Nigeria

Nigeria is located in West Africa along the Gulf of Guinea of the Atlantic Ocean. It is a leading player on the African continent and a respected member of the community of nations. The capital that huge oil fields bring to the country has made it possible to build large cities and enterprises here, connected by a network of railways, and also promotes investment and business development.

General information

Official name of the state — Federal Republic of Nigeria. The state occupies an area of 923,768 km² (31st in the world). The population is about 220,291 275 people (as of the beginning of 2023).

There are about 300 nationalities in the country, the largest of which — Hausa and Fulani (north, 29% of the population), Yoruba (southwest, 21%), Igbo (southeast, 18%), Ijaw (southeast, 10%), Kanuri (northeast, 4%) . About 50% of the population professes Sunni Islam (the number of Shiites is less than 3 million people), up to 40% — Christianity (Catholics, Anglicans, Baptists, Pentecostals), others — traditional beliefs.

The official language of Nigeria is English; Edo, Efik, Adawama Fulfulde, Hausa, Idoma, Igbo, Central Kanuri, and Yoruba are also widely spoken among the population. There are a total of 527 languages in Nigeria, of which 514 are living, 2 are second without native speakers, 11 — dead. Local languages are used mainly for communication and in the media, and some languages are also taught in schools. The majority of the country's population speaks two or more languages. Knowledge of the English language depends on the level of education (English is mainly spoken by those who have completed primary school), type of activity and area of residence (in cities the level of language proficiency is higher than in rural areas). For various Nigerian languages in the 1980s. a pan-Nigerian alphabet was developed based on the Latin one.

The official currency of the country is the Nigerian naira.

Abuja — capital of the Federal Republic of Nigeria. Abuja is connected by road to most parts of the country. There is an international airport. There is no large industry in the city, but there are food processing enterprises, as well as retail and service enterprises.

Lagos — port city in southwestern Nigeria. With a population of over 13 million and a metropolitan area of approximately 21 million, Lagos is the largest city in the country and in Africa. It was the capital of Nigeria until December 12, 1991, when the capital was moved to the city of Abuja. The city is home to the main port of Nigeria, whose cargo turnover is about 6 million tons per year. The port's container terminal is currently the largest in the country. Lagos is home to approximately half of Nigeria's industry.

Ibadan — the country's third most populous city after Lagos and Kano. Due to its strategic location on the railway line connecting Lagos and Kano, the city is a major trading center for cassava, cocoa, cotton, timber, rubber and palm oil. The city and its surroundings are home to several industries such as agro-industry, textiles, food processing, healthcare and cosmetics, tobacco processing and cigarette manufacturing, leatherworking and furniture making, etc. Clay, kaolin and aquamarine are abundant in the city's surroundings. , and there are several cattle ranches, a dairy farm, as well as a commercial slaughterhouse in Ibadan. Dozens of banks and insurance companies serve millions of city residents.

The main economic activities engaged in by the people of Ibadan include agriculture, trade, government employment, factory employment, service sector/tertiary manufacturing, etc. The International Institute of Tropical Agriculture (IITA) is headquartered at extensive agricultural research base for key tropical crops such as bananas, corn, cassava, soybeans, cowpeas and yams.

Administratively, Nigeria is divided into 36 states and one Federal Capital Territory, which in turn are divided into 774 local government areas.

History, geography, culture, mentality

The earliest information about settlers in Nigeria dates back to the 9th century BC. Metal smelting furnaces dating back to the 6th century BC were found in Taruga — probably the oldest ever discovered. These lands were at the center of a large trading network of ancient Africa.

Islam arrived in Nigeria through the Bornu Empire (1068) and the Hausa city-states around 1385, while Christianity reached Nigeria in the 15th century through Augustinian and Capuchin monks from Portugal. The Songhai Empire, at one time, occupied part of the regions of modern Nigeria. In the 15th century, European slave traders arrived in the region to purchase enslaved Africans as part of the transatlantic slave trade that began in what is now Nigeria. The first Nigerian port used by European slave traders was Badagry. Local slave traders supplied Europeans with slaves, exacerbating conflicts between ethnic groups in the region and disrupting old trade routes through the Trans-Saharan route.

By the 16th century, dozens of kingdoms had formed, the largest of which was the Nri kingdom, founded in the 9th century. It existed for about 1 thousand years and, despite its small territory, had a huge cultural and political influence on southeastern Nigeria. Over time, more powerful states emerged, such as the empires of Yoruba, Ife, Oyo, Benin, the kingdom of Calabar, numerous city-states, and the influence of the Songhai kingdom and the Bornu kingdom increased.

At the end of the 19th century, in 1885, the British entered West Africa, and on January 1, 1901, Nigeria became a protectorate of the British Empire. In 1914, the so-called Colony and Protectorate of Nigeria was formed, formally divided into northern and southern territories, as well as the colony of Lagos. After the end of World War II, many nationalist movements emerged in the country, and Britain took steps to expand self-government for Nigeria. The country gained full independence in October 1960, becoming a parliamentary federal republic.

In October 1963, Nigeria was officially declared a federal republic, and Governor General Nnamdi Azikiwe became its first president. This was the so-called First Nigerian Republic. This period was characterized by tension and ethnic clashes caused, on the one hand, by the diversity of peoples and religions, and on the other — uneven economic development of the north and south of the country. This led to the removal of the President from power and the assassination of Prime Minister Abubakar Tafawa Balewa in a military coup on January 15, 1966.

A period of military rule followed, but it failed to resolve economic problems and internal tensions. The four regions were replaced by 12 states, but the eastern regions rejected this division, demanding autonomy. On May 29, 1967, Lieutenant Colonel Chukwuemeka Odumegwu Ojukwu declared the independence of the eastern regions under the name Republic of Biafra. This event marked the beginning of a civil war that led to the death of more than 1 million people and the victory of Biafra. Military rule was overthrown by a coup by General Murtala Mohamed in 1975, but a year later he was overthrown by a coup by General Olusegun Obasanjo. Nigeria began the transition to civilian rule and the creation of a new constitution. On December 31, 1983, the so-called Second Republic was overthrown and the Supreme Military Council (SMC) restored military rule.

 In 1985, General Ibrahim Babangida removed the heads of the Air Force, he restored freedom of speech, released all political prisoners and took measures to restore the economy. The so-called Third Republic was formed. At the end of 1992, presidential elections were held, which Mosud Abiola won. However, Babangida annulled the election results, which led to protests and clashes. Power was transferred to Ernest Shonekan. As a result of the chaos, on October 17, 1993, Defense Minister Sani Abacha pressured Shonekan into resigning. Abacha created a new military government that lasted until 1998, when he died of a heart attack. Power passed to Abdulsalami Abubakar and then to Olusegun Obasanjo, and the Fourth Republic was established.

The internal political situation in Nigeria continues to be tense. Conflicts between various ethnic and religious groups continue in the country, and social problems are increasing. Government actions to combat extremist Islamist group Boko Haram in northeastern Nigeria have not yet led to significant results. The security threat has led to an increase in the number of refugees and internally displaced persons in the Lake Chad region (about 2.6 million people, according to UN estimates).

In foreign policy, Nigeria strives to take the position of an important regional power in West Africa and through this paradigm determines its attitude to modern geopolitical realities. The government's main efforts are aimed at developing multi-vector diplomacy, mobilizing international support in the fight against terrorism, attracting foreign investment and assistance to ensure the socio-economic development of the country, as well as the return of illegally withdrawn capital.

In the west, the Republic of Nigeria borders on Benin, in the north — with Niger, in the northeast — with Chad, in the east — with Cameroon. From the south it is washed by the waters of the Gulf of Guinea of the Atlantic Ocean. The highest part of Nigeria is in the center, where the Jos Plateau rises.

Large oil and gas fields are located along the Atlantic coast (Ughelli, Bomu, Imo River, etc.), oil reserves are estimated at more than 2 billion tons of gas — more than 1 billion tons Deposits of coal (reserves of about 400 million tons), brown coal and lignite (200 million tons) are confined mainly to the Upper Cretaceous and Paleogene strata in the Enugu basin (Benue graben). Deposits of niobium, tin, tungsten and molybdenum are associated with “young” granites of the Jos plateau. There are also large deposits of uranium ores here. Gold deposits are being developed in the northwest (Birnin Gvari and others). In the sediments of the Benue graben, deposits of lead-zinc (Ameka, Nieba, Abakaliki, etc.), iron (Pati, reserves of about 2 billion tons, etc.) and titanium ores are exploited.

The coastal plain is washed by numerous rivers, including one of the largest rivers in Africa — Niger with its left tributary Benue and the Cross River (in the extreme southeast). These two rivers are the most important transport arteries in Nigeria.

Nigeria — one of those countries in which a wide variety of cultures have long been mixed, and there is practically no indigenous population left. The thing is that slaves were exiled to Nigeria to carry out agricultural work. Nigeria's traditional cultures have experienced and continue to experience the onslaught of foreign cultures. Muslim-Arab influence was limited to Northern Nigeria and has now become an organic element of the cultural traditions of this region. The south became an arena for the expansion of European culture and Christianity, which more than once led to acute conflicts with the traditional system of values and views.

To successfully establish contacts, conduct negotiations and further conduct business in the dynamic economy of Nigeria, it is necessary to take into account certain rules and customs of doing business, which have developed under the simultaneous influence of the cultures of both the traditional ethnic groups of the country and modern transnational corporations with a characteristic Western European way of life. Best Business Etiquette Strategy in Nigeria — flexible approach and willingness to improvise.

When negotiating as part of a delegation, it is important on your part not to show your Nigerian colleagues that your positions are inconsistent, since disagreements within the team can be perceived as serious problems for the entire business. Also, do not criticize members of your delegation in public — If necessary, it is better to talk to them in private.

If you plan to work from a pre-determined agenda, it is advisable to send it to the Nigerian partners in advance of the meeting, which will allow them to adequately prepare for the discussion and consult with key stakeholders.

In dealings with Nigerian businesses, it is advisable to be punctual, although it is always necessary to leave a reserve of time for unforeseen circumstances. Particularly given the heavy traffic in Nigeria, it is advisable to leave early for appointments. In general, it is also important to understand that Nigeria lives at a fairly calm and leisurely pace, even when it comes to doing business — so a meeting scheduled for 10 a.m. may well not take place until 3 p.m., if at all. In this regard, it is recommended to be as flexible as possible, but at the same time coordinate meetings in advance and confirm them the day before, asking partners about possible changes.

It is important to recognize Nigeria's religious diversity. Due to the fact that a significant part of the Nigerian population professes Islam, it is necessary to know and respect the peculiarities of Muslim customs. For example, try not to use your left hand when eating, or when passing things to people. Remember that dietary habits may be important for Nigerian partners (excluding alcohol, pork from the diet, fasting during Ramadan, etc.), as well as other elements of Muslim culture (performing namaz, especially communicating with women, etc.).

Use common European sign language with caution. For example, the “thumbs up” gesture, which in Western societies usually means that everything is fine, can be perceived as an insult in Nigeria.

Power

According to the 1999 constitution, the FRN is a presidential republic, the head of state also heads the federal government.

The legislative branch is represented by a bicameral parliament — National Assembly (Senate — 109 seats and House of Representatives — 360 seats).

The Nigerian judicial system consists of local courts within the states, federal courts, courts of appeal and the Supreme Court. In addition, Sharia courts operate in 13 states in northern Nigeria.

Economy

Nigeria is the largest African country in terms of population and one of the richest countries in Africa in terms of natural resource potential.

Nigeria's GDP in 2021 amounted to $441 billion. Nigeria's economy — 1st in this indicator in Africa and 31st in the world. The basis of the country's economy — extraction and processing of energy resources (42% of shipments in industrial production). The country's crude oil reserves are estimated at 37 billion barrels. The economy is highly dependent on fluctuations in world hydrocarbon prices. The services sector accounts for 58% of the Nigerian economy's revenue. Key subsectors are wholesale and retail trade (38%), construction and real estate (21%), information and communications (16%). Agriculture employs more than a third of the workforce and is dominated by small farmers, who provide about 90% of agricultural output. The sector is characterized by low productivity. The main crops are cassava, yams, corn, sorghum.

The socio-economic development of Nigeria is being implemented within the framework of the National Development Plan for the period 2021–2025, which is aimed at creating a diversified economy.

The main categories in the export structure are mineral products (90% of supplies - they were based on oil); agricultural products (3% - cocoa and cocoa products, oil seeds, fruits and nuts); machinery, equipment and vehicles (3% - floating platforms, ships and watercraft for scrapping); chemical industry products (2% — fertilizers, rubber and rubber products).

The country structure of exports is poorly differentiated. Key partners — India, Spain, France, Netherlands and Canada. Nigeria's main export to these countries — oil. Other countries account for 55% of the export structure; Nigeria also mainly supplies oil to them.

Nigeria ranks 4th in the world in cocoa production. Cocoa and cocoa products provide about 40% of Nigeria's agricultural exports, with cocoa beans accounting for 90% of the group's exports. The main consumers of Nigerian cocoa beans — large cocoa producers (EU countries, Malaysia, Indonesia, USA).

Nitrogen fertilizers, mainly urea, are gradually becoming more important in Nigeria's exports. The main consumer of fertilizers from Nigeria is Brazil, whose share was 89% in 2021. Also in 2021, Nigeria supplied fertilizers to Argentina, the USA and African countries (Burkina Faso, Cote d'Ivoire, Senegal, Niger).

Due to a shortage of domestic refining capacity, Nigeria is largely dependent on imports of petroleum products that are processed in other countries.

The main exporters of petroleum products to Nigeria — European countries, Russia, India, Republic of Korea.

The structure of imports of mechanical equipment and machinery, computers to Nigeria is quite diversified. The key products in this group are shut-off valves (10%); molding equipment for rubber and plastics (5%), filtering equipment and centrifuges, liquid pumps (5%). Key supplier of this group of goods to Nigeria — China, which accounted for 59% of imports in 2021. Also among the main suppliers are India, the USA and Italy. The key products supplied to Nigeria within the wheeled vehicle group are passenger cars (51% of the group's products), motorcycles and mopeds (18%), and trucks (10%). Main suppliers — USA (35%), China (23%), India (19%).

Nigeria has developed a number of agricultural industries, the products of which can be used in industry.

In particular, Nigeria ranks:

• 12th place in the world and 2nd place in Africa in rubber production
• 22nd place in the world and 8th place in Africa in cotton production

The country is also among the world's leading exporters of finished goatskin (share of 23% of global exports in 2021) and finished sheepskin (4%).

Nigeria produces manganese ores and concentrates. In 2021, Nigeria entered the top 20 world exporters of manganese ores.

The Federal Republic of Nigeria has signed and ratified the African Continental Free Trade Agreement (AfCFTA). It is a member of the Economic Community of West African States (ECOWAS), the Global System of Trade Preferences among Developing Countries (G.S.T.P.), and the Islamic G8. The country is included in the list of countries on the list of duty-free access to the US market under the African Growth and Opportunity Act.

Russia and Nigeria

Nigeria and Russia have maintained warm bilateral economic relations for many years. The joint Nigerian-Russian commission has become a strategic platform for economic cooperation. The joint commission is chaired by cabinet ministers from both countries and is expected to act as a catalyst for their concerted efforts to expand ties, including economic ties, and increase trade between them.

For Nigeria, Russia is a fairly significant import partner. In 2021, Russia provided 4% of supplies to Nigeria and took 6th place in the country's import structure.

The main exports from Russia to Nigeria are petroleum products and wheat, which in 2021 provided almost 90% of Russian supplies to the country. Exports also include sheet metal, potash and nitrogen fertilizers, frozen fish.

Russia is one of Nigeria's main wheat import partners; immune products, blood; unalloyed hot-rolled sheets; fertilizers.

One of the largest Russian companies, OK RUSAL, operates in Nigeria, owning 85% of the shares of the Nigerian aluminum production enterprise ALSCON. in the southeastern state of Akwa Ibom. PJSC "LUKOIL" participates together with other foreign corporations in an offshore project in Nigeria.

Business climate

Legal forms of business are governed by the Companies and Allied Matters Act (CAMA) of Nigeria, 2020 and include:

• limited liability companies
• company limited by guarantee
• unlimited liability companies

These company forms can be registered as private or public.

In accordance with the Nigerian Investment Promotion Commission (NIPC) Act and the Immigration Act, companies with foreign participation must be registered with the NIPC and obtain a business permit from the Federal Ministry of Home Affairs.

In Nigeria, there are restrictions on the acquisition of shares by foreign citizens in the following industries:

• oil and gas industry
• shipping
• advertising
• private security
• engineering
• aviation
• pharmaceuticals

To import into Nigeria, a participant in foreign economic activity must undergo registration procedures, including:

• register a company name in Nigeria;
• register the company with the Federal Inland Revenue Service (FIRS) and obtain a taxpayer identification number (TIN) when confirming tax payments;
• register as an importer and client of the Nigeria Single Window Trade Portal.

The Nigerian government is pursuing an import substitution strategy aimed at increasing local production. According to the Executive Order On Support for Local Content in Public Procurement by the Federal Government dated May 18, 2017, containing a list of products subject to local content requirements, all ministries, departments and Agencies must give preference to local goods producers and service providers when purchasing goods and services. The list includes: uniforms and shoes, food and drinks, furniture and fittings, stationery, cars, pharmaceuticals, building materials, ICT.

Investment climate

The Nigerian government has developed investment incentives to support private sector participation in almost all sectors of the economy. While some of these incentives come in the form of tax holidays, exemptions and concessions, there are many others that impact specific government policies, company performance, and relevant international investment agreements. Some of them:

• Income tax relief for a specified period, such as three years in some cases, which may be extended for a period of one year and then for another year or for one period of two years — benefits for pioneer status.
• Zero percent import duties (customs, excise and value added) on the import of agricultural equipment and equipment for processing agricultural products.
• Exemption of interest from tax on loans provided, for example, for agricultural activities.
• Exemption from value added tax (VAT).
• Access to the agricultural loan guarantee system, which is up to 75%.
• Double tax treaty that eliminates double taxation on income and capital gains.
• The Investment Promotion and Protection Agreement provides mutual basic investment protection.
• Nigeria is compliant with the African Growth and Opportunity Act (AGOA).

Business and investment support structures

Nigeria has several key business and investment support structures that contribute to the development of the country's economy:

• Nigerian Investment Service (Nigeria Investment Promotion Commission — NIPC). This agency supports and attracts investment into Nigeria. They provide information on investment opportunities, assist with market research, provide investment advice and assist with necessary permits.
• Development Bank of Nigeria (Bank of Industry — BOI). The BOI provides financing for industrial and economic development by supporting Nigerian companies through loans, guarantees and other financial instruments.
• Nigerian Entrepreneurs Association (The Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture — NACCIMA). It is the largest business association in Nigeria that advocates for business interests, provides information and training to entrepreneurs, and provides a platform for business connections and networking.
• National Institute of Consumer Protection of Nigeria (Consumer Protection Council of Nigeria — CPC). They protect consumer rights and promote a fair and transparent business environment.
• Nigerian Stock Exchange (Nigerian Stock Exchange — NSE). This is the main platform for trading securities and investing in Nigerian companies. It provides access to capital for companies through the issuance of shares and bonds.
• National Bank of Nigeria(Central Bank of Nigeria — CBN). As the country's central bank, the CBN plays a key role in regulating the financial system and promoting macroeconomic stability through monetary policy.
• National Agency for Science and Engineering Infrastructure — NASENI). This agency encourages and develops science, technology and engineering in the country. They support research and innovation, which contributes to the development of the innovation sector.
• Abdul Samad Rabiu International Center for Innovation and Entrepreneurship. The initiative aims to empower, promote and develop talent and skills on the African continent.

These entities work together to provide various aspects of business and investment support in Nigeria, providing the necessary tools, information and resources to develop the country's economy.