Business in Nigeria my Tip
Before we talk about business in Nigeria, we would need to know more about it. Not only because we like to do business, but we also need to know about our country in the future.
Located on the western coast of Africa, Nigeria is an extensive and highly populated country with over 180 million people. This means the West African country has both skilled and unskilled labor in plenty. Nigeria’s high population also makes it a fertile ground for global trade and commerce.
Apart from having a high population, Nigeria is also known for its mineral resources and oil deposits. In sub-Saharan Africa, Nigeria is the largest producer and exporter of oil, while it ranks 13th in the global arena. Its abundant natural resources and large deposits of natural gas and petroleum makes it a prime destination for global investment.
Apart from its natural resources, Nigeria has a vast agricultural potential thanks to its size and soil quality; now, the western African nation should have been an economic giant.
Despite the availability of skilled and unskilled labour, fertile land, natural resources, and geographical proximity, Nigeria struggles to realize its potential. Due to this fact, most of its resources become more of a weakness instead of a strength.
Key Facts About Nigeria
- Region: West Africa
- Capital City: Abuja
- Population: About 200 million
- Landmass: About 924,000 square kilometres
- Gained Independence: 1st October 1960
- Commonwealth Youth Index: 35
- Joined Commonwealth: Immediately after gaining independence
After careful examination, it is evident Nigeria’s most distinct attribute is its people. The West African country hosts hundreds of ethnic communities that include the Fula, Yoruba, Igbo, Edo, Tiv, and Ibibio. Despite the different languages present in the country, English is predominantly spoken and recognized as the official language.
As Nigeria’s former capital city, Lagos is a well-known state in Nigeria and Africa due to good and wrong reasons. First and foremost, Lagos is widely known as Africa’s largest city, with some of the outstanding business suits and skyscrapers mushrooming in the city.
As one of Africa’s highly populated cities, Lagos is also the highest populated state in Nigeria, overflowing with driven, determined, and well-educated Nigerians. With more than 20 million citizens residing in the city, Lagos is an excellent option for individuals seeking investment opportunities in Nigeria.
However, there are a few things that make the city less favorable. Factors such as frequent power cuts and outages, which happen several times a day, insecurity cases, and substandard infrastructure, give the city a bad name.
Originally, Lagos was a small fishing village inhabited by natives before being discovered by Portuguese traders, who arrived in the area in the 15th Century. Since then, the city grew into prominence, becoming Nigeria’s capital city until the early 1990s when Abuja became the capital city.
It is estimated that the population of Lagos grows by approximately 500,000 people each year. At present, it is estimated Lagos hosts more than 20 million people, and as the population of the city grows, its physical size grows as well.
Many people migrate to Lagos in search of opportunities in industries and the informal market. From above, Lagos is a beautiful city to behold, thanks to its high-rise buildings, sprawling suburbs, and busy roads.
However, the city is filled with motorbikes, yellow taxis, and noisy generators that act as a useful energy source due to the unreliable energy supply at the street level. Lagos might not be Nigeria’s capital city, but it retains its significance as a commerce and trade center. At present, over 80 percent of Nigeria’s manufacturing industries are situated within the town.
In West Africa, Lagos acts as a critical town in its economic frontier, thanks to its international airport and seaport.
One of Nigeria’s most outstanding and distinctive feature is the size of its population. With probably more than 200 million people, Nigeria’s population is more than double that of Egypt, the next largest African country. Egypt’s population is about 60 million.
Nigeria’s population is so significant that it represents more than 20 percent of sub-Saharan Africa’s total population. A large percentage of Nigeria’s population resides in the coastal area, while a significant percentage also prefer settling along the northern river basin such as the Sokoto and Kano plains.
The population distribution in Nigeria is unevenly dispersed, with the population density around the southwest region such as Lagos, Owerri, and Enugu recording more than 400 inhabitants per kilometer. Compared with other Nigerian regions, Central and West Nigeria, southwest Nigeria region has an unmatched population density with the greatest concentration.
Some of Nigeria’s 21 states have more people than other West African countries combined, such as the Igbo regions of southeast Nigeria. They are believed to have one of the highest rural densities in the continent. Despite the government trying to discourage migration in the country, Nigeria’s migration pattern remains to be rural to urban.
Where is Nigeria?
Nigeria is an independent country that is located on the western side of Africa. With a coast at the Gulf of Guinea and Bight of Benin, the West African country is one of the region’s geographically placed countries. Nigeria shares a maritime border with Sao Tome and Principe, Equatorial Guinea, and Ghana while bordering Cameroon, Benin, Niger, and Chad.
Nigeria’s highest point is Gangirwal, also known as Chappal Waddi, with 7,900 feet, located on Cameroon’s border. With a landmass that measures 928,700 square kilometers, Nigeria is almost four times larger than the United Kingdom or slightly two times larger than California.
At present, Abuja is the capital city of Nigeria, situated in the center of the country.
At present, about 250 ethnic groups are residing in Nigeria. Each ethnic community occupies a territory that considers its birthright by being the first to occupants and inheritance. Individuals of other communities who migrate and settle in areas not perceived as their ancestral land are regarded as invaders.
In most rural areas, such aliens are not permitted to acquire outright title to land. However, many people of different backgrounds have migrated to other ethnic territories, searching for land and opportunity.
The three major ethnic groups in Nigeria are the Igbo, Hausa-Fulani, and Yoruba. Nigeria’s rich cultural heritage is highly influenced by western European and Arabic culture. However, each tribe has its distinct traditions and customary practices they follow.
The Naira is the official monetary unit used in Nigeria, and it is divided into 100 Kobos.
The Central Bank of Nigeria is the only financial institution in the country to have the authority to print and issue the legal tender. The CBK of Nigeria’s work is to regulate the amount of Naira in circulation at any given time to ensure the stability and value of their shilling.
How to Open a Company in Nigeria?
It is important to know the proper channels to follow when deciding to participate in the Nigerian market. There are various business structures available for foreigners wishing to open a new business in the country; companies, sole proprietorships, incorporated trustees, and partnerships.
It is essential to know the best business structure that meets your business needs and expectations as it will determine the cost, regulatory, legal, tax, and financial risk implications.
Steps to Follow When Registering a Company in Nigeria
Search and Find Company Name
Finding a company name is the first stage in registering a company in Nigeria.
Prepare an MOA
A lawyer best does the preparation of a Memorandum of Association and any other related documents.
Fill the Registration Forms
At this stage, the following needs to be satisfied:
- At least two directors should satisfy the requirements of appointing a Company Secretary for the business
- An individual or company should fill and satisfy the Declaration of Compliance
- The Company Secretary and at least one director should fill and satisfy the Situation/Change of Registration Address form
- At least one director should fill and satisfy the requirements of the Return of Allotment and Statement of Share Capital
- All the directors of the company should fill and satisfy the Particulars of Director form
Pay for the Filing Fee and the Stamp Duty
After filling and compiling all the forms, the Stamp Duty payment should be made at the Federal Inland Revenue Services offices.
Prepare a Signed Scan Copy of All Your Documents
After preparing and scanning all the signed copies, you should upload them online as follows:
- Receipt showing payment to CAC
- Memorandum and Articles of Association
- Identification documents for Directors, Subscribers, and the Secretary
- Form CAC1.1
Submit Original Documents
The final step is sharing all the original documents that you scanned in the previous step.
The Nigerian government is known for its quest to woo and welcome both local and foreign investors in the market in its hope to create more employment opportunities for its ever-bulging young population.
At present, Nigeria is known to have one of the fastest-growing economies in the region and one of the continent’s highest GNP. Having one of Africa’s largest populations and the 3rd largest manufacturing sector, Nigeria has plenty to offer to potential investors. A youthful labour force that offers both skilled and unskilled labour is in plenty.
Aside from its economic and business side, the African country has a rich culture. Its Naija music is played and enjoyed globally, promising foreign investors a good time after work.