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Nigeria

Executive Summary

This country fact sheet provides key trade, investment and tourism related statistics for the Nigeria. Specifically, it

shows global trade and investment flows including an analysis of top markets and products for Nigeria in relation

to South Africa and the Western Cape, highlighting the largest and fastest growing products and sub-sectors. It

also investigates tourism trends for Nigeria. The key highlights in the fact sheet are provided below:

TRADE

Nigeria was a net exporter of goods in 2013. Global exports from Nigeria were valued at ZAR924.5bn in

2013 compared to ZAR1.2trn in 2012, decreasing by 21%.

Global imports in 2013 were valued at ZAR458.7bn compared to ZAR239bn in 2012, increasing by 56%.

Transportation was the largest services export from Nigeria valued at ZAR10.6bn.

South Africa is the 9th largest destination market for Nigeria’s exports and the 12th largest source market

for Nigerian imports.

South Africa exported goods to Nigeria valued at ZAR7.6bn in 2013 compared to ZAR6.1bn in 2012,

representing an increase of 24%.

Imported goods from Nigeria to South Africa were valued at ZAR35bn in 2013 compared to ZAR31bn in

2012, increasing by 14.5%.

South Africa is a net importer from Nigeria.

FDI

The most attractive sectors for inward investment (projects) in Nigeria were communications (13%), coal,

oil and gas (12%) and financial services (10%).

The largest markets for FDI into Nigeria were the United States (16%), the United Kingdom (11%) and

South Africa (11%).

Between January 2003 and July 2014 a total of 5 FDI projects were recorded from Nigeria into South

Africa. These projects represent a total capital investment of ZAR1.26bn which is an average investment

of ZAR251.45m per project.

Between January 2003 and July 2014 a total of 47 FDI projects were recorded from South Africa into

Nigeria. These projects represent a total capital investment of ZAR28.72bn which is an average

investment of ZAR610.86m per project.

A total of 14 FDI projects were recorded from the Western Cape to Nigeria. These projects represent a

total capital investment of ZAR1.72bn which is an average investment of ZAR122.99m per project.

TOURISM

Outbound travel from Nigeria is expected to reach 949,380 in 2018, up from 634,470 in 2013.

Nigeria’s arrivals to South Africa reached 84,589 in 2013, growing by 15.4% from 2012.

Nigeria’s arrivals to the Western Cape reached 13,450 in 2013, growing by 58.2% from 2012.

2

1. Country Overview

Nigeria is located in West Africa and shares land borders with the Republic of Benin in the west, Chad and

Cameroon in the east, and Niger in the north. Its coast in the south lies on the Gulf of Guinea on the Atlantic Ocean.

With a population of 175 million people, Nigeria is the most populous country in Africa and the 7 th most populous

country in the world.

Nigeria is a Federal Republic modelled after the United States, with executive power exercised by the president

with overtones of the Westminster System model in the composition and management of the upper and lower

houses of the bicameral legislature. Nigeria is a member of the Common Wealth of Nations and maintains

membership in the Organization of the Petroleum Exporting Countries (OPEC), which it joined in July 1971.

GENERAL INFORMATION

Official Country Name Nigeria

Capital Abuja

Government type Federal Republic

Chief of State President Goodluck Jonathan

Population (July 2013 est.) 174,507,539

Life expectancy 52.46 years

Literacy 61.3%

Ethnic groups Hausa and Fulani 29%, Yoruba 21%, Igbo (Ibo) 18%, Ijaw 10%, Kanuri 4%, Ibibio 3.5%, Tiv 2.5%

Religions Muslim 50%, Christian 40%, indigenous beliefs 10%

Languages English (official), Hausa, Yoruba, Igbo (Ibo), Fulani, over 500 additional indigenous languages

HDI (2013) 0.504

Sources: CIA World Factbook, 2014, World Bank Data, 2014

2. Economic Overview

Nigeria is classified as an emerging market, and has already reached middle income status according to the World

Bank, with its abundant supply of natural resources, well-developed financial, legal, communications, transport

sectors and its stock exchange (the Nigerian Stock Exchange), which is the second largest in Africa after the JSE.

Nigeria’s GDP (PPP) was valued at USD478bn in 2013, making Nigeria the 31st largest economy in the world.

Nigeria’s economic growth has remained robust in 2013 at 5.5%. According to Citigroup, Nigeria will achieve the

highest average GDP growth in the world between 2010 and 2050.

Nigeria also has a wide array of underexploited mineral resources which include natural gas, coal, bauxite, tantalite,

gold, tin, iron ore, limestone, niobium, lead and zinc. Despite huge deposits of these natural resources, the mining

industry in Nigeria is still in its infancy. Nigeria has one of the fastest growing telecommunications markets in the

world with major emerging market operators like MTN, Etisalat, Zain and Globacom boasting their largest and most

profitable centres in the country.

Despite oil’s dominance, agriculture plays a significant role in the Nigerian economy, accounting for 33% of GDP.

At one time, Nigeria was the world's largest exporter of groundnuts, cocoa, and palm oil and a significant producer

of coconuts, citrus fruits, maize, pearl millet, cassava, yams and sugar cane.

3

ECONOMIC INFORMATION

GDP (PPP) (2013 est.) USD478.5bn

GDP growth (2014 est.) 6.2%

GDP per capita (2013 est.) USD2,800

Inflation (2013 est.) 8.7%

Lending Rate (2013 est.) 15.5%

Unemployment rate (2011 est.) 23.9%

Exports (2013 est.) USD93.55bn

Imports (2013 est.) USD55.98bn

FDI Inflow (2013) ZAR46.3bn

FDI Outflow (2013) ZAR1.3bn

Doing Business in...(2015 ranking) 170

Source: CIA World Factbook, 2014; Doing Business in Nigeria, 2014

The figure below illustrates the GDP value and growth for Nigeria’s economy for the period 2004 to 2018f. The

economy has been experiencing a steady increase in GDP over the period. The Nigerian economy faced numerous

challenges which impacted overall economic activity in 2012. Declines in the real growth rates of economic activity

were experienced in both the oil and non-oil sectors. Oil production was less than expected due to security

challenges, and floods which occurred in the latter part of the year, while the non-oil sector (notably agriculture,

wholesale & retail trade) was mostly affected by the floods and weaker consumer demand. This dip in growth is

expected to recover in 2013 and even further into 2014f to 6.2%.

The net effect of the lower oil price will be negative with the currency and external and fiscal accounts being areas

that are particularly at risk. The lower oil prices shouldn’t lead to a sharp slowdown in headline economic growth

although this expectation will become less certain if inflation spikes sharply higher. Underpinning these improved

GDP figures is the forecast that the non-oil economy will be the engine of output expansion in Nigeria (BMI, 2014).

Source: BMI, 2014

The contributions of Nigeria’s economic sectors to GDP in 2012 are depicted in the figure below. The largest

contributor is the mining, manufacturing, utilities sector (39%), followed by the agriculture, hunting, forestry and

fishing sector, accounting for 33% of GDP. This is followed by the wholesale, retail trade, restaurants and hotels

sector which contributes 16%.

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

GDP (USDbn) 87,2 111,5 145,6 166,6 207,3 168,4 361,6 404,0 451,5 503,0 556,8 612,4 672,3 735,0 803,1

growth (%) 33,7 3,4 8,2 6,8 6,3 6,9 7,8 5,3 4,2 5,5 6,2 6,5 6,9 6,9 7,0

0

5

10

15

20

25

30

35

40

0

100

200

300

400

500

600

700

800

900

Gro

wth

(%)

Valu

e (

US

Dbn)

NIGERIA GDP & GDP GROWTH, 2004-2018f

4

Source: UNCTAD, 2014

Nigeria has the 10th largest oil reserves in the world and the 2nd largest in Africa after Libya. According to BMI

(2014) a decline in Nigerian proved oil reserves is demonstrating the impact of lower levels of exploration activity

in the country since 2005. Security problems related to oil theft and pipeline interference and investment

uncertainties about the Petroleum Industry Bill (PIB) have contributed to a slowing exploration scene, especially by

large international companies. Therefore the forecast, according to BMI, is that Nigerian oil reserves will slightly

decline over the forecast period (2017).

Source: BMI, 2014

Agriculture, hunting, forestry, fishing

33%

Mining, manufacturing, utilities39%

Construction1%

Wholesale, retail trade, restaurants &

hotels16%

Transport, storage and communications

3%

Other activities8%

NIGERIA SECTOR CONTRIBUTION TO GDP, 2012

2012 2013 2014 2015 2016 2017

oil reserves, bn bbl 37,2 37,2 35,0 35,1 35,0 34,7

% growth 0,0 0,0 -5,8 0,3 -0,6 -0,6

-7

-6

-5

-4

-3

-2

-1

0

1

33

34

34

35

35

36

36

37

37

38

% G

row

th

Bn b

bl

NIGERIAN OIL RESERVES, 2012-2017f

5

2.1 Companies in Nigeria

Dangote Cement is the only Nigerian company on the Forbes global 2000, an annual list of the world's 2000 largest

publicly listed corporations. Six out of the top 10 companies in Nigeria are in the finance and banking sector and

three are in the food and beverage sector. The table below gives the top 10 companies and the sectors within

which they operate:

TOP 10 LARGEST COMPANIES IN NIGERIA, 2013

RANK COMPANY SECTOR MARKET CAPITAL (M NGN) 2014

1 Nigerian Breweries Plc Food & Beverages 1,210,864

2 First Bank Banking and Finance 310,983

3 Zenith Banking and Finance 654,616

4 UBA Banking and Finance 153,363

5 GTBank Banking and Finance 688,689

6 Guinness Nigeria Plc Food & Beverages 237,930

7 Dangote Sugar Food & Beverages 73,800

8 EcoBank Banking and Finance 388,085

9 Nestle Nigeria Food & Beverages 685,647

10 Stanbic IBTC Banking and Finance 284,700

Source: The Nigerian Stock Exchange, 2014, Bloomberg, 2014

2.2 Doing Business in Nigeria

The table below shows Nigeria’s ease of doing business in 2015. According to the World Bank’s Doing Business

2015 report, Nigeria is ranked 170th out of 189 countries in terms of the ease of doing business. Nigeria’s best

ranking sub-categories are getting credit (52nd), and protecting minority investors (62nd).

NIGERIA’S EASE OF DOING BUSINESS, 2015

SELECTED INDICATORS RANKING OUT OF 189

COUNTRIES, 2015

Starting a Business 129

Dealing with Construction Permits 171

Getting Electricity 187

Registering Property 185

Getting Credit 52

Protecting Investors 62

Paying Taxes 179

Trading Across Borders 159

Enforcing Contracts 140

Resolving Insolvency 131

Doing Business 2014 170

Source: Cost of Doing Business, 2014

The Nigerian market is particularly lucrative for businesses in consumer-centric industries, such as

telecommunications, retail, agriculture and transportation, however persistent risks such as low credit and limited

infrastructure continue to deter investors and reduce trade-flows (BMI, 2014). Nigeria's score of 26.1 out of 100 for

Investment and Trade Openness in BMI's Trade and Investment Risk Index puts it in 40th place regionally out of

the 44 countries covered. This score places it between Sudan and Kenya.

6

2.3 Nigeria’s Risk Ratings

Nigeria’s sovereign risk status and its capacity to meet its financial commitments is shown below. An obligation

rated 'BB' is less vulnerable to non-payment than other speculative issues. However, according to ratings agencies,

it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could

lead to the obligor's inadequate capacity to meet its financial commitment on the obligation. A negative indicates

that the rating may be lowered, whereas a positive indicates that the rating may be raised.

NIGERIA’S COUNTRY RATINGS

STANDARD & POORS SOVEREIGN RATINGS FITCH RATING MOODY'S RATINGS

Local Currency

Rating

Foreign Currency

Rating

T&C

Assessment Credit Rating Credit Rating

BB- BB- BB+ BB- (stable) Ba3

Source: Standard & Poors, 2014, Trading Economics

The table below shows Nigeria’s risk assessment in terms of export transactions and direct investments according

to ONDD. Ratings are between 1 and 7, and between A and C, with 7 and C being the maximum risk indicators.

The political risk in Nigeria is highest in the medium-term. All categories of direct investment risk, i.e. war risk, risk

of expropriation and government action and transfer risk are all above 5 indicating a high risk for direct investments.

NIGERIA’S RISK ASSESSMENT

EXPORT TRANSACTIONS

Political Risks

Short Term 4

Medium-Long term 5

Special Transactions 4

Commercial Risk C

DIRECT INVESTMENTS

War risk 6

Risk of expropriation and government action 6

Transfer risk 5

Source: ONDD, 2014

2.4 Logistics

Nigeria's total road network is one of the longest in the world, stretching to 193,200km. The majority of the country's

cities, airports and ports are linked by main roads, with the best connections being in the southern port cities,

particularly Lagos, which is the location of Nigeria's only major expressways. Four Trans-African Highways traverse

Nigeria. Three of these converge on Lagos, with one heading west to Dakar in Senegal, one east to Mombasa in

Kenya, and one north to Algiers in Algeria. The final highway runs west to east from Dakar to Ndjamena in Chad,

via Kano in northern Nigeria. These routes provide the main links to Nigeria's neighbours, with three highways in

total crossing the border to Benin, two to Cameroon and three to Niger, offering regional trade links for investors

(BMI, 2014). These road connections are particularly important for Niger as it seeks to return to using Nigeria's

ports for its imports and exports.

The map below shows the main cities, boundaries and roads in Nigeria.

7

Source: d-maps.com

8

2 Trade

3.1 Trade in Services

In 2013 Nigeria experienced the highest trade in services, particularly in terms of imports over the ten year period.

The highest peak for exports was seen in 2011, when the import of goods reached its peak. The exports of services

in 2013 grew by 15% to reach ZAR23bn. In terms of global imports Nigeria grew by 9% in 2013 to reach ZAR214bn.

Over the period analysed Nigeria had a negative trade balance over the period. The highest deficit was in 2013

(ZAR191bn).

Source: TradeMap, 2014

The table below shows Nigeria’s trade in services for 2013. Transportation was the largest services export valued

at ZAR10.6bn. This was followed by travel and government services valued at ZAR5.2bn and ZAR4.2bn

respectively.

Transportation was the largest import service into Nigeria valued at ZAR81.8bn followed by travel and other

business services valued at ZAR56.6bn and ZAR33.7bn respectively.

TOP SERVICES EXPORTED BY NIGERIA, 2013 TOP SERVICES IMPORTED BY NIGERIA, 2013

CODE SERVICE VALUE

2013 (ZARbn)

% GROWTH 2012-2013

CODE SERVICE VALUE

2013 (ZARbn)

% GROWTH 2012-2013

205 Transportation 10.6 -7.26 205 Transportation 81.8 2.69

236 Travel 5.2 14.12 236 Travel 56.6 12.27

291 Government services, n.i.e. 4.2 52.41 268 Other business services 33.7 -6.45

268 Other business services 1.9 330.71 291 Government services, n.i.e. 16.6 32.41

245 Communications services 0.5 20.07 260 Financial services 7.2 102.46

260 Financial services 0.2 129.77 253 Insurance services 5.5 -8.46

253 Insurance services 0.0 171.49 245 Communications services 5.5 62.68

262 Computer and information services

3.0 109.05

266 Royalties and license fees 2.4 17.41

249 Construction services 1.0 14.00

TOTAL EXPORTS 22.7 15.04 TOTAL IMPORTS 213.6 8.63


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Exports (ZARbn) 21,36 11,35 15,41 10,14 18,36 18,39 22,53 24,35 19,72 22,68

Imports (ZARbn) 38,24 41,92 93,35 128,86 197,74 155,07 156,05 176,70 196,65 213,61

Trade Balance (ZARbn) -16,88 -30,58 -77,94 -118,73 -179,38 -136,67 -133,51 -152,34 -176,93 -190,93

-250

-200

-150

-100

-50

0

50

100

150

200

250

Va

lue

(Z

AR

bn

)

NIGERIA TRADE IN SERVICES, 2004-2013

9

3.2 Nigeria’s Global Trade in products

The figure below illustrates the trend in Nigeria’s global trade from 2006 to 2013. Nigeria was a net exporter of

goods over the period. Global exports were valued at ZAR924.5bn in 2013 compared to ZAR1.17trn in 2012,

decreasing by 21%. Global imports in 2013 were valued at ZAR458.7bn compared to ZAR239bn in 2012,

increasing by 56%. Exports peaked in 2012 and imports peaked in 2011, just above 2013 levels.

Nigeria’s exports, excluding all petroleum products would be ZAR27.92bn. This demonstrates the large reliance

that Nigeria has on their petroleum exports to remain a net exporter.


The table below shows Nigeria’s top 10 destination markets for 2013. India is the leading export market for Nigeria

with a value of ZAR132.13bn. The United States and Brazil rank second and third valued at ZAR115.09bn and

ZAR92.64bn respectively. Five of the top 10 destination countries are European states. South Africa is Nigeria’s

9th largest importer, importing ZAR34.73bn worth of goods in 2013, growing by 14% from 2012.

TOP 10 DESTINATION COUNTRIES FOR NIGERIA’S

EXPORTS, 2013

RANK COUNTRY

VALUE

2013

(ZARbn)

%

GROWTH

2012-2013

1 India 132.13 15.7%

2 United States 115.09 -27.9%

3 Brazil 92.64 41.4%

4 Spain 72.31 -2.6%

5 Netherlands 72.16 -12.0%

6 Germany 52.44 12.5%

7 France 48.40 23.7%

8 United Kingdom 46.69 -4.5%

9 South Africa 34.73 14.0%

10 Japan 34.01 -12.9%

TOTAL EXPORTS 924.53 -21%


2006 2007 2008 2009 2010 2011 2012 2013

Exports (ZARbn) 397,0 379,1 663,7 414,2 630,9 903,4 1 170,8 924,5

Imports (ZARbn) 153,5 227,3 228,7 281,2 322,4 460,0 293,4 458,7

Trade Balance (ZARbn) 243,4 151,8 435,0 133,0 308,5 443,4 877,4 465,8

0

200

400

600

800

1000

1200

1400

Valu

e (

ZA

Rbn)

NIGERIA GLOBAL TRADE IN PRODUCTS, 2006-2013

10

Fifteenth largest exporter of cocoa

and cocoa preparations

Nigeria's exports represent 0.5% of world exports and it is ranked 38th in world exports

Tenth largest exporter of mineral

fuels, oils and distillation projects

3rd largest importer of bird skin, feathers,

artificial flowers and human hair

Nigeria's imports represent 0.3% of world imports

and it is ranked 54th in world imports

Ninth largest importer of special,

woven or tufted fabric, lace, tapestry etc.

The table below shows Nigeria’s global import markets for 2013. China was the leading import market, valued at

ZAR115.67bn. The United States and the Netherlands were ranked second and third valued at ZAR62.17bn and

ZAR33.35bn respectively. Five of the top 10 source markets are fellow Asian countries. South Africa is the 12th

largest exporter to Nigeria, exporting goods to the value of ZAR7.76bn in 2013.

TOP 10 SOURCE MARKETS FOR NIGERIA'S IMPORTS,

2013

RANK COUNTRY

VALUE

2013

(ZARbn)

%

GROWTH

2012-2013

1 China 115.67 52.1%

2 United States 62.17 48.6%

3 Netherlands 33.35 17.7%

4 India 27.82 20.3%

5 Belgium 27.53 76.2%

6 United Kingdom 23.28 12.8%

7 France 19.41 37.1%

8 Germany 17.60 31.6%

9 Republic of Korea 15.08 116.0%

10 Italy 10.68 19.3%

12 South Africa 7.76 20.7%

TOTAL IMPORTS 458.7 56.36%


The hexagons below show that Nigeria is the tenth largest global exporter of mineral fuels, oils and distillation

projects and the fifteenth largest exporter of cocoa and cocoa preparations. Nigeria is the third largest importer of

bird skins, feathers, artificial flowers and human hair. Nigeria is the ninth largest global importer of special woven

or tufted fabric, lace and tapestry.


11

The table below shows Nigeria’s top 10 traded products for 2013. Crude petroleum oil was the leading export

product category, valued at ZAR769bn, a 5% decrease from 2012 figures. Petroleum gases and refined petroleum

oils ranked second and third valued at ZAR110bn and ZAR17.4bn respectively. Petroleum gases were the fastest

growing export from Nigeria in 2013, growing by 50% from 2012. After petroleum, cocoa is the country’s most

important export. Nigeria is the fourth-largest producer of cocoa beans in the world, behind Côte d’Ivoire, Ghana

and Indonesia. After petroleum, cocoa is the country’s most important export.

Refined petroleum oil was the leading imported product in Nigeria, valued at ZAR84.73bn, with a growth of 1840%.

Cars and wheat and meslin were ranked second and third at ZAR19.29bn and ZAR13.45bn respectively. Light

vessels had the highest growth from 2012 to 2013 of 2220%.

TOP 10 PRODUCTS EXPORTED BY NIGERIA, 2013 TOP 10 PRODUCTS IMPORTED BY NIGERIA, 2013

RANK PRODUCT

VALUE

2013

(ZARbn)

%

GROWTH

2012-2013

RANK PRODUCT

VALUE

2013

(ZARbn)

%

GROWTH

2012-2013

1 Crude petroleum oils 769.26 -5.0% 1 Petroleum oils, not crude 84.73 1840.1%

2 Petroleum gases 109.95 49.9% 2 Cars (incl. station wagon) 19.29 -34.6%

3 Petroleum oils, not crude 17.41 -82.7% 3 Wheat and meslin 13.45 10.3%

4 Cocoa beans, whole or broken,

raw or roasted 5.17 -79.1% 4

Light vessel, dredger; floating

dock; floating/submersible drill

platform

8.72 2219.8%

5 Oil seeds 2.37 -41.8% 5 Medicament mixtures (not 3002,

3005, 3006), put in dosage 8.34 310.1%

6 Copper waste and scrap 1.61 - 6 Electric app for line telephony,

incl. current line system 7.01 -9.5%

7 Natural rubber, balata, gutta-

percha etc 1.58 -98.1% 7 Motorcycles, side-cars 6.21 13.3%

8 Unwrought aluminium 1.29 4.0% 8

Cane or beet sugar and

chemically pure sucrose, in solid

form

5.73 -26.1%

9 Cocoa butter, fat and oil 1.16 -11.8% 9 Trucks, motor vehicles for the

transport of goods 5.63 -36.2%

10

Light vessel, dredger; floating

dock; floating/submersible drill

platform

1.05 -78.7% 10 New pneumatic tires, of rubber 5.56 77.2%

TOTAL EXPORTS 924.53 -21% TOTAL IMPORTS 458.7 56.36%


12

3.3 Trade with South Africa

The figure below shows trade between South Africa and Nigeria from 2004 to 2013. South Africa had a trade deficit

with Nigeria over the period, mainly due to the import of petroleum products. South Africa exported goods to Nigeria

valued at ZAR7.5bn in 2013 compared to ZAR6.1bn in 2012, representing an increase of 24%, while imported

goods were valued at ZAR34.9bn in 2013 compared to ZAR30.5bn in 2012, increasing by a 14.5%.


The table below shows the top 10 exports and imports between South Africa and Nigeria in 2013. The leading

export product was motor vehicles valued at ZAR1.5bn. Polymers of propylene (ZAR612m), motor vehicles for

transport of people, except buses (ZAR576.9m), and hot rolled products (ZAR522.7m). Twenty-seven percent of

South African exports to Nigeria were in the automotive sector. Between 2012 and 2013, the highest growth in

exports was recorded for unwrought aluminium (1079.6%).

The leading import product into South Africa from Nigeria was crude petroleum oil valued at ZAR34.6bn, followed

by petroleum gases (ZAR107.9m) and lead waste (ZAR62.5m). Crude petroleum oil makes up 99% South African

imports, indicating the low level of non-oil imports. Between 2012 and 2013 the highest growth in imports was

recorded for ground nuts 1661%, in the food and beverage sector.

TOP 10 SOUTH AFRICAN EXPORTS TO NIGERIA, 2013 TOP 10 SOUTH AFRICAN IMPORTS FROM NIGERIA, 2013

RANK PRODUCT

VALUE

2013

(ZARm)

%

GROWTH

2012-2013

RANK PRODUCT

VALUE

2013

(ZARm)

%

GROWTH

2012-2013

1 Motor vehicles for the transport of

goods 1480.24 8.65 1

Petroleum oils, oils from bituminous minerals, crude

34663.61 14.36

2 Polymers of propylene, other olefins

in primary forms 612.11 48.79 2

Petroleum gases and other gaseous hydrocarbons

107.96 -

3 Motor vehicles for transport of

persons (except buses) 576.85 -15.51 3 Lead waste or scrap 62.53 -33.75

4 Hot-rolled products, iron/steel,

width>600mm, not clad 522.69 -9.14 4

Wigs, false beards, eyebrows and eyelashes

40.38 109.97

5 Apples, pears and quinces, fresh 355.29 462.51 5 Natural rubber and gums, in primary form, plates, etc.

27.63 -57.04

6 Structures, parts of structures of

iron or steel, nes 247.65 81.93 6

Calculators, cash registers, ticket-machines, etc.

15.79 -

7 Unwrought aluminium 183.31 1079.60 7 Other spices 8.93 41.91

8 Food preparations, nes 161.21 19.71 8 Synthetic staple fibres, not processed for spinning

7.67 -

9 Angles, shapes and sections of iron

or non-alloy steel 117.38 52.68 9

Ground-nuts, not roasted or otherwise cooked

6.84 1661.18

10 Uncoated paper for writing, printing,

office machines 115.04 41.23 10

Electric apparatus for line telephony, telegraphy

5.40 319.64

TOTAL EXPORTS 7560.94 24.17 TOTAL IMPORTS 34989.34 14.54


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Exports (ZARm) 2 895 3 286 3 845 4 559 7 101 5 411 4 357 5 606 6 089 7 561

Imports (ZARm) 5 195 4 164 9 286 12 480 15 744 15 600 16 083 22 665 30 549 34 989

Trade Balance (ZARm) -2 300 -878 -5 441 -7 921 -8 643 -10 189 -11 726 -17 059 -24 460 -27 428

-40 000

-30 000

-20 000

-10 000

0

10 000

20 000

30 000

40 000

Valu

e (

ZA

Rm

)

TRADE BETWEEN SOUTH AFRICA AND NIGERIA, 2004-2013

13

3.4 Trade with the Western Cape

The figure below shows trade between the Western Cape and Nigeria from 2004 to 2013. The province exported

goods to the value of ZAR1.6bn in 2013 compared to ZAR1.1bn in 2012, representing an increase of 43%, while

imported goods were valued at ZAR13.6bn in 2013 compared to ZAR17.1bn in 2012, decreasing by 21%. From

2004 the Western Cape has demonstrated a negative trade balance with Nigeria.

Source: Quantec, 2014

The table below shows the top 10 traded products between the Western Cape and Nigeria in 2013. Hot rolled iron

or steel was the leading export product category to Nigeria from the Western Cape in 2013, valued at ZAR523m.

This product has not always been the top exports, in fact in 2010 and 2011 exports of this product were recorded

as zero. This export was followed by apples, pears and quinces (ZAR322m) and grape wines (ZAR106m). There

was a large growth in the export of apples, pears and quinces (446%) from 2012 to 2013. Factors contributing to

this growth was the 2012/2013 growth in production (14%) and prices (5.5%) (Department of Agriculture, Forestry

and Fishing, 2014). Other high export growth was seen in iron and steel structures (180%).

TOP 10 WESTERN CAPE EXPORTS TO NIGERIA, 2013 TOP 10 WESTERN CAPE IMPORTS FROM NIGERIA, 2013

RANK PRODUCT

VALUE

2013

(ZARm)

%

GROWTH

2012-2013

RANK PRODUCT

VALUE

2013

(ZARm)

%

GROWTH

2012-2013

1 Hot-rolled products, iron/steel, width>600mm, not clad

522.60 12.64 1 Petroleum oils, oils from bituminous minerals, crude

13 577.79 -20.80

2 Apples, pears and quinces, fresh 322.47 446.35 2 Synthetic staple fibres, not processed for spinning

7.67 -

3 Grape wines(including fortified), alcoholic grape must

105.96 34.84 3 Crustaceans 2.10 -

4 Fruit and vegetable juices, not fermented or spirited

76.25 41.75 4 Food preparations, nes 0.90 25 250.83

5 Passenger and goods transport ships, boats

56.26 13.62 5 Liquid, gas centrifuges, filtering, purifying machines

0.55 4.17

6 Liqueur, spirits and undenatured ethyl alcohol <80%

54.81 69.28 6 Pumps for liquids 0.41 1567.45

7 Structures, parts of structures of iron or steel, nes

51.33 179.76 7 Other spices 0.30 -22.09

8 Paper, board, clay, inorganic coated at least one side

28.65 53.98 8 Oil-cake other than soya-bean or groundnut

0.21 -

9 Industrial food and drink preparation machinery nes

27.29 17.41 9 Containers for compressed, liquefied gas, iron, steel

0.15 -73.55

10 Flour etc. of meat, fish or offal for animal feed

15.58 128.27 10 Mixed odoriferous substances for industrial use

0.15 -

TOTAL EXPORTS 1 642.14 43.15 TOTAL IMPORTS 13 591.50 -20.73

Source: Quantec, 2014

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Exports (ZARm) 413 623 1 078 921 897 571 485 830 1 147 1 642

Imports (ZARm) 1 968 1 915 4 728 7 555 6 724 9 267 5 298 9 769 17 147 13 592

Trade Balance (ZARm) -1 555 -1 292 -3 650 -6 634 -5 828 -8 695 -4 813 -8 939 -16 000 -11 949

-20 000

-15 000

-10 000

-5 000

0

5 000

10 000

15 000

20 000

Valu

e (

ZA

Rm

)

WESTERN CAPE TRADE WITH NIGERIA, 2004-2013

14

The leading import products into the Western Cape from Nigeria included crude petroleum oil valued at ZAR13.6bn.

This top import is followed by synthetic, staple fibres valued at ZAR8m and parts and crustaceans (ZAR2m). The

highest growth of 25 250% was for food preparations, however, this was from a very low base of only ZAR3,569 in

2012.

3.5 Trade agreements

Currently there is not FTA between South Africa and Nigeria. In 2013, the countries entered into an informal

agreement of cooperation, highlighting the automotive sector.

The Nigeria - South Africa Chamber of Commerce also serves to improve and facilitate bi-lateral trade relationships

between Nigeria and South Africa. Its offices are in Lagos, Nigeria and it has in its membership 315 companies

currently trading in both Nigeria and South Africa. It is made up of blue-chip companies, Nigerian companies and

South African companies.

3.6 Trade regulations and standards

Standards

The Standards Organization of Nigeria (SON) registers and regulates standard marks and specifications. The

National Agency for Food and Drug Administration and Control (NAFDAC) provides testing and certification of

imported and domestically produced food, drug, cosmetic, medical, water and chemical products. These agencies

provide the information for the certification of products.

Labelling

The Nigerian government requires that products entering the country must display information including: name of

product, country of origin, specifications, date of manufacture, batch or lot number, standards to which they were

produced (e.g. BS, DIN, ISO/IEC, NIS, etc.) and in the case of items such as soap, food and drinks and related

products, they should carry the expiration date or the shelf life, as well as active ingredient(s), where applicable.

Also, all items entering the country must be labelled in metric terms exclusively. Products with dual or multiple

markings will be confiscated or refused entry.

3.7 Tariffs

Tariffs imposed on South African exports to Nigeria for 2013 are listed below. The highest tariff of 30.2% is seen

in the export of animal, vegetable fats and oils, cleavage products.

TARIFFS IMPOSED ON SOUTH AFRICAN EXPORTS BY NIGERIA, 2013

HS CODE AND PRODUCT

DESCRIPTION

TARIFF

(%)

HS CODE AND PRODUCT

DESCRIPTION

TARIFF

(%)

HS CODE AND PRODUCT

DESCRIPTION

TARIFF

(%)

H01: Live animals 12.50 H33: Essential oils, perfumes,

cosmetics, toiletries 13.20 H65: Headgear and parts thereof 10.90

H02: Meat and edible meat offal 20.00 H34: Soaps, lubricants, waxes,

candles, modelling pastes 17.50

H66: Umbrellas, walking-sticks,

seat-sticks, whips 19.40

H03: Fish, crustaceans, molluscs,

aquatic invertebrates 10.70

H35: Albuminoids, modified

starches, glues, enzymes 9.80

H67: Bird skin, feathers, artificial

flowers, human hair 20.00

H04: Dairy products, eggs, honey,

edible animal product 9.90

H36: Explosives, pyrotechnics,

matches, pyrophorics 11.70

H68: Stone, plaster, cement,

asbestos, mica, articles 16.30

H05: Products of animal origin 5.00 H37: Photographic or

cinematographic goods 16.20 H69: Ceramic products 20.00

H06: Live trees, plants, bulbs, roots,

cut flowers 12.50

H38: Miscellaneous chemical

products 8.40 H70: Glass and glassware 14.00

H07: Edible vegetables and certain

roots and tubers 19.80 H39: Plastics and articles thereof 10.50

H71: Pearls, precious stones,

metals, coin 17.80

H08: Edible fruit, nuts, peel of citrus

fruit, melons 19.10 H40: Rubber and articles thereof 14.10 H72: Iron and steel 17.70

15

TARIFFS IMPOSED ON SOUTH AFRICAN EXPORTS BY NIGERIA, 2013

HS CODE AND PRODUCT

DESCRIPTION

TARIFF

(%)

HS CODE AND PRODUCT

DESCRIPTION

TARIFF

(%)

HS CODE AND PRODUCT

DESCRIPTION

TARIFF

(%)

H09: Coffee, tea, mate and spices 13.20 H41: Raw hides and skins (other

than furskins) and leather 9.90 H73: Articles of iron or steel 16.90

H10: Cereals 7.70 H42: Articles of leather, animal gut,

harness, travel goods 19.40 H74: Copper and articles thereof 8.90

H11: Milling products, malt,

starches, inulin, wheat gluten 24.20

H43: Furskins and artificial fur,

manufactures thereof 6.40 H75: Nickel and articles thereof 18.80

H12: Oil seed, oleagic fruits, grain,

seed, fruit, 8.30

H44: Wood and articles of wood,

wood charcoal 15.60 H76: Aluminium and articles thereof 14.90

H13: Lac, gums, resins, vegetable

saps and extracts 5.00 H45: Cork and articles of cork 6.80 H78: Lead and articles thereof 9.40

H14: Vegetable plaiting materials,

vegetable products 5.00

H46: Manufactures of plaiting

material, basketwork, etc. 20.00 H79: Zinc and articles thereof 6.90

H15: Animal, vegetable fats and

oils, cleavage products, 30.20

H47: Pulp of wood, fibrous

cellulosic material, waste 5.00 H80: Tin and articles thereof 18.30

H16: Meat, fish and seafood food

preparations 20.00

H48: Paper & paperboard, articles

of pulp, paper and board 10.30

H81: Other base metals, cermets,

articles thereof 14.10

H17: Sugars and sugar

confectionery 18.50

H49: Printed books, newspapers,

pictures 3.20

H82: Tools, implements, cutlery, of

base metal 14.30

H18: Cocoa and cocoa preparations 17.80 H50: Silk 5.80 H83: Miscellaneous articles of base

metal 17.40

H19: Cereal, flour, starch, milk

preparations and products 16.00

H51: Wool, animal hair, horsehair

yarn and fabric thereof 5.90

H84: Nuclear reactors, boilers,

machinery 6.40

H20: Vegetable, fruit, nut food

preparations 16.80 H52: Cotton 5.90

H85: Electrical, electronic

equipment 10.10

H21: Miscellaneous edible

preparations 15.00

H53: Vegetable textile fibres paper

yarn, woven fabric 5.20

H86: Railway, tramway locomotives,

rolling stock, equipment 5.00

H22: Beverages, spirits and vinegar 18.10 H54: Manmade filaments 19.00 H87: Vehicles other than railway,

tramway 12.20

H23: Residues, wastes of food

industry, animal fodder 10.00 H55: Manmade staple fibres 14.30

H88: Aircraft, spacecraft, and parts

thereof 4.20

H24: Tobacco and manufactured

tobacco substitutes 23.70

H56: Wadding, felt, nonwovens,

yarns, twine, cordage 19.00

H89: Ships, boats and other floating

structures 5.10

H25: Salt, sulphur, earth, stone,

plaster, lime and cement 19.00

H57: Carpets and other textile floor

coverings 20.00

H90: Optical, photo, technical,

medical apparatus 5.90

H26: Ores, slag and ash 5.00 H58: Special woven or tufted fabric,

lace, tapestry 19.90

H91: Clocks and watches and parts

thereof 20.00

H27: Mineral fuels, oils, distillation

products, 7.40

H59: Impregnated, coated or

laminated textile fabric 11.90

H92: Musical instruments, parts and

accessories 5.00

H28: Inorganic chemicals, precious

metal compound, isotopes 5.10 H60: Knitted or crocheted fabric 20.00

H93: Arms and ammunition, parts

and accessories thereof -

H29: Organic chemicals 6.50 H61: Articles of apparel,

accessories, knit or crochet 20.00

H94: Furniture, lighting, signs,

prefabricated buildings 20.60

H30: Pharmaceutical products 13.60 H62: Articles of apparel,

accessories, not knit or crochet 20.00 H95: Toys, games, sports requisites 19.70

H31: Fertilizers 0.00 H63: Other made textile articles,

sets, worn clothing 19.80

H96: Miscellaneous manufactured

articles 21.10

H32: Tanning, dyeing extracts,

tannins, derivatives, pigments 11.20

H64: Footwear, gaiters and the like,

parts thereof 13.10

H97: Works of art, collectors pieces

and antiques 20.00


NOTE: Exporters should not take the HS2 tariff as conclusive and as the actual tariff that will be applied to the exported product.

The tariffs indicated above are average tariffs and for products within the category it may be higher or lower than indicated. Where

the tariff is zero it can be assumed that there is zero tariff applicable to all products within that HS code. Tariffs are determined

according to the importing country’s national tariff line from the HS6 level and upwards. Exporters are advised to visit

www.macmap.org to determine the exact tariff applicable to the product at HS6.

http://www.macmap.org/

16

3.8 Port-to-Port

The table below shows the distance and time it takes goods to travel from Cape Town Port terminal to Nigerian

ports.

TRANSIT TIME FROM CAPE TOWN TERMINAL TO VARIOUS PORTS IN NIGERIA, 2013

TERMINAL DISTANCE TRANSIT TIME

Harcourt 4545.88km 7 days 7 hours

Lagos 4802.06km 7 days 17 hours

Tincan 4809.17km 7 days 17 hours

Onne 4517.43km 7 days 6 hours

Warri 4589.49km 7 days 9 hours

Brass 4610.25km 7 days 9 hours

Odudu 4508.72km 7 days 5 hours

Source: SeaRates, 2014

17

3 Foreign Direct Investment

Nigeria is hampered by the low level of domestic credit to businesses and consumers owing to high interest rates,

poor logistics and social infrastructure, a low skilled workforce and limited trade agreements. These factors

increase business risks for investors, with a strong likelihood of significant margin erosion if not properly managed.

Despite these limitations, Nigeria remains an attractive destination for FDI and portfolio investments on the back of

government incentives, an active capital market and large domestic consumer base.

4.1 Global FDI into Nigeria

Between January 2003 and July 2014 a total of 444 FDI projects were recorded into Nigeria. These projects

represent a total capital investment of ZAR670.40bn which is an average investment of ZAR1,510.07m per project.

During the period, a total of 97,581 jobs were created. FDI value peaked in 2008 with ZAR158bn, whereas projects

peaked in 2012 with 61 projects.

Source: FDI Intelligence, 2014

The United States was the largest source market for inward FDI into Nigeria in terms of projects, with 72

investment projects, which accounted for 16.2% of projects. The United Kingdom and South Africa are ranked

second and third accounting for 11.5% and 10.6% respectively. The biggest investment from the United States

into Nigeria was by the Global Energy Group in 2005 with a value of ZAR14.4bn.

TOP 10 SOURCE MARKETS FOR FDI INTO NIGERIA, 2003 – JULY 2014

RANK COUNTRY PROJECTS %PROJECTS CAPEX

(ZARm) % CAPEX COMPANIES % COMPANIES

1 United States 72 16.22 83 863.5 12.51 54 15.70

2 United Kingdom 51 11.49 33 842.6 5.05 41 11.92

3 South Africa 47 10.59 28 720.7 4.28 35 10.17

4 India 37 8.33 75 776.8 11.30 27 7.85

5 France 22 4.95 54 689.1 8.16 17 4.94

6 Germany 16 3.60 2 291.1 0.34 14 4.07

7 Japan 16 3.60 5 478.6 0.82 15 4.36

8 South Korea 15 3.38 14 066.9 2.10 8 2.33

9 UAE 13 2.93 17 863.9 2.66 11 3.20

10 Singapore 11 2.48 8 942.9 1.33 6 1.74

Other countries 144 32.43 344 868 51.44 116 33.72

TOTAL 444 100.00 670 403.6 100.00 344 100.00


2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Capex 32667 44627 97417 71382 22571 157557 35157 63196 25746 32916 40882 46285

Projects 27 19 35 25 20 41 43 34 50 61 58 31

10

20

30

40

50

60

70

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

180 000

Pro

jects

Valu

e (

ZA

Rm

)

INWARD FDI INTO NIGERIA, 2003-JULY 2014

18

The figures below show global inward FDI into Nigeria by sector, for the period January 2003 to July 2014 by

number of projects and CAPEX. Communications and coal, oil and natural gas accounted for 13% and 12% of FDI

projects respectively. In terms of CAPEX, coal, oil and natural gas received 58% and communications received

17%. These two sectors received the most projects and capex, indicating their overall attractiveness in promoting

inward FDI.


Nokia and Shoprite were the largest source companies for inward FDI into Nigeria in terms of projects, with 7

investment projects each. Samsung Electronics was ranked third with 5 projects.

TOP 10 SOURCE COMPANIES FOR FDI INTO NIGERIA, 2003 – JULY 2014

RANK COMPANY SOURCE

COUNTRY SECTOR PROJECTS

CAPEX

(ZARm)

1 Nokia Finland Communications 7 179.0

2 Shoprite South Africa Food & Tobacco 7 810.4

3 Samsung Electronics West Africa South Korea Consumer Electronics 5 489.2

4 Airtel Nigeria India Communications 4 8 000.6

5 Eleme Petrochemicals Singapore Alternative/renewable energy 4 4 049.2

6 Lafarge Africa (Lafarge Cement WAPCO Nigeria)

France Coal, oil and natural gas 4 11 833.9

7 Standard Chartered Bank United Kingdom Financial Services 4 300.6

8 IBM United States Software & IT 4 615.6

9 Guinness Nigeria United Kingdom Beverages 3 1 953.5

10 General Electric (GE) United States Automotives 3 3 658.3


Coal, Oil & Natural

Gas58%

Communications16%

Alternative/Renewable

energy7%

Chemicals2%

Real Estate2%

Hotels & Tourism

2%

Building & Construction

Materials2%

Beverages2%

Food & Tobacco

2%

Other Sectors

6%

Warehousing & Storage

1%

FDI INTO NIGERIABY SECTOR (CAPEX), 2003-JULY 2014

Communications13% Coal, Oil &

Natural Gas12%

Financial Services

10%

Food & Tobacco

8%Business Services

8%

Software & IT services

6%

Consumer Products

4%

Hotels & Tourism

3%

Beverages3%

Other sectors

33%

FDI INTO NIGERIA BY SECTOR (PROJECTS), 2003-JULY 2014

19

4.2 Global FDI from Nigeria

Between January 2003 and July 2014 a total of 138 FDI projects were recorded from Nigeria. These projects

represent a total capital investment of ZAR53.04bn which is an average investment of ZAR384.69m per project.

During the period, a total of 16,703 jobs were created. The graph shows that outward FDI from Nigeria peaked in

2013 at ZAR20.9bn and in 2008 with 26 projects. High investment levels from Nigeria in 2013 are not in line with

global trends, which see declining capex investments in 2013, however the previous level of investment from

Nigeria has not reflected their economic strength and into the future they are likely to invest in other sectors to

diversify their oil reliance.


The table below shows the destination markets for outward FDI from Nigeria from January 2003 to July 2014.

Ghana was the largest destination market in terms of projects, with 35 investment projects, which accounted for

25% of all projects. Uganda and Kenya are ranked second and third accounting for 7% and 5% respectively. All of

the top ten destination markets are fellow African countries apart from the United Kingdom (ranked 5th).

TOP 10 DESTINATION MARKETS FOR FDI OUT OF NIGERIA, 2003–JULY 2014

RANK COUNTRY PROJECTS % PROJECTS CAPEX (ZARm) % CAPEX COMPANIES

1 Ghana 35 25.36 7 197.8 13.57 23

2 Uganda 9 6.52 934.7 1.76 5

3 Kenya 7 5.07 3 730.8 7.03 6

4 Sierra Leone 7 5.07 1 764.3 3.33 4

5 United Kingdom 6 4.35 1 161.6 2.19 6

6 South Africa 5 3.62 1 255.9 2.37 5

7 Congo (DRC) 5 3.62 1 613.9 3.04 3

8 Rwanda 5 3.62 375.8 0.71 2

9 Cote d'Ivoire (Ivory Coast) 5 3.62 2 330.0 4.39 5

10 Liberia 4 2.90 463.3 0.87 4

Other Countries 50 36 32 215 61

TOTAL 138 100.00 53 043.0 100.00 46


2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Capex 243 149 171 2 396 1 173 5 041 4 981 4 455 7 335 4 873 20 914 1 311

Projects 1 2 3 7 6 26 24 14 18 7 22 8

5

10

15

20

25

30

0

5 000

10 000

15 000

20 000

25 000

Pro

jects

Valu

e (

ZA

Rm

)

OUTWARD FDI FROM NIGERIA, 2003-JULY 2014

20

The figures below show Nigeria’s global outward FDI by sector, for the period January 2003 to July 2014 by number

of projects and CAPEX. Financial services received the largest share of FDI from Nigeria in terms of projects

accounting for 63%, followed by building and construction materials, and business services accounting for 17%

and 5% respectively.

Building and construction materials also received the highest percentage of total CAPEX, accounting for 62%,

followed by financial services and communications accounting for 19% and 8% respectively.


The United Bank for Africa was the largest company for outward FDI from Nigeria in terms of projects, with 23

investment projects. Eight of the top 10 investing companies were in the financial services sector. The total

projects and capex of the top 10 companies makes up 60% of total projects and 72% of total capex invested from

Nigeria.

TOP 10 COMPANIES FOR FDI FROM NIGERIA, 2003 – JULY 2014

RANK COMPANY SECTOR PROJECTS CAPEX (ZARm)

1 United Bank for Africa (UBA) Financial Services 23 2 082.0

2 Dangote Cement Building and construction 15 21 046.0

3 Intercontinental Bank Financial Services 10 1 424.0

4 Access Bank Financial Services 6 840.4

5 Dangote Group Building and construction 6 10 664.1

6 Energy Bank Ghana Financial Services 6 672.4

7 Guaranty Trust Bank Financial Services 5 424.3

8 Continental Reinsurance Financial Services 4 295.2

9 Guaranty Trust Bank (Sierra Leone) Financial Services 4 300.6

10 Access Bank Rwanda Financial Services 4 300.6

TOTAL OF TOP 10 COMPANIES 83 38 049.6


Building & Construction

Materials62%

Financial Services

19%

Communications8%

Metals4%

Warehousing & Storage…

Business Machines & Equipment

1%

Transportation1%

Alternative/Renewable energy

1%

Business Services

1%

FDI FROM NIGERIA BY SECTOR (CAPEX), 2003-JULY 2014

Financial Services

63%Building & Construction Materials

17%

Business Services

5%

Communications4%

Consumer Products

2%

Transportation2%

Machinery & Equipment2%

Metals1% Software & IT services

1%

other sectors3%

FDI FROM NIGERIA BY SECTOR (PROJECTS), 2003-JULY 2014

21

4.3 FDI Relations between South Africa, the Western Cape and Nigeria

4.3.1 Inward FDI into South Africa

Between January 2003 and July 2014 a total of 5 FDI projects were recorded from Nigeria into South Africa. These

projects represent a total capital investment of ZAR1.26bn which is an average investment of ZAR251.45m per

project. During the period, a total of 349 jobs were created. The largest investment into South Africa in terms of

CAPEX was by the Dangote Group in 2008 worth ZAR1.1bn.

Nigeria did not invest into any projects in the Western Cape.

NIGERIA’S FDI INTO SOUTH AFRICA, 2003-JULY 2014

PROJECT

DATE

INVESTING

COMPANY

DESTINATION

STATE

INDUSTRY

SECTOR SUB-SECTOR

INDUSTRY

ACTIVITY

CAPEX

(ZARm) JOBS

Jan 2013 iROKO Partners

Gauteng Software & IT services

Internet publishing & broadcasting & web search

Sales, Marketing & Support

8.19947 5

Apr 2010 Peacock Travels and Tours

Gauteng Hotels & Tourism

Travel arrangement & reservation services


5.46631 9

Apr 2009 Intercontinental Bank

Gauteng Financial Services

Retail banking Business Services 75.1618 19

Oct 2008 Dangote Cement

North West Province

Building & Construction Materials

Cement & concrete products

Manufacturing 1091.9 297

Feb 2004 FBN Holdings (First Bank of Nigeria)

Gauteng Financial Services

Retail banking Business Services 75.1618 19


Many of the motives cited for these investments include domestic market growth potential, regulations or business

climate and infrastructure and logistics. According to the Financial Times (2014) motives cited from the investors

include the following:

Genevieve Dumorne, who heads up the iROKO Partners Johannesburg office says: “We’ve come to

South Africa to work closely with the continent’s leading media agencies, advertisers and content

providers. The entertainment and tech scene in South Africa is mature, dynamic and exciting – we’ll be

looking to see not only what we can learn from it, but also what we can contribute to it with iROKOtv and

iROKING – two of the continent’s leading online entertainment distribution platforms.”

"This location is intentional because of its easy accessibility. It is just about 15 minutes’ drive from Pretoria

and about 40 minutes to Johannesburg; it is about 10 to 25 minutes’ drive from Midrand and Sandton

areas respectively, all within Gauteng Province," the executive chairman of Peacock Travel and Tours ,

Chief Segun Phillips, said.

"We have established First Bank Nigeria (PTY) Ltd South Africa (Rep. Office) as part of our strategy to

register our presence in other world financial centres."

22

4.3.2 Outward FDI from South Africa

Between January 2003 and July 2014 a total of 47 FDI projects were recorded from South Africa into Nigeria.

These projects represent a total capital investment of ZAR28.72bn which is an average investment of ZAR610.86m

per project. During the period, a total of 7,200 jobs were created. Nigeria received the most investment from South

African in terms of capex in 2010, with ZAR15.8bn and in 2012 and 2013 in terms of projects with 9 projects each.

Source: FDI intelligence, 2014

The graphs below show a sector breakdown of the South African investment into Nigeria. In the period analysed,

South Africa invested in the most projects in financial services (21%), food and tobacco (15%), and business

services (13%). Five of the ten investments into financial services in Nigeria were carried out by Standard Bank. In

terms of capex, the communications (52%), real estate (20%) and hotel and tourism (13%) sectors attracted the

highest investments.


2003 2004 2005 2006 2008 2009 2010 2011 2012 2013 2014

Capex 5 985 887 361 138 1 363 75 15 819 967 571 2 463 92

Projects 2 1 2 2 5 1 7 7 9 9 2

0

2 000

4 000

6 000

8 000

10 000

12 000

14 000

16 000

18 000

1

2

3

4

5

6

7

8

9

10

Valu

e (

ZA

Rm

)P

roje

cts

SOUTH AFRICAN FDI INTO NIGERIA, 2003-JULY 2014

Financial Services

21%

Food & Tobacco

15%

Business Services

13%

Textiles11%

Hotels & Tourism

9%

Software & IT services

6%

Communications6%

Consumer Products

6%

Non-Automotive Transport..

4%Other

sectors 9%

FDI FROM SOUTH AFRICA INTO NIGERIA BY SECTOR (PROJECTS), 2003-JULY 2014

Communications52%

Real Estate20%

Hotels & Tourism

13%

Food & Tobacco

3%

Financial Services

3%

Consumer Products

3%

Non-Automotive Transport OEM

2%

Textiles2%

Business Services1%

Other Sectors

1%

FDI FROM SOUTH AFRICA INTO NIGERIA BY SECTOR (CAPEX), 2003-JULY 2014

23

The table below provides a list of the top investing companies from South Africa to Nigeria. The top companies in

this period were Shoprite and MTN Nigeria. Two of the top 10 companies by project were in the financial services

sector. The projects and capex of the top 10 companies makes up 47% of total projects and 66% of total capex

invested from South Africa into Nigeria.

Nigeria is spouted to have one of the world’s fastest growing middle class segments. Due to this, food and beverage

retailers and telecoms giants have noted a large opportunity due to the population’s growing disposable incomes.

Shoprite sees scope for up to 800 shops in Nigeria, CEO Whitey Basson says "Nigeria can handle that many stores

if you look at the size of the cities and the penetration of supermarkets and it can happen quickly, but that’s not

dependent on Shoprite but on (the availability of) sites."

Telecoms giant MTN has been rolling out investments in Nigeria in line with its ever growing expansion strategy.

More recently in 2014, MTN has agreed to form a joint venture with specialist tower company IHS that will own and

operate MTN’s 9,151 transmitter towers in Nigeria.

Phoenix distribution has invested in the IT and software sector as technology and information security products are

forecast to be in high demand due to Nigeria's high cybercrime rate. Other software and IT companies are expected

to follow as e-commerce rises in the country.

TOP 10 COMPANIES FROM SOUTH AFRICA INVESTING IN NIGERIA, 2003- JULY 2014

RANK COMPANY SECTOR DESTINATION

PROVINCE PROJECTS CAPEX (ZARm)

1 Shoprite Food and beverages Western Cape 7 810.4

2 MTN Nigeria Telecoms Gauteng 2 15 016.0

3 Stanbic IBTC Bank Financial Services Gauteng 2 150.3

4 Southern African Shipyards (Pty) Ltd Transport Kwa-Zulu Natal 2 621.1

5 Mr Price Group Textiles Kwa-Zulu Natal 2 174.9

6 Stanbic IBTC Pension Managers Financial Services Gauteng 2 150.3

7 Protea Hospitality Hotel and Tourism Gauteng 2 1 773.8

8 konga.com Textiles Western Cape 1 198.8

9 Wunderbrand Business Services Gauteng 1 47.8

10 Phoenix Distribution Software & IT Gauteng 1 43.7

TOTAL 22 18 987.2


24

4.3.1 Outward investment from the Western Cape

The table below shows the investments by Western Cape companies into Nigeria from 2003 to July 2014. A total

of 14 FDI projects were recorded in the period. These projects represent a total capital investment of ZAR1.72bn

which is an average investment of ZAR122.99m per project. During the period, a total of 1,958 jobs were created.

The largest investment was made by Woolworths in 2011, where they invested ZAR248m in a retail store. The

motive for investment was domestic market growth. The head of Woolworths business into Africa, John Fraser

said, "We are confident about our investment in Nigeria and we are very pleased with the growth prospects of the

Nigerian market. The country has a large population with significant and growing middle-and-upper income groups.

We have found the right partner in Chellarams to grow the Woolworths brand in Nigeria.”

The Foschini Group also invested around ZAR248m in a retail store in Nigeria as part of its plans to open 57 outlets

in the rest of Africa by 2014.

Konga.com invested ZAR198.84m opening a new 11,150m2 logistics facility in Lagos, Nigeria. The facility meets

the current warehousing needs of the company in Nigeria, and can be expanded in the future if needed.

WESTERN CAPE’S FDI TO NIGERIA, 2003-JULY 2014

PROJECT

DATE

INVESTING

COMPANY

DESTINATION

STATE

INDUSTRY

SECTOR SUB-SECTOR INDUSTRY ACTIVITY

CAPEX

(ZARm) JOBS

Oct 2013 konga.com Lagos Textiles Clothing & clothing accessories

Logistics, Distribution & Transportation

198.84 151

Aug 2013 Shoprite Not Specified Food & Tobacco

Food & Beverage Stores (Food & Tobacco)

Retail 113.43 177

Jun 2013 Shoprite Ibadan Food & Tobacco


Retail 113.43 177

Aug 2012 Shoprite Lagos Food & Tobacco


Logistics, Distribution & Transportation

135.98 144

Jun 2012 Shoprite Abuja Food & Tobacco


Retail 107.28 200

May 2012 Learning Curve

Lagos Software & IT services

Software publishers, except video games


52.61 15

Nov 2011 The Foschini Group

Not Specified Consumer Products

General merchandise stores

Retail 248.03 194

Sep 2011 Woolworths (South Africa)

Not Specified Consumer Products

Miscellaneous store retailers

Retail 248.03 194

Aug 2011 Pepkor Not Specified Textiles Clothing & clothing accessories

Retail 95.66 122

Apr 2011 Ad Dynamo Lagos Business Services

Advertising, PR, & related


25.97 26

Aug 2010 Shoprite Not Specified Food & Tobacco


Retail 113.43 177

Sep 2008 Sanlam Group

Not Specified Financial Services

Insurance Sales, Marketing & Support

44.41 27

Sep 2008 Shoprite Not Specified Food & Tobacco


Retail 113.43 177

Dec 2005 Shoprite Lagos Food & Tobacco


Retail 113.43 177


Note: th capex values are sometimes estimated based on similar projects within the sector.

25

5 Tourism

The Nigerian government has recently marketed travel and tourism as a strategic sector in the national economy.

Through the Nigeria Tourism Development Corporation (NTDC), it has recently created a new brand, “Fascinating

Nigeria,” with the aim of revitalising the struggling industry as well as developing its value chain. This move aims

to make travel and tourism a major contributor to the nation’s GDP and to boost non-oil revenues as Nigeria

continues on its mission to diversify its economy out from its current reliance on oil exports (Euromonitor, 2014).

The NTDC has also joined the International Coalition of Tourism Partners (ICTP), forming alliances and

participating in international tourism trade fairs such as WTM London and ITB Berlin.

5.1 Nigeria’s Trends and Travel Patterns

5.1.1 Outbound Tourism

Outbound travel from Nigeria is expected to reach 949,380 departures in 2018, up from 634,470 in 2013. The

forecast period shows a positive growth trend of outbound tourists, with growth between 6.8% and 10.7%. The

major factor contributing to this forecast is the growing domestic economy.

Source: Business Monitor International, 2014

The table below illustrates the top ten markets by departures from Nigeria from 2011 to 2018f. The top three

markets are the United Kingdom, the United States and South Africa. It is surprising that more outbound travel is

not done in other African countries, other than South Africa and Egypt.

TOP TEN MARKETS BY DEPARTURES FROM NIGERIA, 2011-2018F (‘000)

COUNTRY 2011 2012 2013 2014f 2015f 2016f 2017f 2018f

United Kingdom 142.1 154.0 179.9 195.7 207.2 221.6 238.7 256.8

United States 104.5 114.5 128.0 137.4 145.5 154.5 164.1 174.7

South Africa 64.4 73.3 89.4 111.0 121.1 130.6 146.8 164.4

Saudi Arabia 66.6 73.0 81.6 87.6 92.7 98.5 104.6 111.4

Egypt 33.3 42.0 45.7 49.9 54.9 61.5 70.0 76.8

India 33.5 36.8 38.8 41.7 43.5 45.8 49.0 52.2

Israel 45.0 21.3 23.8 25.6 27.1 28.7 30.5 32.4

Turkey 14.6 19.9 19.0 21.4 23.0 25.3 28.7 32.7

Brazil 3.3 3.7 4.9 6.3 7.4 9.0 10.1 11.2

Ukraine 3.5 3.3 3.7 3.9 4.0 4.1 4.3 4.4

Source: Business Monitor International, 2014

Unfortunately inbound tourism patterns are unobtainable through Business Monitor at this stage.

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Departures, '000 412,32 394,88 408,09 443,36 481,82 530,38 558,19 634,47 702,35 750,35 805,90 875,96 949,38

Growth (%) 7,4 -4,2 3,3 8,6 8,7 10,1 5,2 13,7 10,7 6,8 7,4 8,7 8,4

-6

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TOTAL NUMBER OF DEPARTURES FROM NIGERIA, 2006-2018

26

5.2 Nigeria’s Tourist Arrivals to South Africa

The graph below shows the total tourist departures from Nigeria into South Africa from 2009 to 2013. Growth has

been continuously positive from 2009 to 2013, ranging between 9.9% and 37.5%. This growth is not surprising as

the 2011 census figures show there are 24,000 Nigerian nationals who live in South Africa. According to SAT the

purpose of visiting South Africa were given in the following order:

Visiting friends and relatives 26.7%;

Business tourism 22.4%;

Business travel 20.0%; and

Holiday 19.4%.

Source: SATourism

5.3 Nigeria’s Tourist Arrivals to the Western Cape

The graph below shows the total tourist departures from Nigeria into the Western Cape from 2009 to 2013. Growth

has fluctuated from 2009 to 2013, ranging between -17.5% and 58.2%. There was a large spike in arrivals in 2011,

however the highest number of arrivals (13,450 arrivals) and the highest growth (58.2%) was seen in 2013.

Source: SATourism

For more information on this publication and other Wesgro publications please contact [email protected] or for more

publications visit the Wesgro publications portal on our website at http://wesgro.co.za/publications

2009 2010 2011 2012 2013

Nigeria Arrivals 42 651 46 853 64 402 73 282 84 589

Growth (%) 9,9 37,5 13,8 15,4

0

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NIGERIA'S ARRIVALS TO SOUTH AFRICA, 2009-2013

2009 2010 2011 2012 2013

Nigeria 6 654 6 653 10 304 8 501 13 450

Growth (%) 0,0 54,9 -17,5 58,2

-30

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NIGERIA'S ARRIVALS TO THE WESTERN CAPE, 2009-2013

mailto:[email protected]

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