Nigeria, the giant of Africa, is emerging as a prime destination for global business ventures. Boasting the fastest-growing population on the continent, strategic policies that support investments, and an abundance of resources. Nigeria offers a compelling environment for founders, professionals, business owners & leaders, consultants, and researchers.
In this article, we will explore three key reasons why Nigeria is an increasingly attractive hub for establishing and expanding businesses.
With a population exceeding 200 million people, Nigeria is the largest and fastest-growing population in Africa. According to World Population Review, Nigeria is expected to reach a population of 400 million people by 2050, making it the third most populous country in the world, only after China and India. This demographic magnitude is not merely a statistic but a strategic advantage for businesses looking to penetrate a large market.
The majority of Nigerians fall within the working-age bracket, signifying a youthful, dynamic, and evolving consumer base with a higher propensity to adopt new technologies and trends. This makes Nigeria a fertile ground for founders seeking to introduce innovative solutions.
Beyond its population advantage, Nigeria's geographical location in West Africa positions it as a gateway to the rest of the continent. The transportation infrastructure, including a network of airports and seaports, further enhances Nigeria's appeal. Nigeria’s seaports and airports not only facilitate the import and export of goods but also streamline the movement of professionals, fostering a seamless flow of talent and expertise.
Additionally, Nigeria’s economic vibrancy makes it a strategic hub for regional operations. Whether entering the market with products or services, establishing manufacturing facilities, or setting up regional offices, Nigeria provides a strategic location that minimizes logistical challenges and optimizes market reach.
Nigeria's historical reliance on oil as a primary economic driver has undergone a remarkable transformation. Recognizing the risks associated with over-dependence on a single commodity, the country has actively diversified its economic base. This deliberate shift has resulted in an increased resilience, enabling Nigeria to weather global economic fluctuations.
Sectors such as information & communication, manufacturing and electricity have emerged as pillars of Nigeria's diversified economy. The agricultural sector, in particular, has witnessed significant growth, contributing not only to food security but also to export revenue. The expansion of telecommunications and manufacturing further strengthens the foundation of a more balanced and sustainable economic landscape. This diversification mitigates the vulnerability associated with commodity price fluctuations and presents a spectrum of opportunities for businesses looking to invest in various sectors.
Diversification of the Nigerian economy has opened up a pathway for startups and global businesses to explore an untapped market. Whether in agribusiness, technology, or manufacturing, entrepreneurs can contribute to the nation's economic growth while establishing sustainable business models.
We’ve seen a rapid increase in the rise of technology startups, evident by the volume of foreign direct investment in the technology sector over the last few years. According to a report by TechCabal, Nigerian tech startups raised over one billion dollars ($1.3 Billion) in 2021, making up over 85% of all funding for startups in West Africa.
In the second quarter of 2023, the information communication and technology sector contributed 19.54% to the GDP of the Nigerian economy, which also contributes to the reasons as to why the Government has reiterated its commitment to the technology sector and digital economy. The government has an open arm to welcoming global businesses looking to expand and set up business operations in Nigeria.
Nigeria's strategic vision for economic growth is exemplified by the establishment of Free Trade Zones (FTZs). These zones serve as pivotal components of the country's economic strategy, aiming to attract and sustain foreign investments.
FTZs are designated areas where businesses enjoy a unique set of incentives designed to stimulate economic activity and bolster international trade. The incentives within FTZs include tax breaks, which significantly reduce the financial burden on businesses. This allows companies to channel resources that would have otherwise been allocated to taxes into core business operations, research and development, or expansion strategies. Customs duty exemptions within these zones also streamline import and export processes, fostering a more efficient and cost-effective environment for international trade.
The simplified regulatory processes within FTZs reduce bureaucratic hurdles, enabling businesses to navigate administrative procedures with greater ease. This not only saves time but also enhances the overall efficiency of operations, making these zones attractive for both domestic and international enterprises.
Nigeria's commitment to creating a conducive business environment extends to its tax policies. The government established a transparent and predictable tax framework, providing businesses with the confidence to invest and plan for the future. A prominent example is the Companies Income Tax (CIT) Act, which outlines a fair and consistent approach to taxation.
More recently, the Federal government of Nigeria, through the Ministry of Communication, Innovation, and Digital Economy has just launched the Nigeria Startup portal, with the aim to serve as a catalyst for the discovery and aggregation of digital and technology startups present in Nigeria, in order to facilitate engagement and support for players in the country's tech ecosystem.
The Nigeria Startup Portal also aims to contribute to the full implementation of the Nigeria Startup Act of 2022, which intends to offer structures, programs, and incentives to help Nigerian startups thrive, grow, add value, and lay the groundwork for distributing tech-enabled services throughout the nation and exporting them to other countries.
Itana is building a free zone to enable technology and service-based businesses to incorporate their companies fully online, from anywhere in the world, without the need to set up a physical presence in the country.
The zone is fitted with favorable policies, business incentives (such as tax breaks, immigration, the capacity to repatriate capital and conduct operations using foreign currency), and other e-services that enables your company to remotely incorporate and conduct operations in Nigeria.
Itana is building Africa's first free zone for the digital economy in close collaboration with the Nigeria Export Processing Authority (NEPZA), the authority that regulates all Free Zones in Nigeria. Upon incorporation, businesses in the free zone will receive a Certificate of Registration and a one-year renewable Operating License to carry out business operations within the zone.
Here’s how to set up a business in the Itana Zone:
1. Apply for a business license using this form, or join the Itana 100 – an exclusive group of 100 companies influencing policies in the zone.
2. If you meet the requirements for becoming an FZE, we’ll request some additional documentation such as details about your Board of Directors.
3. You’ll be required to pay a non-refundable application fee of $250 which is paid to the government.
It typically takes between two to four weeks to complete the registration process, after which you can begin to leverage the benefits as a free zone entity.
Nigeria stands out as a destination of choice for ounders, professionals, business owners & leaders, consultants, and researchers looking to launch new ventures or expand into this viable continent. The combination of a rapidly growing population, strategic policies promoting investment, and abundant resources make Nigeria a powerhouse in the African business landscape, and the go-to place for doing business in Africa.
As the country continues to evolve, and with the government’s continuous commitment to the “ease of doing business”, we’re excited to enable tech and service-based businesses to seamlessly set up, and operate from anywhere in the world. Click here to learn more.
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