Entrepreneurship Zone: 05 December 2024: Opportunities in Nigeria: From building materials to health supplements

Thu Dec 5 09:49:03 CAT 2024

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Entrepreneurship Zone: 05 December 2024: Opportunities in Nigeria: From
building materials to health supplements

 <https://www.firstcapitalbank.co.zw/> 

Lagos, Nigeria

Interview with Thessa Bagu
FOUNDER AND MANAGING DIRECTOR, NAIJALINK LIMITED (now COMMERCIUM AFRICA)

Lives in: Lagos, Nigeria

  _____  

Thessa Bagu is the founder and managing director of Naijalink Limited, a
market entry and advisory firm focusing on international companies seeking
to do business in Nigeria. Dutch-born Bagu has been living in Nigeria since
2006. Betsy G Henderson spoke to her about opportunities in Nigeria and some
of the foreign investment success stories she has come across.

Highlight some of the industries in Nigeria you believe hold the greatest
opportunities for foreign investors.

Opportunities are everywhere in Nigeria. It depends on your approach to the
market.

There are a lot of prospects in agriculture because Nigeria wants to be as
self-sufficient as possible as the food import bill is too high. In terms of
agriculture, I would suggest farming inputs and low-tech equipment that help
farmers be more efficient: seeds, agro-chemicals as well as mechanisation
and irrigation technologies.

Beef processing, livestock rearing and aquaculture offer possibilities;
again, because Nigeria imports more than it produces. Cattle fattening is a
new focus owing to conflict between ethnic groups in traditional grazing
areas. This has promise if you can do it on a large scale and efficiently.

Another really big sector is construction. Nigeria is one of the largest
construction markets in the world. The country needs building materials and
equipment, from cranes to tiles and everything in-between as most of these
are currently imported. But you need a good price or quality proposition.
There are options in either low-cost building materials for the mass market
or supplies for high-end finishes. For example, businesspeople can focus on
the big mansions and flats that are being built here in Lagos, which require
nice finishes, such as taps and door handles.

There is also potential in education and healthcare if you have facilities
that can compete with international standards. Nigerians spend a lot on
educational training overseas and almost $1 billion a year on medical
tourism to go abroad for serious medical care.

Another industry of interest would be health supplements. People don’t like
to go to doctors and prefer to buy over-the-counter products at the
pharmacy. Food supplements and immune boosters are a huge market. There are
also a lot of children who need care and supplies. One successful market
entry over the past few years was a Turkish diaper manufacturer that
captured significant market share by providing a local alternative for
diapers.

Solar energy would be another good option, for residential homes and
industry. For example, Heineken – or Nigerian Breweries, as it is called
here – announced it is transitioning to solar energy and biomass. There is
potential to cater for individual households because you either don’t have
electricity or, if you do, you don’t have enough. Everybody depends on
expensive diesel/petrol generators.

You cannot talk about Nigeria and not talk about digital solutions. Lagos
is home to three unicorns (tech companies with valuations in excess of $1
billion), and it’s amazing to see what is happening in the digital space. At
the same time, about 80% of all software is imported. Cloud services are
highly untapped, as are data centres.

Another area is mining. Nigeria has 44 natural minerals in commercial
quantities and apart from the quarrying side of mining, there is always a
need for equipment. People are going into areas such as gold mining and
zinc. It’s not just setting up a mine, but also mining services, mining
technology and support.

Identify some of the foreign investment/trade success stories you’ve come
across in your work.

There are so many of those. Usually people think of the bigger companies,
like MTN, DStv, Uber, Microsoft, and Google but there are many other
examples.

Last year, we worked with an Irish company called Revive that is the number
one vitamin and dietary supplement company in Ireland. It sourced a partner
in Nigeria and went from having very small shipments to being all over the
country and having a very handsome revenue from Nigeria. The products are
some of the most expensive on shelves but also the best quality. It is a
good example of positioning at the high end of the market.

Then there is the University of Limerick, also from Ireland. It started to
promote its courses in 2015 and has a representative in the region. By
taking the market seriously and being in people’s faces, it grew from almost
no Nigerian students to Nigeria being the university’s second-largest
market.

I know of a horticultural seed company that is another success story. Its
intention was not to make a quick buck but to add value to Nigerian
customers and grow the market. It has only been here a few years and is
already one of the largest seed companies.

Another is a tech company that provides solar lamps for the poultry
industry. It’s a niche but much-needed product because there is often not
much electricity on the farms. Poultry raising requires a lot of lamps and
the company is doing well.

We’ve also worked with a UK company in oil and gas solutions. It puts a
tent onto oil rigs to create a safe zone that enables welding without
shutting down production. In Nigeria, if you want to be successful, you’re
either dirt cheap or you bring a novel solution to a problem.

Providing quality products and working with an effective partner with an
on-the-ground presence, capacity building with clients, and providing
cost-effective solutions to persistent problems are all factors that
contributed to these respective companies’ success.

Overall, to be successful here, you have to commit to this country. You
need to have a capable partner and you must support that partner to do well,
or get your own boots on the ground. However, you cannot appoint a
distributor and sit in your armchair in another country. It’s not easy,
things can take a long time, and Nigeria is not a cheap place to operate.
But if you commit, have a long-term goal in mind, and work with capable
people, you can have a successful business in Nigeria. At the end of the
day, Nigeria is a relationship economy; who you work with matters.

—Howwemadeitinafrica

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