British companies are looking to tap into the growth of Nigeria, its former colony, as the country which has an abundance of natural resources continues the rapid expansion that has seen it become Africa’s largest economy.

Seven of the world’s fastest-growing economies are on the African continent, thus making it an area of interest for foreign investors.

“There is huge capacity for growth in Africa and demand for services from UK companies who want to invest in Africa or are already there and want to expand,” Ian Powell, UK chairman and senior partner, PwC, said recently.

While British companies have been present in Nigeria for decades, there have been more recent gains made by companies from China, the USA, and South Africa.

Foreign direct investments in Nigeria reached $5.6 billion in 2013, according to the UN Conference on Trade and Development.

Nigeria is projected to be the leading economy in sub-Saharan Africa within the next decade, and expected to achieve 7 percent or more growth rate this year, according to the International Monetary Fund (IMF).

The UK should expand by 2.9 percent this year, the IMF said in an April update.

British companies are looking to take advantage of Nigeria’s rapidly expanding growth by ramping up investments and also building up closer links within the continent.

The Nigeria-British Chamber of Commerce says it expects bilateral trade between both nations to exceed its targets this year.

“By the end of 2012, the figure already stood at £7.2 billion and there is no doubt that the target of £8 billion would have been exceeded well before the end of this target year of 2014,” said Adeyemi Adefulu, president, Nigerian-British Chamber of Commerce.

“It is my considered opinion that with the right policies and incentives, the trade between our two countries could hit £20 billion within the next five years,” Adefulu said.

Nigeria has been attracting investor interest recently, as a result of positive indices of growth and demographics.

The National Bureau of Statistics (NBS) recently announced a rebasing of the country’s GDP figures which put the value for 2013 at $490 billion, as against $384 billion for South Africa for the same period.

The UK is among the largest investors in its one-time colony, with assets totalling more than £10 billion.

British companies already present in Nigeria include Shell in the oil and gas sector, British-American Tobacco, British Airways, Cadbury, GlaxoSmithKline, Guinness and Unilever.

The presence of first- or second-generation Nigerian employees who may want to relocate or take a secondment to the continent is also making it easier for UK companies to push their expansion plans.

Analysts say despite being perceived as a high-risk country at the moment, Nigeria, with its abundant human and natural resources, sound macroeconomic climate, vast domestic market and excellent trade links with the rest of West Africa, offers one of the highest rates of investment returns in the emerging markets.


http://businessdayonline.com/2014/07/british-firms-look-to-discover-boom-in-former-colony-nigeria