Despite the media, life has gotten better for humanity. In 1960 Norway had the longest life expectancy at 73.5 years. Today they would rank 100 on the list.
Whilst Africa has a lot of catching up to do, life has gotten better in this regard as well. In 1960 Nigerians were expected to live on average for 37 years. Today that number is 53. This represents a 43% improvement for Nigerians.
As they gain access to better food, health, educational resources and connection to the world, Nigerian life expectancy should increase even more. The best way to improve the position is for companies to invest in countries like Nigeria, even if it is only for their bottom line….. because an investment in their economy IS a sustainable investment in the people who live in it. And that is a good thing.
And if it is the bottom line which drives the decision to enter a market, then it is good to know the following about Nigeria:
Following on from the improved life expectancy, the longer people live, the longer they consume and become consumers for diversified goods and services as they age.
A single person in their 20’s is likely to consume differently than a married person in their 40’s. The bigger the surviving population, the greater the demand for consumption.
Therefore, the uptick – and continually trending uptick – in life expectancy in a country with a population of 190 million is good news – if you want to make a profit. For a pharma company that could mean millions of new customers on cholesterol management medication. For an FMCG company that would mean increasing and diversifying supplies. For a car manufacturer, that is a lot more drivers on the roads and a larger demand for vehicles. Consumption becomes a big issue in a large and aging and growing population, and if you provide goods and services for consumption then this is very good news indeed.
Nigeria has a large economy – second biggest in Africa. But consider that Nigeria has a massive informal economy which is not counted in official GDP numbers. It is calculated that the Nigerian informal economy is 65% of its GDP. This is a huge number and it is a cash number. That market does not work on credit. It is real cash being spent on goods and services and it makes total bottom line sense to try an be a part of that! So if you thought Nigeria had a big economy, you were wrong… it is much bigger than you realised!
Since the new millennium, gross domestic income per capita has increased by over 800 percent, from $270 to over $2,450.
In recent months, African nations have been in the process of creating, signing and ratifying the African Continental Free Trade Area (AfCFTA). The agreement is one of the largest trade liberalisation efforts since the founding of the World Trade Organization in 1995.
It aims to improve trade within the continent by immediately removing tariffs on 90 per cent of goods, with the remaining 10 per cent of tariffs on “sensitive goods” phasing out over time.
In 2016, just 18 per cent of Africa’s total exports were traded within the African continent. In Europe and Asia, intra-regional trade accounted for 69 per cent and 59 per cent of total exports respectively.
A large research initiative by the Nigerian Office for Trade Negotiations found that the impact of AfCFTA on Nigeria would be staggeringly high.
The bottom line is that expanding into the Nigerian market is good for the bottom line and, in a lovely unintended way, it is good for Nigeria and the people of Africa.
How do you begin to do market research in Nigeria?
That’s simple…. you either send us and enquiry or visit the rest of our website and then do the same. We have offices and boots on the ground in Nigeria. We know the lay of the land and our way around. Call us today to see how we can partner together to deliver on your Nigerian market research agenda.