FOREIGN DEBT: 1977/2001

(*) From 1997, these data seem to have only partially taken into account the accumulation of the arrears; the post 87 figures result from several reschedulings.

NIGERIA’S PLACE IN SUB-SAHARAN AFRICA

Nigeria is the most populated country in Africa, with more than 140 million inhabitants. One out of every five Africans is a Nigerian. Consequently this country offers abundant and cheap labour and is the continent’s largest domestic market. Moreover, it has an abundant variety of natural resources. In West Africa this vast country is regarded as the economic and political engine of the sub-region.

This economic and political power must however be put into perspective. Indeed, the infrastructures are inadequate and poorly maintained: the roads are bad and it is almost impossible to have more than four uninterrupted hours of electricity.Nigeria’s environment is on the decline, it is facing serious problems of labour regulation, personal relationships having a great bearing on business. The Naira, which is the national currency, is declining in value and will most probably have to be revalued.

More than 100 French companies are present in the Nigerian market and they are certainly not thinking of pulling out. The current political situation bestows a new kind of stability on the business environment. Many trusted banks, having an international financial base, monitor the financial health of companies as well as secured payments.

That’s  Nigeria in brief. It’s much like

Wide-scoped and highly profitable business opportunities, all in an environment that is not always easy and requiring a certain measure of adaptation.

With the poorness of its infrastructures and the strong bearing that personal relationship exist in the establishment of the businesses. The virtual absence of state regulation of the economy, apart from the key sectors like oil, telecommunications and electricity, strongly encouraged the reinforcement of the irregular market. Today, this market is the only source of income of a majority of the populace. The apparent irregularity of African markets, is only a façade however, as they are highly systematized and structured according to a hierarchy. Some foreign communities, such as the Indians or Lebanese, have become part and parcel of this system making them the richest, most widely spread and most influential diasporas of the sub-Saharan continent.

with neighbouring countries (Benin on the West, Niger and  Chad on the North and Cameroun on the East) is almost total, thereby limiting the scope of national control measures.

Another characteristic of the Nigerian market is its external orientation. Towing the line of most African countries,  Nigeria produces only little value added, its economy depends as much as 98% on its crude oil and gas exports. The other economic players are turning mainly towards importation, creating value added through carriage. All commodities are profitable, if the opportunity arises. It is thus possible for a Nigerian SME to trade in cotton buds, fruit juices, car engines, coffee cups and staplers all at the same time, according to what is available and on demand in the national market. This near- absence of specialization by importing SMEs does not affect the quality of their services and products, it only reflects the need to be involved in several lines at the same time in order to adapt to the unexpected movements of the market.

Exports

In 2001, out of a total of 24 billion US dollars, the export of hydrocarbons accounted for 98% of Nigeria’s sales. The imports in the sector have also increased due to a favorable economic situation. Nigeria is the leading producer of crude oil on the African continent, sixth in the ranks of OPEC and twelfth in the world. It profits from its export since 1999 of LNG (Liquefied Natural Gas), the production of which is making good progress in view of the fact that the fleet of methane tankers available to NLNG (which is 15% owned by Elf) cannot accommodate the extractable quantities. Two more methane tankers were consequently ordered.

Other products exported by Nigeria amount to only 4% of the total sales in 2001. We must of course take into account the fact that much of the cross-border trade is carried out in form of smuggling and can therefore not go into record. Products exported by Nigeria are from the primary sector: gum arabic, cashew nut, sesame seeds, cocoa, shellfish, various kinds of wood, natural rubber, cotton, skin and leather.

In 2000, the  Nigeria’s imports were divided as follows: 39.2% from the European Union.
Imports estimated at 12,3 billion euros, were expected to increase by 26% (source: Economic Mission,Lagos) in 2001. The leading sectors include capital goods and transport (2.5 Billion USD, source: Economic Mission,Lagos).  Nigeria also imported refined petroleum products worth 447 Million USD in 2000. In 2000, the purchase of foodstuffs was expected to record a 10% increase over 1999, with wheat remaining first place, followed by sugar and rice.

China is taking an increasingly significant place in Nigerian imports. Representing 9.4% of the suppliers, it now occupies the third place, just before of Germany. Being largely specialized in cheap, poor quality and even counterfeit products, China is riding high in Nigeria.