When we told friends and associates of our invitation to visit Nigeria, they all said the same thing (excepting our esteemed editor, who worried about something else which was, at least, to be found in the subject country): “Try not to catch ebola.” Which, as you will see, summed up beautifully a misconception in the United States which requires only a few facts to set right. Ebola’s epicenter is at least a thousand miles away from Nigeria. Location-wise, worrying about catching ebola in Nigeria is more like worrying whether someone in Palm Beach might get hit by falling debris from the 9/11 tragedy in New York.
Geography aside, we also knew that Nigeria had successfully quarantined and followed up on the first case that showed up there. And we saw the country’s massive ongoing follow up. Our temperature was tested both before AND after each flight.
That’s not to say that there aren’t one or two points of concern about doing business in Nigeria. A cadre of internet-literate Nigerians have done yeoman work in convincing the American population that every email from Nigeria is a scam invitation. They have promoted their particular brand much more effectively than Mary Kay or Amway have ever done for a much more benign product. But the result of this entrepreneurial instinct gone wrong is that most Americans know a Nigeria which isn’t quite the reality, a fact mourned by the legitimate businesspeople in Nigeria.
And there’s a bit of corruption in Nigeria on a broader level. We found it on the micro level when we were entering the country. Our host had arranged for our visa successfully, but had omitted to tell us about the yellow inoculation card which was also required to enter the country. Its absence landed us at the desk of the woman charged with monitoring this particular item. We learned that their choices were simple, really: send us back on the next flight, or stick us in quarantine for ten days. Neither solution was opportune. We meditated on the conundrum. Finally, the official noted that were we to give her something, perhaps she could assist in resolving the impasse. We did, she resolved the matter, and off we went.
We saw evidence of a broader problem affecting the Nigerian economy in the highway system, where major arteries dissolved into miles of potholes with frequency, all because various state governments had such embedded corruption that the money destined for highway projects never made it to the payment portal for work and materials. Yet, in Abuja, the nation’s capital, the highway system was well done; so Nigeria had proven its capabilities when the project had a high enough profile.
We were visiting Nigeria for business development, specifically, to understand the opportunities for American businesses interested in expanding their export profile. The anecdotal points we heard added up into a clear picture.
As Nigerians proudly noted, Nigeria is now the largest economy in Africa, with oil revenues contributing greatly. There is a substantial amount of highly concentrated wealth in Nigeria. As in most developing countries, a relative few control most of the wealth. Nigeria has this in common with the United States. We’re still trying to decide which country should be proudest of the similarity.
Nigeria has to import almost everything. There is little manufacturing base to speak of; the country exports oil and some agricultural products and fruits and vegetables grown locally, but otherwise, they rely on imports. We learned that the Chinese have a large presence in Nigeria and Africa. The Africans have become aware that the quality of many Chinese products is poor. So many Nigerian businessmen are alert to the opportunity to buy American or European.
We sat with several bankers to discuss their ability to open letters of credit to pay for goods, this being a well-established means to settle so many international transactions. This wasn’t a problem. Many of the top banks have long established credit lines with western banks to increase their creditworthiness in world markets.
When we spoke with Nigerian businessmen, we asked if they wanted to import US products, The answer was an enthusiastic yes, both manufactured and food products. They thought that American sourced materials were top quality. Then we asked what happened when they made overtures to American suppliers to import goods from America (Our apologies to our European and UK readers; we didn’t think to include them in the question). The consistent answer we heard was: many American businessmen are generally not comfortable selling into Nigeria. Why? The Nigerian businessmen had the capital to arrange for the appropriate financial bank instruments to secure the transaction, and yet…….. American suppliers were mostly non-responsive.
The US economy is substantial all by itself. Only 14% of GDP actually comes from exports; the rest is the result of a self-sufficient economy. As a result, the US exports substantially less than most countries as a % of GDP. As a country, the United States has maintained a blithe ignorance about the rest of the world, and its geography has not helped. Most of the world is far away, so that many of the good people of the US have no reason to engage with other parts of the world, a condition which obtains even today. Under such circumstances, it’s understandable that there can be a natural suspicion of the unknown, and a lack of motivation to understand the dynamics in other parts of the world. Today with internet and TV news, they can SEE more of the world, but they may not have the impulse to interact with it. Who knows? Maybe in a semi-stagnant economy, the pain of learning some new skills and understanding the habits of new customers can be offset by the pleasure of new revenue sources and earnings…..once American businesses learn how to secure their financial interests in settling export deals.
None of this stuff is rocket science. It requires little more than skills in letters of credit, or other financial instruments used in world trade, and those skills can be outsourced. The world outside the United States is populated largely by people with aspirations similar to those in the developed world. The point being, once vc and private equity-type investments are in a position to sell overseas, there may be markets that are much more attainable and secure than is evident to the casual eye.
Another indicator of potential in Nigeria was reported on Quartz. A few people started doing the math and noticed that Nigeria’s population and potential made it a logical spot for venture capital-type developments. We plan to visit a local Nigerian vc group on our next trip and perhaps begin digging into capital raising structures and financial markets in that country as well.