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All to go for in Nigeria despite the challenges

The creative energy in Nigeria was palpable during my recent trip to our office in Lagos.

With a population close to 220 million and the largest economy in Africa by some margin, the country will emerge as a global economic powerhouse over the coming decades. On current demographic trends, its population will nearly double in the next 25 years to 400 million, surpassing the US as the world’s third most populous country and over-take China by 2100.

First impressions can be misleading. Bizarrely, a shortage of newly designed naira banknotes means Nigerians have been left without cash to pay for vital items. Motorists wait in line for hours for petrol in one of the world’s major oil producers, because of a lack of operational refineries, with actual production too well below Opec’s quota although newer high quality operators such as First E&P will no doubt help to address this over time. Poor transport and power infrastructure have held back growth for decades and security is in an abysmal state. These are examples of the challenges that dog the country – contributing to surging inflation at 22 per cent, widespread unemployment and an acute shortage of foreign currency. Imminent Presidential elections on 25th February are a focus for debate and frustration around all of these issues.

Then you meet people in the markets, in offices, in restaurants and across its extraordinary creative industries and art scene. The very challenges posed by absent structural infrastructure and economic dysfunction drive innovation and creativity. 

Africa’s first Homecoming festival was in Lagos on 2017 and returns this April.  This four day cultural exchange brings African creatives back to the Continent. Two of my colleagues in our Lagos office are examples of this.  Both Buchi and Nelly decided to swap London for Lagos as the best place to fulfil their dreams. With some excellent schools and Universities across the country, but with also many of its business and cultural leaders educated in the west who have chosen to return to help ensure a better future for their country. Business leaders are up there with the very best anywhere.

The telecom sector, including our client LSE FTSE 100 Airtel Africa, is vibrant and robust – providing the backbone for innovation through infrastructure players like IHS Towers. World-class fintech businesses like our clients Flutterwave and Airtel Money, alongside PayStack and Interswitch, are helping individuals and businesses embrace the cashless economy to drive, among other things, financial inclusion and remote learning. Moove is democratizing access to vehicle ownership for over 2 million African entrepreneurs who need access to a vehicle or vehicle financing. And these highly innovative businesses that are solving Africa’s problems are attracting billions of dollars of international capital, from the public markets in London and New York, to international private equity firms like Helios Investment Partners and local players such as CardinalStone. It is no surprise that Nigeria is the leading destination for African tech start-up funding.

Since 2016, ART X Lagos has firmly established itself as a must-attend event for international collectors, now hosting galleries and artists from over 40 countries: a cornerstone of the African art sector.  State support for the arts disappeared in the 1980s and the movement today is purely privately orientated, giving it a licence for irreverence and dynamism.  Every single business meeting I attended contained serious collectors, eager to recommend galleries for me to visit.  And I did – and bought (highly recommend HourGlass!)

Despite all the poverty and challenges, there is no question that this country is developing rapidly.  Total trade volume between post Brexit Britain and Nigeria stood at a massive £5.5 billion ($6.8 billion) in the second quarter of 2022. The African Continental Free Trade Area (AfCFTA) agreement is also powering its trading relationships across the Continent, helped by organisations such as our client Afreximbank. This is a highly entrepreneurial and dynamic society, where the average age is only 18. Anyone looking at emerging markets has to have Nigeria centre stage, given the scale and breadth of the opportunity it presents to invest in and trade with. As the Financial Times recently succinctly put it, “Africa’s ‘sleeping giant’ has a swagger and entrepreneurial drive reminiscent of the US.”

Andrew Hayes, Managing Partner

Image credit – ART X Lagos