Business in Egypt vs. Nigeria: 2019 Economic Comparison

Business in Egypt VS. Nigeria

Performing a quick country-by-country comparison between business in Egypt and business in Nigeria gives business managers a reference point on how to prioritize each market for their growth plans in 2019.

 

To support business development and sales managers in assessing which African country to prioritize in their organization’s expansion plan, we developed a tool (kpakpakpa’s Africa Market Potential Index – AMPI) that provides a quick way for managers asses market potential across the African continent.

 

Our Africa market potential index (AMPI) measures key metrics in critical areas of each country’s economy, social-political landscape, technological adoption, infrastructural developments, and the efficiency of doing business.

 

kpakpakpa’s AMPI measures the market attractiveness of 48 African countries, across seven pillars. These seven pillars act as key determinants to the short and long-term market potential of each country.


 

The seven pillars, and their respective weighting factor, that make our market potential Index

 

Factors

Description

Weighting

Market Size & Appeal

This evaluates the size and appeal of the domestic market.

20%

Macroeconomic Resilience

Measures the stability of the macroeconomic environment.

20%

Political Landscape & Governance

Measures the quality of governance.

10%

Social & Human Development

Measures social development of the country.

10%

Investment in Technology, Infrastructure & Logistics

Measures the efficiency of technology, logistics, and infrastructure as a supporting base for the business environment.

15%

Economic Diversification

Measures the degree of dependence of the economy on the sectors and resources in the country.

10%

Business Ease

Measures the ease of doing business in the country.

15%

Market Potential Index

The weighted average of the seven factors above to determine the market potential of each economy.

100%

 

Within each pillar, a set of key indicators have been included with specific weightings to arrive at the overall pillar rank and score. The first two pillars – market size & appeal and macroeconomic resilience – are short-term factors, and account for 40% of the total weighting.

 

The other five pillars are long-term factors and this account for the remaining 60% of the total weighting.

 

There are definitely no absolutes in the search for the best market to prioritize in Africa. There will be different answers for different organizations and industries.

 

You would know best what is necessary to asses opportunity and risk for your organization’s growth plans. Use this tool as a starting point to find the countries that fit properly with your company’s expansion strategy.

We use this tool to perform country comparisons.


Business in Egypt vs. Nigeria

In this article, we do a country-by-country comparison to understand the market potential of doing business in Egypt vs. Nigeria. The market potential across the seven pillars for both countries are:

 


Nigeria

Egypt

Market Size & Appeal

88

100

Macroeconomic Resilience

29

35

Political Landscape & Governance

58

42

Social & Human Development

52

68

Investment in Technology, Infrastructure & Logistics

36

68

Economic Diversification

6

40

Business Ease

55

63

Africa Market Potential Index (AMPI)

48

61

 

The market potential for business in Egypt is higher than that of Nigeria.

 

Out of all seven market pillars except for political landscape and good governance, Egypt performs better than Nigeria.


Country Information

Here is some basic information about both countries.


Nigeria

Egypt

Full Name

Federal Republic of Nigeria

Arab Republic of Egypt

Flag

Currency

Nigerian Naira

Egyptian pound (EGP)

Time Zone

(UTC + 1)

(UTC+2)

Capital city

Abuja FCT

Cairo

Climate

Temperate

Hot, dry climate

Area

West Africa

North Africa

Telephone code

(+234)

(+20)


Market Size, Appeal & Resilience

Although Nigeria has the largest GDP in Africa, Egypt fares better in Market size & appeal. This is primarily dues to a higher GNI per capita and a projected growth rate that is more than twice the growth rate project for Nigeria in 2019 & 2020. Egypt is also a more resilient economy.

 


Nigeria

Egypt

GDP ppp (nominal)

$1,325.81 Billion

$1,193.24 Billion

GDP (nominal)

$376.28 Billion

$235.4 Billion

GDP growth

+2.1%

+5.4%

GDP per capita

$2,758

$2,785

Exports

$33.3 Billion

$21.21 Billion

Imports

$35.53 Billion

$57.77 Billion

Balance of current payments

$7.32 Billion

$(-19.89) Billion

External debt (% of GDP)

23.4%

103.3%

Foreign exchange reserves

$ 47.25 Billion

$44.42 Billion

Interest rate

14%

16.75%

Inflation

11.14 %

14.4 %

Unemployment

18.8%

11.8%

Market Size & Appeal

88

100

Macroeconomic Resilience

29

35


Political Landscape & Governance

Good governance takes factors such as national security, safety, rule of law, political participation, and human rights. The Mo Ibrahim Index of African Governance (IIAG) was used to determine the score and rank for this pillar.

Business in Nigeria performs better than Egypt in terms of good governance.

 


Nigeria

Egypt

Political Regime

1999 Constitution of Nigeria

Unitary Semi-Presidential Republic

President

Muhammadu Buhari

Abdel Fattah El-Sisi

Next Election

2019

2020/2022

Good Governance Score (out of 100)

58

42


Social & Human Development

An economy is only as productive as its people, so the level of social and human development is indicative of progress and future productivity. This pillar looks at the general welfare of the society – access to education, basic amenities, and healthcare.

 

To get the score, we used a normalized score derived from the IIAG score for Human development and cross-referenced that with the Human Development Index (HDI) by the United Nations Development Programme.

 

Egypt performs Nigeria in this market pillar.

 


Nigeria

Egypt

Total population

194 Million

94 Million

Growth

+ 2.6 %

+ 1.9%

Population density

210 per sq. km

96 per sq. km

Median age

17.9 years

23.9 years

Index of human development (0 – 1)

0.527

0.691

Literacy rate

51.08 %

75.06 %

Life expectancy at birth

53

71

Child mortality rate

104 per 1,000 births

23 per 1,000 births

Urban Population (%)

50.3%

42.7%

Main cities

Lagos, Abuja, Port Harcourt, Kaduna

Cairo, Alexandria, Giza

Religion

Christianity, Islam, Indigenous

Islam, Coptic Christianity, Other Christianity

Languages

English, >520 languages spoken – Main languages Yoruba, Igbo, Hausa.

Egyptian Arabic, English, Nobiin, Kenuzi-Dongola

Social & Human Development Score (0 – 100)

52

68


Investment in Technology, Infrastructure & Logistics

The measure of growth in any economy is how its constituents allocate its resources more efficiently. Adopting new technology is a way of boosting productivity. The level of investment, development, and adoption of new technology is indicative of the productivity level of an economy.

 

Also, the infrastructure that enables businesses to produce goods and the ease of moving these goods around through efficient logistics channels is a major determinant of success for businesses in any economy.

 

A weighted average of the IIAG’s Infrastructure score and World Bank’s Logistics Performace Index gives the score for this pillar.

 

Business in Egypt gets the edge over business in Nigeria when graded over the entire infrastructural development in each country – particularly in regards to electricity availability. Egypt also has a higher economic complexity index (ECI) which is an indication of the complexity of products developed within the country.

 


Nigeria

Egypt

Logistics Performance Index (World Rank)

2.53 (110 of 160)

2.82 (67 of 160))

Infrastructure Score (Mo Ibrahim Index)

33.2/100

62.6/100

Economic Complexity Index (ECI)

-1.54

-0.32

Access to electricity (% population)

59.3%

100%

Investment in Technology, Infrastructure & Logistics Score

36

68


Resources & Economic Diversification

Economic diversification is generally taken as the process in which a growing range of economic outputs is produced.

 

The landscape for business in Egypt is clearly more diverse than Nigeria – the latter with a strong dependence on crude oil exports for the bulk of revenue generation.

 


Nigeria

Egypt

Share of industry (% of GDP)

22%

34%

Share of services (% of GDP)

55.8%

Share of agriculture (% of GDP)

21%

11%

Main Resources

Oil, Cocoa, Cashews, Ginger,  Tin, Columbite, Iron ore, Coal, Limestone, Lead, Zinc,

Petroleum, Natural gas, Iron ore, Phosphates, Manganese, Limestone, Gypsum, Talc, Asbestos, Lead, Zinc

Export Concentration Index (0 – 1)

0.7344281297

0.1539354682

Economic Diversification Score ( 0 – 100)

6

40


Business Ease

The business ease pillar is a measure of how easy it is to partake in business activities in each country. Using a weighted average of the World Bank’s ease of doing business score and IIAG’s business environment score as a determinant of this pillar, Egypt is easier to do business in than Nigeria.

 


Nigeria

Egypt

Ease of doing business (World rank)

145 out of 194

128 out of 194

Points of Entry

Lagos Port Complex and Tin Can Island Port in Lagos; Calabar Port, Delta Port, Rivers Port in Port Harcourt, and Onne Port.

Damietta (EGDAM), Petroleum Dock Port (EGSUZ), Port Said (EGPSD), Adabiya (EGADA), Alexandria (EGALY), Hurghada (EGHRG), Safaga (EGSGA)

Rule of Law

Financial markets

Nigerian Stock Exchange (NSE)

Egyptian Exchange (EGX)

Business Ease Score (out of 100)

55

63


Winner

Egypt

Using the kpakpakpa AMPI tool as a starting point for your analysis, the market potential for business in Egypt is higher than that in Nigeria.

 

Nigeria does better only in good governance and the political landscape market pillar. Egypt fares better in all other pillars such as market size & appeal, business ease, social development, infrastructural advancement, and economic diversification.

 

Use this framework and customize it to your business priorities to choose between which of the two countries you want to prioritize.

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About The Author

Nifemi Aluko

Connecting global organizations with quality information and insights to help them succeed in the Nigerian market… Passionate about business, technology, and music.

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