Business Environment in Nigeria
Nigeria is one of the countries in the West African region that attracts investors due to its growing population. The country’s land mass amount to 923,000km2 and boarders the following countries: Cameroon, Chad, Niger and Bukinafaso (CIA, 2015). The total population is at 182 billion dispersed in major cities (Lagos 13million, Kano 3.5million, Ibadan 3.2million, Abuja 2.4 million and Portharcourt 2.3 million). Nigeria is characterized by different cultural activities that include: music, film and theatre, festivals and carnivals, songs and dances, cultural dressing and traditional activities (African, 2014). The major languages used involve Hausa, Ibo, Yoruba and English.
Life expectancy is at 53 years with 814 deaths experienced each year. Child labor is at 29% for children between 5-14 years. The country’s largest population forms the largest market for goods and services in Africa. This is in line with the growing youthful population that has high affinity for technology and its devices thus leading to westernization. Oil production forms the main income earning activity for the country (GlobalEDGE, 2015). Gross domestic product amounts to $459 billion with imports at 2% refined petroleum, 1% metal and 1.4% machinery. Export stand at 18% for petroleum oil and gas. 70% of the population is employed in agricultural sector while 17.4% underemployed and 9.9% unemployment (Emeka, 2015).
Economic Culture and Condition
The vibrant classical music genre, intelligentsia and elite societies have made significance contribution in the world. Some of the renowned contributors include Wole Soyinka, Chinua Achebe, Fela Sowand and Ayo Bankole in the music industry (National Bureau of Statistics, 2015). Music forms part and parcel of the population culture. Three religions practiced include Christianity, Islam and traditional or indigenous religion. Traditional food includes yams, pumpkins and cassavas (Sadoh, 2011). In addition, culture is also characterized by contemporary music such as hip-hop, afro beat, Fuji music and afro funk. This goes hand in hand with traditional dressing code consisting of hats and gowns that depicts wealth, religion and social status (Aigbokhaevbolo, 2015b). Socially, Muslims expects their women to look after the family while Christians practice gender equality in almost all areas. Greetings are important aspects of the community with Muslims prohibiting their women making close contact with men either through hugging, kissing or shaking hands (Tan, 2014).
Economically, financial institutions oversee the utilization of resources in Nigerian currency (Naira). The strong security market named Nigeria stock exchange listed over 280 companies (Culture Crossings, n.d.). This allows foreigners and locals to own local companies while foreign banks need to register with Nigerian investment and promotion commission in order to operate locally. Good infrastructural development allows business to operate favorably. This consists of railway (4,000km) and roads (30,000km) and electricity (Chete, Adeoti, Adeyinka, & Ogundele, 2014). However, there is need for improvement including the improvement in the telecommunication industry (Kwintissential, n,d,).
Nigeria is a strong supporter of economic integration. It is a member of economic communities of West African states (ECOWAS), oil producing economic countries (OPEC) and African union among many other economic and political organization (Hogan Lovells, 2013). ECOWAS concentrates on promoting trade and removing economic barriers that inhibit trade (Ijirshar, 2014). The country benefit from harmonized custom duties and levies charged among trading partners. OPEC controls oil prices in the world and regional market hence benefiting the country from optimal prices (Brooker, 2014).
The best way to do business in the country for multinational corporation (MNC) is to enter into franchise business (Brooker, 2014). This is because government has provided security and infrastructure needed to carry out businesses. Import and export duties changes from time to time based on the oil prices in the international market. Green field investments on the other hand is deemed to favor multinational corporation through accessibility to loans from local banks while at the same time offering jobs to the country’s population (Iarossi, Mousley, & Radwan, 2009). Therefore, the most favorable means of investing is franchising.
In conclusion, Multinational Corporation will be interested in security, market availability, credit facility accessibility and favorable environment. To be specific, security situation in the country has not been stable and would discourage investment. Credit facilities are prevalent in the Nigerian financial market while businesses have good access to market in the competitive environment. In consideration to these issues, I would recommend Multinational Corporation to enter the market.
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