Expats in Nigeria often work in a different business environment to what they’re used to back home, even if they have a job with a foreign company or they’re from another country in Africa. Nigerian business life has its eccentricities and it’s important to understand it from both a micro and a macro perspective to successfully work in Nigeria.
Nigeria’s economy has been undergoing a lot of changes in the last 25 years. After a rebasing and recalculation of the country’s GDP in 2014, as well as decreasing oil output for the last 3 years, it appears the petrochemical industry makes up a smaller part of the economy (14%) than previously thought (35%). The services sector is responsible for a much more impressive 52% of the nation’s GDP, up from 29% before the rebasing. Nevertheless, the oil and gas sector still accounts for 95% of Nigeria’s exports, and yet only 10% of the labor force.
The mining industry in Nigeria is overshadowed by the nation’s fixation on petrol, but it should offer excellent opportunities in the future for expats working in Nigeria. The country has reserves of iron ore, gold, tungsten, and uranium, among others – all waiting to be exploited.
The nation’s population is growing explosively: One out of every six Africans is Nigerian. However, Nigeria has had some problems keeping all these people well fed. Where 20 years ago, 70% of the labor force was engaged in agriculture, that figure has dropped to around 30%. Further, much of the produce cultivated is exported and not meant for domestic consumption, such as cocoa or natural rubber.
Many of the people who work in Nigeria’s fields do so to feed their families with their crops. The agricultural infrastructure was neglected more and more as getting a job in Nigeria’s petrochemical industry proved much more profitable. This, in turn, stunted both the growth and efficiency of the agricultural sector. As such, some food must be imported and is unaffordable to the average Nigerian.
Corruption is a very widespread problem throughout the nation, drastically reducing the quality of life for the common populace and stunting economic growth. For example, many of the people working in Nigeria’s blooming oil industry rarely reap the benefits of their labor: Over 80% of the revenues flow directly to the government, while 70% of the population live below the poverty line. This has repeatedly been the cause for violent riots throughout the nation, including in Lagos and Abuja, particularly when fuel subsidies were cut in 2012, almost doubling the price at the pump.
In an effort to combat corruption, poverty, and violence, decentralization has been a constant theme in Nigeria’s recent political history. Whether the country, with now 36 states and 774 Local Government Areas, has increased or reduced poverty and corruption with its decentralization strategy is difficult to determine.
The lack of job openings and widespread nepotism have driven many people to start working in Nigeria’s informal sector. Some estimate that about 70% of industrial employment is informal and thus poorly regulated.
Some Nigerian people have resorted to even more radical measures and joined the criminal organizations that plague the country. These can be particularly dangerous to expats living and working in Nigeria. The area of the Niger Delta in particular has long been the most risky place to work in Nigeria, more so than the cities like Lagos and Abuja.
The kidnapping of foreigners is used as a common method of extortion. If your job description involves working in Nigeria’s oil-producing sector, please make sure your employer provides the necessary safety precautions, such as security guards and employee compounds. Oil-related work in Nigeria is very lucrative, but it can potentially be perilous. Please stay safe and read the section on safety in our Living in Nigeria Guide before booking a plane ticket.
Like many emerging economies, Nigeria has set up a number of Free Trade Zones (FTZ). Their objective is to make doing business in Nigeria more attractive to foreign investors by lowering bureaucratic requirements. At the moment, there are 25 operational FTZs, and many others are under construction.
FTZs make it possible for companies to set up shop and start working in Nigeria without having to worry about bureaucratic red-tape, such as tariffs and import quotas. Having a stake in Nigeria’s oil industry has proven very lucrative for investors; however, safety problems in the Niger Delta have often overshadowed the advantages.
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