Nigeria
Engaging Africa’s Largest Economy
Terence Yap
20 April 2017
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Economic Overview
Nigeria’s potential underpinned by size of its market
and its demographics
• Largest economy in Africa
US$415Bn, 21st largest in the world
MALI
THE
GAMBIA
GUINEA
BISSAU
• s
• Politically stable and
security situation improving
with terrorist threats and
militancy subdued
CHAD
BURKINA
FASO
GUINEA
SIERRA
• Most populous nation in Africa
with 186 mil (62% under 25 yrs)
NIGER
SENEGAL
LEONE
COTE
D’IVORE
SUDAN
DJIBOUTI
BENIN
• Diversified economy driven by
consumption and services
NIGERIA
CENTRAL
AFRICAN
REPUBLIC
SOUTH
SUDAN
CAMEROON
UGANDA
EQUATORIAL
GUINEA
REP. OF
THE
GABON CONGO
KENYA
DEMOCRATIC
REPUBLIC
RWANDA
OF THE CONGO BURUNDI
TANZANIA
ANGOLA
ZAMBIA
ZIMBABWE
NAMIBIA
BOTSWANA
• Long-term potential remains
positive despite recent
economic setbacks
ETHIOPIA
SWAZILAND
SOUTH
AFRICA
LESOTHO
Nigeria in 2050 – A Top 15 Global Economy
($ trillion)
Sources: World Bank, Goldman Sachs
Nigeria in 2016- Some distance behind its emerging
market peers
Comparison of 2016
econ indicators
Population (mil)
Nom GDP
(USD Bil)
GDP per cap
(USD)
Avg GDP growth
(2006-2015)
EoDB ranking*
Nigeria
Mexico
Indonesia
Turkey
186
122
259
79
415
1,063
941
736
2,260
8,699
3,636
9,317
6.4
2.4
5.8
3.9
169
47
91
69
*Note: 2017 Ease of Doing Business ranking for 190 countries
Sources: IMF, World Bank
A well-diversified domestic economy, but a narrow
export base
• Positive long term fundamentals,
driven by large, young and growing
population and urbanisation
• Non-oil economy constitutes 90.4% of
GDP
Composition of GDP (2015)
Services
53.3%
• Agriculture (23% of GDP) is the largest
single sector; Services make up 53%
while Manufacturing contributes
almost 10% to its GDP
• Resources (incl oil and gas) is only the
third-largest sector with a 9.6% share
• Oil and gas contributes 94% of hard
currency export earnings
Agriculture
23.1%
Manufacturing
9.5%
Natural
Resources
9.7%
O&G 9.6% +
Minerals 0.1%
Utilities
0.5%
Construction &
Real Estate
3.9%
SG-Nigeria Economic Ties
224 mil
Singapore’s Trade with Nigeria (SGD Mil)
700
600
500
400
300
200
100
0
583
289.8
7.7
21.1
2014
xx
19.7
2015
Import
224
2016
Export
ASA
BIT
Aug 16 - Signing of Air
Services Agreement
Nov 16 - Signing of
Bilateral Investment
Treaty
SG main exports
• Petrochemical
products
• Machine parts
• Tools
19.7 mil
SG main imports
• Cocoa beans
10%
of SG’s total DIA in
Africa (~SGD 2.3 Bil)
Economy has struggled due to oil price crash.. But
bottoming out
Nigeria - Real GDP growth (%)
16
14
12
2006-2015
Average growth rate:
10
6.4%
6
4
2015,
2.7%
0
-2
• Government defends NGN-USD
peg but devalues in black market;
capital flight amongst investors
• Govt imposes forex restrictions
on imports
8
2
• Low oil price impacted forex
earnings drastically
2016,
-1.7%
-4
2000 2002 2004 2006 2008 2010 2012 2014 2016
• Forex shortage leads to business
and consumption disruptions
• Economy slows down in 2015
and contracts in 2016
Emerging Trends =
Sector Opportunities
“Made in Nigeria” – Strong growth in import
substitution to stem forex outflow
Manufacturing sector growth from 2011-2015 is 13.3%,
fastest of all sectors
MNCs already manufacturing in Nigeria
Nigeria’s private sector is sophisticated and vibrant
Consumer Goods
Banking/Investment
Multi-sector
Oil & Gas/ Marine
GTIL
ICT/Tech
Hospitality
Nigeria’s Emerging Middle Class – Growing
discretionary income and strong consumerism
2014 GDP by expenditure
Exports 18.4%
Govt
Expenditure
7.4%
Young and rapidly growing
population
Median Age:
17.8
Imports
12.5%
Gross Capital
formation
15.8%
5
Household
Consumption
70.9%
Nigeria's population to hit 210m by 2021
Projected Growth In Consumption
7.1%
Source: UNCTAD
Consumer Spending To Hit $25Bn by 2020
Source: African Consumer and Retail Report by KPMG
Explosive growth of e-commerce over last 5 years
Online retail/
market place
Fashion
Overseas shopping
Groceries
80
Furniture
Non-store retail sales value (NGN Bil)
60
5-yr CAGR =
37.2%
40
20
0
2011
2012
Source: Euromonitor
2013
2014
2015
2016
Government hopes to harness private sector
partnerships/investments for infrastructure development
Triple nationwide passenger
handling capacity to 45 million
passengers by 2020
Concessions to run 4 biggest
airports in Nigeria:
• Lagos (7.2 mil passengers)
• Abuja (4.3 mil)
• Port Harcourt (1.2 mil)
• Kano (0.4 mil)
GE to invest USD 2 bil and run
parts of the country’s railway
on 20-year concession
To increase operational
capacity from current 3.2
GW* to 10 GW:
• small-scale power
generation projects
• Encourage privatesector participation
Proposed Family Homes
Fund on PPP model is
designed to improve access
to social housing. Expected
fund target of N1 trillion.
*Nigeria has total installed power generation capacity of 12.5GW, but only 3.2GW is estimated to
be operational in Nov-16.
Oil & gas set to return with price recovery
and production growth
 Oil prices recovering to the US$50-60 range
 Oil production fell to all-time low of 1.1 mil bpd in Aug-16
due to disruptions by Niger Delta militants and pipeline
sabotage. But ceasefire is holding and production returning
to 1.9-2.0 mil bpd
 But there is uncertainty on passage of Petroleum Industry
Reform Bill
Mil bpd
2.7
Nigeria Crude Oil Production
(annual average)
2.5
2.5
2.3
Nigeria Rig Count
2.2
2.2
2.1
1.8
1.9
1.7
1.5
2012-2015
2016
2017
2020
36
34
32
30
28
26
24
22
20
34
30
25
2014
2015
2016
?
2017
Challenges
Currency volatility for past 2 years, but situation is
improving
NGN to 1 USD
Forex Scarcity/Restrictions
 Government has imposed a ban on access to
forex to pay for 41 categories of essential
goods
 Businesses have trouble getting USD to pay
for overseas goods and services
Source: XE.com
Bureaucracy, red tape are common problems in
Nigeria
Business Environment
Indicators
Ease of Doing Business Rank (out
of 190)
Starting a Business
Registering Property
Getting Electricity
Corruption Perception Index (out
of 176)
2016
2017
170
169
137
182
182
138
182
180
136
(2015)
136
(2016)
Nigeria’s transport infrastructure has to play catchup
Source: World Economic Forum Global Competitiveness Report 2016-2017
Thank You
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This material contains confidential and/or official information.
The terms and conditions governing its use can be found at www.iesingapore.gov.sg/Terms-of-Use.