, Lagos (5 September,2017); (iv) 12th Abuja Trade Fair, Abuja. (21 September – 7 Oct 2017) (iv) Future Energy Nigeria WAPIC Conference & Expo (7-8 November, 2017); (v) 39th Kaduna International Trade Fair (23 February – 03 March 18)

Development Cooperation

India is emerging as a development partner of Nigeria in two fronts –by offering developmental assistance through concessional loans and by offering capacity building training programmes.

Concessional Loans:

1. US $ 100 million LOC: India has offered a concessional loan [Line of Credit (LoCs)] amounting to US$ 100 million to Nigeria in the power sector including renewables. Two projects viz. Kaduna – US$ 30 million and Cross Rivers – US$ 30 million are in advance stages of implementation. The third project in the State of Enugu for US $ 40 million is also expected to be implemented soon.

2. US$ 75 million LoC: India has offered two concessional loans (LoCs) for Solar- related projects namely (i) 50 MW Solar Power Plant in Bauchi State of Nigeria for an amount of USD 66.60 million and (ii) Solar PV Renewable Micro-Utility (REMU) in six political zones of Nigeria for an amount of USD 8.36 million, during the International Solar Alliance (ISA) Founding Conference and Solar Summit held on March 11, 2018 in New Delhi.

Vehicles, pharmaceuticals, machinery,plastics, articles of iron & steel, apparel, organic chemicals and mineral fuels.

Minerals, fruits & nuts, aluminium, leather, machinery, lead, wood, tea, coffee, oil seeds.

HIGH COMMISSION OF INDIA ABUJA (NIGERIA)

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