Industries in Nigeria: Quick Analysis and Overview

industries in Nigeria

As a manager at a multinational firm looking to enter the Nigerian market, you are probably looking for credible information on industries in Nigeria in an attempt to better understand the country’s market. It is important to understand details of your specific industry in Nigeria, to know where the opportunities in the market reside, and whether your company can supply a solution to a local need.


Nigeria is the largest economy in Africa. The main factor that makes Nigeria an attractive investment destination is its population. Nigeria is the most populous country in Africa and with 186 million citizens the country is usually a destination market for growing multinationals looking to increase sales and grow their global presence. However, the population size looked at in isolation can be rather deceptive because not all Nigerians have the power to purchase goods and services supplied by growing international firms. Besides the general challenges that you will have to overcome when doing business in Nigeria, there are also some industry-specific challenges to look out for.


Highlighted below is information on different industries in Nigeria that could prove to be useful as you continue building up a profile for your business in the market.

Skip to the industry that you are interested in by clicking below:


Industrial and Consumer Goods


Consumer Goods

As Nigeria’s burgeoning middle class continues to grow, the country will also see significant growth in its retail sector. Currently, retail and wholesale sales make up 16% of Nigeria’s GDP, making these sales the third largest contributors, even though most of these sales are conducted through informal markets, such as open markets, street vendors, and kiosks.


Manufacturing accounts for 8.7% of Nigeria’s GDP. This is mainly driven by the food and beverage segment, which constituents 65% of manufacturing in Nigeria. With a rising consumer class, multinationals are tapping into the opportunity to meet the needs of this consumer class with consumer-packaged goods (CPGs).


Between 2008 and 2020, food and consumer goods sales have the potential to swell to $40 billion in Nigeria, making these sales the highest of any African nation. Furthermore, formal retail chains will most likely have the opportunity to capture the growth of the consumer goods market regardless of Nigeria’s GDP per capita of $1,443.

The three main trends driving this growth are a youthful population, rapid urbanization, and mobile connectivity. A youthful population that is eager to try new products and brands, mostly concentrated in the large cities with access to mobile phones that can facilitate payments and money transfers, make Nigeria attractive to companies looking to take advantage of long-term opportunities in Nigeria.


It’s also important to note that Nigerian households that have incomes of more than $5,000 annually will increase from 20 percent of the population to 27 percent by 2020. This growth will position the aforementioned households as a suitable target customer base for formal retail chains.


This growth is accompanied by the opportunity for fast-moving consumer goods, consumer electronics, and fashion brands to meet the needs of this emergent class. With the development of Eko Atlantic, which has been pitched as Africa’s answer to Dubai, there will be more opportunities for retail chains to serve a class that sees the value in a modernized, convenient, and premium retail experience. The multibillion-dollar residential and business development, which is located as an appendage to Victoria Island along the Lagos coastline, could increase the presence of international brands to compliment brands like Nike and Levi’s that are already established in the market.


With that said, the main challenge is predicated on the fact that Nigerians are very price-sensitive and loyal to brands they have become familiar with over the years, thereby making it difficult for new entrants to market to potential customers and persuade them to purchase their products. Also, consumers that have the purchasing power for premium products sometimes travel out of the country to buy these items.


Industrial Goods

As business growth continues to flourish in Nigeria, supporting services sectors will have the opportunity to grow as well. By 2030, Nigerian services will grow alongside the expansion of the economy instead of changing drastically in comparison.


The opportunities for industrial and capital goods are along the lines of equipment used in the industrial and manufacturing sectors. These include machinery, fluid controllers, power tools, chemicals, IT hardware, and raw material inputs.

Other industrial goods opportunities outside the industrial sector include automotive spare parts and household fixtures, such as lighting, piping systems, paints.  


However, to capture opportunities in this market companies will have to overcome several challenges, particularly the present infrastructure constraints, such as bad roads that make the distribution of goods inefficient, power outages that damage these goods, and restricted access to foreign currency and credit, which adversely affects local businesses that international companies partner with.


Industries in Nigeria - Informal retail market in Nigeria
Informal retail market: Gbagi Market in Ibadan, Nigeria


Technology, Media, and Telecommunication:


Nigeria is becoming a leader in digital destinations, as the growth of digital platform businesses increases due to factors, such as an improving business environment that supports tech start-ups and investor interests from a large, young middle class. Leading the charge in the technology space are e-commerce companies, such as Jumia and Konga. With more Nigerians getting online to purchase goods, there are also a lot of logistics and payment companies developing solutions to meet these needs. In fact, over the past two years, one of Nigeria’s leading Fintechs and Jumia attracted investments of $250 million and $425 million respectively.


The reality is that investment opportunities in the tech sector of the industries in Nigeria have grown rapidly over the past few years. Over 84 tech deals valued at approximately US$2.3 billion were completed as of October 2017, which is a significant increase in comparison to a total of 13 deals completed as of 2010.


However, despite the potential opportunity to invest in this growing market, the clientele still may be lacking as most Nigerians rely on informal means outside of the digital sector to meet their daily needs. Online retail only contributes to approximately 1% of the total retail in Nigeria. A lot of work still has to be done to improve customer trust in this sector. With commerce, most Nigerians still want to ‚Äútouch and feel‚ÄĚ products and interact with a sales clerk before purchasing a product, which has made the adoption of technological solutions slow.



Despite the global trend of a decline in entertainment industry growth rates, amongst the industries in Nigeria, the media sector continues to grow as opportunities in film, television, and gaming arise. The Nigerian Film Industry (informally known as ‚ÄúNollywood‚ÄĚ) is globally recognized as the second largest film producer in the world, producing approximately 2,500 films a year. This makes Nigeria‚Äôs film industry second to India‚Äôs Bollywood.¬†The local film industry is estimated to employ more than 1 million people and to generate more than US$7 billion for the national economy. According to an IMF report in the summer of 2016, the industry now accounts for 1.4% of Nigeria‚Äôs GDP.


There are opportunities for new entrants to flourish in this market as, international on-demand companies, such as Netflix are expanding their usability within the market. Nigerian companies, such as iROTOtv, are already capturing opportunities to deliver local content online to a market base that seeks local film content in this format. Google is one of these global companies that are aware of the huge opportunity this industry presents, as they continue to adapt one of their main products – Youtube, to match the growing local needs, particularly in regards to utilizing it as a platform for advertising to Nigerian consumers. The main challenges include limited access to quality internet connection for streaming television content, limited access to computer devices and smartphones, and the high cost required to continuously produce high-quality local content.



Nigeria has one of the largest telecom markets in Africa. The leading players are MTN, a South African-based multinational company with a market share of 37.21%, Airtel (an Indian-based multinational telecommunication company), Glo (a Nigerian multinational company) and 9mobile (formerly Etisalat). Nigerian telecom subscribers across mobile networks spent a huge chunk of their household income on telecoms services in 2017. A total of $9.14 billion (N3.208 trillion) was expended by Nigerian subscribers in the purchase of airtime credit to access voice and data services on their mobile devices across mobile network operators.


As the number of Nigerians who have mobile phones increases (currently there are 147 million active mobile phone lines), and more Nigerians get access to the internet, telecommunications and networking companies have the opportunity to gain subscribers and supply networking and communication infrastructure, such as fiber cables and other data infrastructure equipment.


While telecommunications is the largest section of the information and communications industry and has contributed to Nigeria’s economy over the years, the sector’s growth stalled during the back half of 2016. Some of the challenges the sector faces include the loss of global investors, the movement of currency, very low consumer purchasing power, as well as the shifting product options, regulations, and trends.


Healthcare & Pharmaceuticals:



Of all the industries in Nigeria we included in our analysis, the healthcare sector is the most pluralistic, as it is split between the public and private sector. According to the World Bank, 3.6% of Nigeria’s GDP is spent on healthcare, thereby putting the healthcare market (both public and private) at approximately $14.6 Billion. The private sector is comprised of clinics, hospitals, diagnostics centers, pharmacies, and multi-specialist hospitals that provide a more premium service (compared to the public sector facilities) to those who can afford it.


The private health sector accounts for 70 – 75% of the total health expenditure in the country, meanwhile, the larger health facilities with over 100 beds are inadequately-funded public sector facilities. This mismatch of well-run medical facilities and the needs of the populace is the reason why Nigerians spend $1 billion on medical tourism, resulting in a loss of 3.7 million patient treatments annually.


There are both short-term and long-term opportunities in this market, as more consolidation happens with the private healthcare facilities to establish bigger, well-equipped facilities to match the medical demands of Nigerians. Recently, there has been a rise in HMOs (health insurance service providers), as most patients continue to pay out-of-pocket for services; 72% of total health expenditure is currently out-of-pocket expenditure.

Some of the other short-term opportunities include the supply of properly designed medical devices and equipment to establishments that need these devices and are willing to take on these capital expenditures. Furthermore, foreign entities have the opportunity to capitalize on Nigerians’ trust of foreign healthcare systems, as an interested client base already exists.


Recent challenges with the Nigerian healthcare system stem from the lack of trust Nigerians have in the local healthcare system, which has contributed to citizens frequently seeking care abroad. Also, the lack of proper funding to public healthcare providers that serve the majority of the population is an issue.

These economic conditions combined with social factors, such as poor hygiene, poor waste management, lack of drainage systems causing communicable diseases and disease outbreaks, make for an inadequate healthcare sector that cannot fully meet the needs of the market. These issues are also compounded by poorly-trained staff at hospitals that are not highly-motivated because of the sparse monetary compensation for health workers in the country.



In 2016, the pharmaceutical industry was valued as a $1.4 billion market. The value of the Nigerian pharmaceutical market has the ability to rise by as much as 9 percent a year over the next eight years to reach $3.6 billion by 2026. In fact, analysts believe that Nigeria could contribute between $1.9 billion and $2.2 billion to pharma sales growth globally, 55 percent of it from prescription drugs by 2026.


Despite this industry’s rapid growth, there are still a few challenges that the sector is dealing with amongst the other industries in Nigeria. For example, health infrastructure in Nigeria is not fully developed and varies significantly between large cities and more rural areas. Healthcare financing is also a barrier to market access for most citizens, as most spending on healthcare services is done so out-of-pocket. Also, the pharmaceutical retail market is still mostly fragmented with neighborhood pharmacies dispersed across the country.


One major challenge deals with the counterfeits and parallel imports that are in competition with registered drugs due to Nigeria’s predominantly informal distribution and retail networks, which makes it easier for such transactions to take place. This can prove to be harmful to pharmaceutical companies looking to get fair and adequate returns on their investments by charging the full market value for their drugs.


Power & Utilities


Inconsistent power supply has frustrated Nigerian citizens and stifled business growth for decades. Among the list of top challenges of living and doing business in Nigeria, the lack of constant electricity is a major infrastructural issue that has reduced the efficiency and productivity of Nigerian businesses. Solutions to issues in the power industry have eluded the Nigerian government for years.


Years after the privatization of government-owned power generation and distribution companies, a reliable power supply has yet to be achieved. The key players in the electricity value chain for grid-connected power are the generating companies (gencos), existing and new Independent Power Producers (IPPs), bulk traders, distribution companies (discos), and the end consumers.


To understand the severity of the power issues in Nigeria, one just has to look at the large power generation gap in the country. Nigeria presently has an installed power generating capacity of 12,522 Megawatts (MW) Рcurrently only operating at a capacity of 3,879 MW. Based on Nigeria’s population and an average consumption level of comparable countries, it is estimated that Nigeria’s electricity demand is between 98,000 to 160,000MW.  

Aside from the huge generation gap, there are other issues that have led to a low electricity access rate for Nigerians (45%). These issues include poor transmission infrastructure, revenue collection, inadequate metering of end users, power theft, inappropriate market pricing, and extension of current grid networks.

These issues have led to the growing need to explore other solutions, particularly off-grid models that complement the current power generation and distribution infrastructure. Solar energy is being adopted across the country to fill the power gaps from the grid. New pricing models are also being adopted to combat the initial capital cost of installing solar systems at businesses and households.

A combination of on-grid and off-grid solutions will be responsible for growth in this industry. A necessary growth that will close the power supply gap that leaves a lot of Nigerians without consistent electricity.


Financial Services



The Nigerian banking system is currently comprised of 22 commercial banks, 942 micro-finance banks and 64 finance Companies and 6 development finance institutions. The Central Bank of Nigeria (CBN) regulates and supervises the activities of these institutions and others, such as Bureau-de-Change, Merchant Banks, and Primary Mortgage Institutions.


There are opportunities for new entrants looking to operate in the banking sector, as 4 out of 10 Nigerians are still underbanked in that they lack the access to a full range of basic financial services. Coupling this lack of banking access with a growing middle class that is seeking an improved banking experience and businesses searching for lower and competitive interest rates, companies looking for opportunities in the financial service industries in Nigeria definitely have an advantage.


With that said, there are a few challenges to remain aware of. The same challenges that have made local banks hesitant to take on additional risk in the current environment. Without a properly built-out database to prove the creditworthiness of individuals and businesses, lending to the private sector requires a significant amount of collateral. Such requirements have caused a slow rate of lending to the private sector.


This sub-par rate of lending also comes with a significant interest rate, as most banks issue loans at a rate of 20-25% interest. High-interest rate makes repayment difficult for individuals and businesses. Other issues that foster financial exclusion include the little confidence that Nigerians have in the transactional security of the country’s banking system and the apparent difficulty of connecting people in rural areas to affordable banking services.



Nigeria is estimated to have more than 148 million mobile telephone subscribers and at least 92 million of whom access internet data services on their mobile devices. When it comes to how many Nigerians access online banking options for personal use, the facts are as follows:


  • 77% of Nigeria‚Äôs banking customers now use social media for personal purposes
  • 42% of Nigerian banking customers use online banking platforms for one or more banking activities
  • 40% of Nigerians have interacted with their bank using social media in the past

Amongst the industries in Nigeria, there is a growing opportunity for financial service companies to use technology as a way to offer a secure way to conduct banking services. These companies can also bridge the gap between in-person banking and banking on one’s phone companies. Paga is one such successful fintech company, as they have 6 million registered clients and have seen significant returns on their mobile money transfer services, having processed $500 million in mobile payments in 2016 alone.


Despite how rapidly the fintech sector is growing, there are a few lingering challenges, such as Nigerians’ lack of trust in the Nigerian banking system. Also, regulatory constraints and conversion issues (i.e., getting citizens to use their phone outside of recreational and entertainment purpose) can make building a successful fintech brand in Nigeria a bit more difficult. However, companies like Paga are overcoming this challenge by boasting a network of nearly 15,000 agents that provides face-to-face interaction to match the needs of their customer base.



The Pension Reform Act of 2004 (PRA 2004) and the subsequent review and enactment of PRA 2014, introduced the Contributory Pension Scheme (CPS), which made it mandatory for employers and employees in both the public and private sectors to contribute towards employee retirement benefits.The CPS has pension fund assets that amount to over $25 billion with a contributor base of over 6.9 million workers. The 6.9 million people with pension coverage represent 8.1% of the Nigerian working population, which means that there’s a huge opportunity for growth within one of the thriving industries in Nigeria.


The current challenges the sector is facing is whether the CPS can ensure that retired Nigerian workers receive adequate benefits in the future. There’s also the question of coverage and compliance, which speaks to how accessible CPS is to most Nigerians since only 8.1% of the population has obtained pension coverage. The last issue deals with financial stability and if CPS will be able to meet its financial obligations in both the short-term and long-term.




Over the past five years, the sector has contributed an average of 23.5% to Nigeria’s GDP and generated 5.1% of the country’s export earnings. In 2016, the agriculture sector accounted for 24.4% of Nigeria’s GDP.

The agricultural landscape in Nigeria includes 90% of output devoted to crop production with fish, forestry, and livestock accounting for the remaining 10%. Also, Nigeria is the sixth largest producer of cocoa globally and maintains a production volume of 248,000 tonnes of cocoa beans annually. However, only 30% of the beans cultivated are processed.


Opportunities to shift the import-export trade balance of certain agricultural products from importation to local productions are present. For instance, dairy is a major import for Nigeria.  Accounting for 6% of the total food import bill is a consumption of 1.7 million tonnes of milk while Nigeria’s domestic milk production is at 0.6 million tonnes.

There is also industrialization potential in building enterprises that add value to agricultural commodities and selling them as processed goods. For instance, Nigeria is the number one producer of yam in the world, accounting for 70‚Äď76% of the world‚Äôs yam production. Opportunities include using yams as input for higher-valued items, such as industrial starches and medicinal usage.


Nevertheless, there are several challenges you should be aware of before operating in the agriculture sector of the industries in Nigeria. For one thing, the agriculture market is underdeveloped, mainly because the focus is placed on production rather than enhancing other value chain segments (i.e., processing, marketing, and retail segments).

Poor infrastructure, lack of access to good equipment, and the employment of poor farming techniques are also important issues that should not be overlooked. Poor road networks result in perishable products being damaged before getting to the consumer. In addition, inadequate access to funds to purchase machinery, pesticides and other essentials to meet best-farming practices, as well as poor farming techniques, lead to low product yields. Lastly, the lack of market access is an issue, as local farmers don’t have the appropriate networks to sell their products.


Increasing the market access, both domestically and internationally, for local farmers will increase agricultural output and raise the standards for agricultural practices and goods. The development of the agricultural industry can lead to more inclusive growth in the country, creating employment and economic opportunities for rural communities.


Oil & Gas


Nigeria’s oil wealth cannot be overstated. The Nigerian economy has grown mainly from the exploration and exploitation of this resource in the oil and gas industries in Nigeria. Nigeria is the 13th largest oil producer in the world and the largest in Africa. Oil and gas exports accounted for more than 98% of export earnings, about 83% of federal government revenue, and generated more than 14% of the country’s GDP in 2016. However, due to the recent fall in crude oil prices, export earnings from crude oil has significantly reduced, leading to an economic recession in Nigeria between 2016 and 2017.


Nigeria is estimated to hold approximately 37 billion barrels of proven oil reserves, which is the second biggest in Africa. However, even though Nigeria has a large number of oil reserves that can be extracted, lack of adequate gas infrastructure and fully-functioning refineries have prevented the country from taking full advantage of this natural resource. Nigeria imports the majority of its refined products due to the lack of domestic refining capacity with only 40% of oil refineries operating at full capacity. It is also estimated that Nigeria has about 176 trillion cubic feet (Tcf) of proven natural gas reserves. However, 70% of this gas is wasted due to flaring.


The largest conglomerate in Nigeria, Dangote, is capitalizing on the country’s oil resources to meet the local demand for refined fuels. Dangote Oil Refinery Company (Dangote) is constructing an integrated refinery and petrochemical complex in the Lekki Free Zone near Lagos, Nigeria. The refinery is expected to be the world’s biggest single-train facility, upon completion in 2019. It is expected to double Nigeria’s refining capacity and help in meeting the increasing demand for fuels while providing cost savings. This is just an example of the new developments and opportunities that reside in Nigeria’s oil and gas industry.


Diverse Opportunities

For those willing to bear the risk and challenges that come with doing business in Nigeria, the returns will definitely be worth it. With boisterous and diverse industries in Nigeria, currently still in nascent stages but growing at a rate that can only be matched by a few places in the world, Nigeria is an emerging market filled with potential and huge market opportunities. Nigeria could be an ideal location for many international companies looking to grow its global footprint.


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